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JIB achieved in 2006 an increase in profits that reached JD 23.4 million before tax compared to JD 19.6 million in 2005 with a net increase of JD 3.7 million, i.e. equivalent to 19%. Net profit after tax reached JD 15.5 million recording a growth of 18.2%.
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Total of Assets(excluding Contingent Commitments, Restricted Investment Accounts, Investment Portfolios and Investment by proxy Accounts) as of 31/12/2006 reached about JD 1.5 billion compared to JD 1.3 billion in 2005 demonstrating an increase of JD 120 million (a growth of 9%)
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The increase in financing and investment was about JD 116.4 million with a growth of 18.2% where the Bank’s investment activities (Mudaraba, Musharaka, Murabaha and other investments) reached about JD 757.9 million compared to JD 641.5 million in 2005.
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Volume of deposits reached JD 1.24 billion compared to JD 1.16 million in 2005 with an increase of JD 81 million (a growth of 7.01%). The balance of investment portfolios/ Muqarada Bonds was around JD 166.7 million compared to JD 159.1 million in 2005 with an increase of JD 7.58 million (a growth of 4.8%). The balance of Restricted Investments reached JD 87.2 million against JD 66.8 million in 2005 with an increase of JD 20.5 million. The Bank presented this year Investment by proxy account service to its banking services which its balance reached around JD 9.45 million as of 31/12/2006.
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According to the mentioned figures, the Bank’s share of the local market reaches 10.1% of the total direct credit facilities of the Jordanian Banks for the year 2006. Financing made by the Bank covered various economic and social activities and facilities including a number of medical facilities such as hospitals clinics, educational institutes, and industrial & real estate projects in addition to financing the commercial sector.
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With regards to financing necessary needs of the citizens, the report indicated that as at the end of 2006, the outstanding number of beneficiaries of the Bank’s financing for building materials and housing purposes was 27,770 citizens and the outstanding balance amounts they received reached JD 180.1 million. Outstanding balance of means of transportation and construction vehicles financing reached JD 125.8 million from which 24,403 beneficiaries benefited. Whereas the outstanding balance of furniture financing reached JD 18.7 million from which 10,386 beneficiaries benefited.
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The Bank’s commitment to its transformation plan of recording Murabaha profits on accrual basis in realization of profits from Murabaha operations funded in Jordan Dinar from accounts of funds involved in mutual investment gradually during four years commencing the beginning of the year 2004, which was approved by the Central Bank of Jordan, continued. In order to finalize this plan, the profits as of the beginning of 2008 will be recorded in the ratio of 80% and all Murabaha profits will be recorded on accrual basis.
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In Implementing the resolution of the General Assembly in its extraordinary meeting held on 30/4/2006 and after getting the approval from the competent authorities, the Bank’s capital was increased by 10 million dinars/ shares and a quarter of a share was distributed free for each capital share on 14/6/2006. This was carried out through the capitalization of JD 7 million of retained earnings and JD 3 million of the voluntary reserve. In addition, 15 million shares were put for special subscription with a nominal value of “one Jordan dinar” and a premium of “one Jordan Dinar” per share.14138.764 million shares were subscribed making the paid in capital of the Bank JD 64138764 million.
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Shareholders’ equity at 31/12/2006 was around JD 115.3 million compared to JD 69.4 million for the year 2005 (a growth of 66.2%). The capital adequacy ratio according to the standards of the Central Bank of Jordan was 16.2% exceeding the determined limit of 12% and also exceeding the limit determined by Basel Committee which is 8%. The ratio also reached 27.7% according to AAOIFI standards.
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The Bank’s branches covering different areas of the kingdom was at the end of 2006 (54) branches and (9) cash offices all run by 1498 employees.
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During 2006, the Bank kept achieving more developments and modernization on its equipment, network and systems including the following:
A- Providing SMS via mobile phones to notify the subscriber about its various accounts in addition to launching Golden and Silver Visa Cards Campaign to inform the customer of any transaction on its account by an SMS to its mobile phone after seconds of using its card .
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Issuing VSDC using the Chip technology that provides safety and security to the holder of the card as using the card cannot be done without having PIN code. JIB was the first local bank to issue this card IN-House.
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Monitoring branches and ATM’s via video cameras in addition to operating of three new ATM’s raising their number to 59.
D- Taking all necessary arrangements to apply the electronic clearing and to replace the old system in the Bank with a new more effective and more capable system to cope with Banking Technologies Developments.
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The Bank continued its expansion in implementing the concept of Investment Portfolios/ Muqarada Bonds and circulate them as savings means that prepares for formation of a Regulated Secondary Market through which such bonds may be circulated hence facilitate liquidation thereof at any time in turn will cause savers to deal with such securities that are approved according to Sharia. The balance of these bonds was at the end of 2006 around JD 166.7 million.
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The Bank continued with Savings Accounts Rewards scheme. This scheme includes cash rewards the value of which is JD 150 thousand annually to cover expenses of Hajj, Omra and other rewards. It is known that the Bank bears the value of the rewards from the shareholders’ funds as a Sharia fatwa issued in this regard.
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During 2006, the Bank delegated new numbers of its employees to receive academic qualification. In this respect, the Bank delegated (4) members of its employees to get PhD making the total number of employees to get PhD (8). The Bank also sent (7) of its employees to get MA Degree making the total number of those delegated to get this degree (38). It also delegated (11) members of its employees to make the Bachelor’s degree raising the total number of employees sent to obtain this degree (44). It also delegated (6) members of its employees to the Institute for banking and financial studies to get Diploma in Islamic Banking studies making the total of those sent to this institute (205).
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The Bank’s training institute witnessed more activity during 2006 as (121) specialized courses and seminars had been organized for the Bank’s employees. In these courses and seminars (1396) employees participated. The courses covered various banking, financial, administrative and Sharia activities and business issues required by Bank’s employees to develop their skills The Bank continued to give available training opportunities for new numbers of educational organizations. The number of such trainees reached 544 students during 2006.
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The Bank continued its social role aiming at enforcing the moral values in the society and making relations stronger and disseminating the feelings of mercy among people one toward the other through its various activities represented in the following:
A- Support for religious, social and cultural activities:
The Bank continued the donations to the committees and charities in the kingdom which in turn support and aid individuals and families in need. This is commonly made through
the Hashemite Charity Commission or Zakat committees of the Ministry of Awqaf and Jordanian Hashemite Fund and the National Program for Awareness and Development and Chastity Charitable Society and Group Wedding Party for People with Disabilities in addition to the donations that the Bank presents as prizes for winners at the Holy Qur’an Memorization contests.
B- Interest-Free Loans (Al Qard Al Hassan):
The Bank continued granting Al Qard Al Hassan for justified social purposes such as education, medical treatment and marriage. Al Qard Al Hassan amounts granted by the Bank in 2006 was around JD 7.3 million of which 15,506 citizens benefited.
C- Financing Craftsmen:
The Bank continued the program to finance the needs of engineers, doctors, pharmacists, medical laboratory technicians, carpenters and ironsmiths under Musharaka Method in addition to financing according to Murabaha Method.
D- The Mutual Insurance Fund:
The Bank continued its patronage of the Mutual Insurance Fund, which was established in 1994 through which clients collaborate to compensate for part of the shortage caused to any one of them to debt in certain cases in 2006, compensations paid from this Fund in (95) indemnity cases amounted to JD (332) thousand. Since the establishment of this fund till the end of 2006 reached (80,488), and the outstanding balance of their debts reached about JD (202.9) million. The balance of this fund as at the end of 2006 reached JD (15) million.
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The Bank continued to invest part of its financial resources in the capitals of national companies, whose activities do not include any violation of the rules and principles of Islamic Sharia and which produce goods and provide services that benefit society and enhance the development of the national economy. The total sum of the Bank’s participations in the capitals of such companies, the number of which reached (40) stood at about JD (42.4) million at the end of 2006. Sanabel Al-Khair for Financial Investments was established as a limited liability company from the Bank’s special funds with a capital of JD (2.5) million to supplant the Bank’s Brokerage Office.
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Customers active accounts were 598 and the outstanding number of financing transactions was 99 thousand transactions at the end of the year.
