Banking
From The Report: Jordan 2014
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Jordan’s banking sector, with its diverse array of financial institutions, continued to perform robustly over the past year. In the first half of 2013 non-performing loans dropped to their lowest level since 2009 while the Islamic financial services segment has continued to grow, increasingly seeking out business from small and medium-sized enterprises as well as from the retail sector. In May 2014 the Central Bank of Jordan issued a new set of instructions in line with Basel III standards aimed at ensuring responsible corporate governance within the sector.

This chapter contains interviews with Ziad Fariz, Governor, Central Bank of Jordan; and Nemeh Sabbagh, CEO, Arab Bank.

Articles from this Chapter

Overview

In a turbulent region, the local banking sector has become a safe haven
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Over the past year, Jordan’s local banking sector has shown a robust performance, with aggregate lending on the rise and net profits generally maintained across the board. Improvements in asset quality indicators suggest that the industry has turned a corner regarding the troublesome loans that have persisted since the global financial crisis, and a relatively upbeat assessment of the economy’s growth prospects by the IMF and others has brought an air of optimism to the sector in 2014. Though…

Analysis

The development of the country’s sharia-compliant banking sector
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Three of Jordan’s domestic banks operate on an exclusively Islamic basis, forming a vibrant sharia-compliant segment within a sector that is among the most well-established in the region. The Islamic finance industry in Jordan has come a long way in its 36-year history. Background Bankers and Islamic scholars in Jordan began to investigate the possibilities of Islamic banking almost as soon as Egypt and Pakistan established their own such institutions in the 1950s and 1960s. The government played…

Analysis

Market exits and strategy shifts bring fresh opportunities
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Global banks have played a prominent role in the Middle East for decades, particularly in areas such as project finance where their vast capital and depth of experience grant them a competitive edge. Although regional players have grown considerably in capacity – especially in the retail segment – a closer look at the structured lending being directed towards various large-scale developments in the MENA region usually reveals that at least one international institution is involved. The global…

Interview

OBG talks to Ziad Fariz, Governor, Central Bank of Jordan (CBJ)
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Interivew: Ziad Fariz With inflationary pressures stabilising, and further cuts in key interest rates in January 2014, what are your GDP forecasts for 2014? ZIAD FARIZ: GDP growth is expected to be around 3.5% in 2014. Inflationary pressures are stabilising, which is a positive sign, and we anticipate budget deficits to fall within the target of our economic outlook. We are on course to achieve all of our budget targets in 2014. We expect our current account deficit to decrease to less than 10%…

Interview

OBG talks to Ziad Fariz, Governor, Central Bank of Jordan (CBJ)
OBG
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Interivew: Ziad Fariz With inflationary pressures stabilising, and further cuts in key interest rates in January 2014, what are your GDP forecasts for 2014? ZIAD FARIZ: GDP growth is expected to be around 3.5% in 2014. Inflationary pressures are stabilising, which is a positive sign, and we anticipate budget deficits to fall within the target of our economic outlook. We are on course to achieve all of our budget targets in 2014. We expect our current account deficit to decrease to less than 10%…

Interview

OBG talks to Nemeh Sabbagh, CEO, Arab Bank
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Interivew:Nemeh Sabbagh Would you say that the central bank’s recent cutting of key rates was more to expand the money supply or to lower the state’s borrowing costs? NEMEH SABBAGH: The measures taken by the Central Bank of Jordan to raise interest rates on monetary policy instruments over the past few years were aimed at promoting monetary stability. They renewed confidence in the Jordanian dinar, bolstered demand for it, reduced dollarisation, improved foreign currency reserves and…

Interview

OBG talks to Nemeh Sabbagh, CEO, Arab Bank
OBG
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Interivew:Nemeh Sabbagh Would you say that the central bank’s recent cutting of key rates was more to expand the money supply or to lower the state’s borrowing costs? NEMEH SABBAGH: The measures taken by the Central Bank of Jordan to raise interest rates on monetary policy instruments over the past few years were aimed at promoting monetary stability. They renewed confidence in the Jordanian dinar, bolstered demand for it, reduced dollarisation, improved foreign currency reserves and…

Analysis

A closer look at the direction of the country’s central bank
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When it comes to managing banking sector crises, the Central Bank of Jordan (CBJ) has a solid track record of success. Over recent decades, it has been presented with a wide assortment of financial sector dilemmas, which have compelled it to respond with various and sometimes vigorous interventions. Guardianship These have taken a number of different forms. When Petra Bank collapsed due to fraud in 1989, the CBJ consolidated the troubled bank’s balance sheet into its own. In 1993, when Jordan…