Amman, Jordan (March 2021) Bank of Jordan announced its financial results for the year 2020, which were approved by the Central Bank of Jordan, by achieving a net profit attributable to the bank’s shareholders at an amount of JOD 35.8 million for the year 2020, compared to JOD 40.2 million in 2019, showing a decrease of 10.9%. BOJ Board of Directors recommended to the General Assembly to distribute 12% cash dividends of the bank’s capital to shareholders at an amount of JOD 24 million.

In 2020, the global economy witnessed an unprecedented decline due to the COVID-19 pandemic and its negative impacts on the humanitarian, economic and social domains, as mandatory closures affected most economic sectors and social distancing measures were enforced. This has led to a significant decline in consumer spending, private investment, and demand for service sectors, especially travel and tourism, in addition to a noticeable decline in foreign trade. Expectations indicated that the global economic downturn would be higher than the decline recorded during the global financial crisis. Despite the exceptional challenges resulting from the COVID-19 crisis, Bank of Jordan was able to tackle these challenges, thanks to the strength of its financial position, the strength of its capital base, the adequacy of its provisions, and its high liquidity ratios. The capital adequacy ratio reached 19.08%, and the coverage ratio of provisions for non-performing loans reached 107.2%. The legal liquidity ratio also reached 130.7% at the end of 2020, in light of the lack of good employment opportunities during 2020.

As a result of the current economic conditions, and the uncertainty that dominated the economic scene in light of the pandemic and its future consequences, the bank worked to hedge some accounts and economic sectors that witnessed an increase in the probability of default. The financial assets expected credit loss provision jumped from JOD 18.6 million in 2019 to JOD 31.9 million in 2020. This is in addition to the implications for the decline in the bank’s margins as a result of lower returns on credit facilities in the banking sector, thus operating profit amounted to JOD 127.7 million, decreasing by 8.8% from the end of 2019. In spite of the decline in profitability, the rates of returns are still within good and acceptable levels in light of the circumstances that rocked the economies of the countries in which the bank operates and the amount of provisions that have been taken. The return on assets (ROA) reached 1.31%, and the return on equity (ROE) of the bank’s shareholders was 8.24% by the end of 2020. Moreover, the bank’s capital base is sufficient to face the shocks and risks that the bank may be exposed to.

In terms of the bank’s financial position, total assets amounted to JOD 2.7 billion at the end of 2020. Shareholders equity also reached JOD 454.7 million. In terms of investments of sources of funds, the bank's loan portfolio (at amortized cost) amounted to about JOD 1.5 billion, by an increase of 4.1% compared to 2019. The financial assets portfolio also grew by 26.6% amounting to JOD 448.1 million. Customer deposits also reached JOD 1.9 billion.

Commenting on these results, Mr. Shaker Fakhouri, Chairman of the Board of Directors, said: “Bank of Jordan has taken many measures that mitigated the economic impacts on corporate and consumer customers, including restructuring, rescheduling, delaying installments, or reducing the burden of debt service, by reducing interests and participating in financing programs targeting sectors most affected by the crisis. BOJ also contributed to the community initiatives that were launched in Jordan and Palestine to address the impact of the pandemic, and to alleviate the burdens and concerns, especially on the most afflicted citizens, as the amount paid to “Himmat Watan” Fund in Jordan and “Wakfet Izz” Fund in Palestine exceeded JOD 1.15 million.

Mr. Fakhouri also emphasized the bank’s strong financial position, the strength of its capital base and the completion of strategic projects that will enhance the bank’s ability to face challenges with the pandemic receding, life gradually returning to normal and the start of economic recovery. In parallel, in case the pandemic does not recede, the bank will also be able to evaluate and take advantage of opportunities until life returns to normal. This comes in line with the bank's rapid response in keeping up with developments and challenges in the business environment, and capturing opportunities by entering new markets and harnessing modern tools and technologies in providing services to chart a new path that is more adaptive and flexible.