Capital Bank’s General Assembly held its ordinary annual meeting on Sunday, May 31, 2020, via the Smartagm video conferencing platform, in compliance with Defense Order Number 13 for the year 1992 and Defense Order Number 5 for the year 2020 published in the Official Gazette on March 31, 2020, and the measures issued by the Minister of Industry, Trade, and Supply on April 9, 2020.

The meeting, which was chaired by Capital Bank Chairman of the Board of Directors Bassem Khalil Al-Salem, saw the attendance of 95 shareholders who own 195,885,413 shares or 79.94% of the company’s capital of JD200 million in shares, comprising 72,096,889 original shares and 87,788,524 shares by proxy. The meeting, which was declared legal by General Controller of Companies Dr. Wa’el Armouti, also saw the approval of Capital Bank’s closing financial statements for the year 2019. During the meeting, members voted on naming the Arab Potash Company as an independent member of the bank’s Board of Directors.

During the meeting, Al-Salem said he valued the measures taken by the Central Bank of Jordan to mitigate the negative repercussions of the coronavirus on the national economy, as well as the cohesion shown among Jordanian banks to uphold the procedures in order to support vulnerable economic sectors. He added that Capital Bank was one of the first financial institutions to champion the national loan guarantee program, which works to empower professionals, artisans, single-owner establishments, and small and medium enterprises with financing and soft loans.

Commenting on Capital Bank’s performance during 2019, Al-Salem said: “In spite of the stifling economic conditions in Jordan and the uncertain political conditions in Iraq, Capital Bank continued its successful march during last year, achieving a remarkable net operating income growth rate of 29%, amounting to JD46 million compared to JD35.7 million in 2018.”

Al-Salem went on to add, “This growth is directly in line with the bank’s strategy to maximize revenues derived from diverse income sources in order to reinforce a return on shareholder equity and to mitigate pressure on the capital sufficiency ratio as well to achieve the highest possible levels of efficiency in utilizing available financial resources and to diminish the sensitivity of profits. Based on this, the bank’s revenues from sources other than interest grew during 2019 by 38%, reaching JD39 million compared to JD28 million in 2018.”

Al-Salem noted that Capital Bank succeeded, as a result of this growth in net operating income, in absorbing the effect of the high levels of non-operating debts and the allowances allocated for them in the income statement. Its profits before did not witness any considerable changes compared to 2018, amounting to JD37 million. Net profits after taxes, however, decreased by 5% to reach JD28.8 million.

Capital Bank’s revenues from sources other than interest grew during 2019 by 38%, amounting to JD39 million compared to JD28 million in 2018 as a result of growth in commissions related to foreign trade financing operations and the increase in profits from foreign currencies, in addition to an increase in other revenues as a result of collecting debts that had previously been written off.

The ratio of nonperforming debts from the facilities portfolio after excluding suspended interest decreased to reach 7.25% at the end of 2019, compared to 8.61% in 2018, indicating an improvement in the quality of the Capital Bank Group credit portfolio.

Capital Bank was also able to reinforce the capital sufficiency ratio, which reached 18.41% at the end of 2019, compared to 16.25% in 2018. Shareholder equity increased to JD347 million at the end of 2019, compared to JD337 million at the end of 2018, which amounts to a rate of 3%. During 2019, Capital Bank Group improved its operating efficiency, with the expense-to-revenue ratio decreasing from 55.6% in 2018 to 50.9% in 2019. 

Also during the meeting, Chief Executive Officer Dawod Al Ghoul said that Capital Bank, despite of the economic challenges and difficult conditions, achieved outstanding results in 2019. He noted that due to the large increase in the net operating income, the bank was able to absorb the effects of increasing the allowances for debts, which resulted in the stability of the level of profits before taxes without any noticeable change compared to last year.

Looking forward, Al Ghoul said that Capital Bank is successfully managing the current crisis, serving its full range of customers without interruption both in Jordan and in Iraq through its e-banking platform services and the customer service call center. Team members have been working remotely at optimal levels of efficiency and according to international best practices.

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