Consortium acquires billion dollar stake in Arab Bank Group
A consortium of investors have purchased a 20 per cent stake worth $1.12 billion in Jordan’s Arab Bank Group.
Led by Arab Bank Chairman, Sabih al Masri, a consortium of investors bought a 20 per cent stake in Arab Bank Group for $1.12 billion from Oger Middle East Holdings. The consortium was advised by Baker McKenzie with Qatari-based investment bank, QInvest as their sole financial advisor.
Speaking exclusively to CPI Financial, Karim Nassar, Riyadh partner at Baker McKenzie said, "Cross-border M&A activity in the Middle East has started off strongly this year, with this acquisition being one of the largest M&A deals seen in Jordan and the region so far. It was challenging to successfully close such a complex transaction in a record time frame within the exclusivity period agreed with the seller, as well as reaching a satisfactory resolution acceptable to all the parties involved from different jurisdictions, and we are delighted to have been able to support Mr. Sabih al Masri and other members of the consortium on this strategically significant transaction.”
Arab Bank, headquartered in Jordan, is one of the Arab world's largest privately owned banks and operates in 30 countries. The bank has assets of more than $46 billion, with 600 branches on five continents. It owns 40 per cent of Saudi Arabia's Arab National Bank ANB.
The bank reported a growth of 20 per cent in net profits for the 2016 financial year. Net operating income before provisions and taxes exceeded $1.1 billion, whilst the group’s net profit after tax reached $533 million for the year 2016 as compared to $442 million for 2015.
Excluding the effect of foreign currency devaluations, the bank has shown a consistent solid growth during 2016 whereby loans and advances grew by 6 per cent to reach $23.7 billion and customer deposits grew by three per cent to reach $33.6 billion. As of 31 December 2016, the group’s loan-to-deposit ratio stood at around 70 per cent, whilst capital adequacy ratio calculated in accordance with the new Basel III regulations has improved further to reach 15.7 per cent.
The asset quality of the group remains high, and that credit provisions held against non-performing loans continue to exceed 100 per cent, excluding the value of collaterals held. In view of the results, the Board of Directors recommended to the shareholders the distribution of 30 per cent cash dividends for the financial year ended December 2016.
The acquisition was led by Arab Bank Chairman Sabih al Masri, a businessman with stakes in other banks and the hotel industry, and owner of ASTRA, a diversified group of companies he founded with investments in a wide range of sectors that has 6,000 employees in 11 countries. The seller, Oger Middle East Holdings, is one of the Gulf's largest construction companies.