Jordan Islamic Bank has continued its course in deepening the Islamic banking experience, to convince people of the ability of the Islamic Sharia' to cope effectively with the new developments. With commitment to its mission, the Bank has enhanced its position in the banking market in Jordan and achieved more progress and growth in the various activities. The following is a brief of the 29 th annual report along with the final data for 2007, which has been discussed and approved by the General Assembly in its meeting held on Sunday 30 April 2008 in the Head Office:
• In 2007, the Bank has achieved an increase in the profits reaching before tax to about JD (34.4) million with a growth of (47%) compared to 2006. The net profits after tax reached about JD (22.99) million with an increase of (48.6%) compared to 2006. The profits of the joint investment reached about JD (75.5) million compared to JD (61.2) million in 2006.
• The total Balance amounted to JD (1.59) billion with a growth of (9.2%). The total balance including the restricted / specified investment accounts, investment portfolios/Muqarada Bonds and investment by Agency increases to reach about JD (1.93) billion compared to JD (1.73) billion at the end of 2006.
• The increase in financing and investment amounted to about JD (164.5) million with a growth of (21.7%). The Bank's investment activities in (Musharaka, Murabaha and other investments) reached about JD (922.5) million against JD (757.9) million in 2006. The total financing and investment including investment portfolios, restricted/specified investments, and investment by Agency amounted to JD (1.253) million distributed on (96.6) thousand transactions compared to about JD (1.045) million at the end of 2006 distributed on (84) thousand transactions.
• The total balance of savings accounts in 2007 reached about JD (1,694) million distributed on (632.9) thousand operating accounts compared to JD (1,531) million distributed on (597.6) thousand operating accounts at the end of 2006. The balance of the investment portfolios/Muqarada Bonds reached JD (218.5) million against JD (166.7) million in 2006, with a growth of JD (51.8) million with a growth of (31.1%). The total balance of the restricted investments reached JD (101.2) million compared to JD (87.2) million in 2006, with an increase of (16%). The balance account of investment by agency reached about JD (9.5) million as of 31/12/2007.
• The total assets of the Bank to the total assets of other banks in Jordan amounted to (7.2%), while the total balance of savings accounts to the total clients' deposits in the banks operating in Jordan reached about (10.6%). The total balances of financing and investment to the direct insurance facilities of the banks operating in Jordan for 2007 reached (10.6%). The Bank's financing operations covered the different economic and social activities, including a number of health utilities, such as hospitals, clinics, medical companies and educational facilities, such as universities, schools and colleges, as well as various industrial projects and transport means, in addition to finance the commercial sector.
• With regard to financing citizens to meet their necessary needs, the report showed that at the en of 2007, the number of beneficiaries from the Bank's financings for construction materials and housing reached (21204), while the balance of this financing reached about JD (233.9) million. The current balance of financing lands, houses, construction materials, transports, and construction tracks reached about JD (423.3) million which (62713) benefited from. The current balance of financing furniture reached JD (18.5) million from which (10179) benefited.
• The shareholders' equities as of 31/12/2007 reached about JD (133.5) million, compared to about JD (115.3) million in 2006 with a growth of (15.8%). The capital adequacy ratio reached (15.7%), which exceeds the specific limit according to the regulations of the Central Bank which is (12%), and also exceeds the ratio of Basel Committee which is (8%), while the ratio reached (27.8%) in accordance with the regulations of the Accounting and Auditing Organization for Islamic Financial Institutions.
• The Board of Directors has adopted the “Corporate Governance Guideline” to be applied as from 31/12/2007. This Guideline has been prepared in accordance with the “Guiding Principles of Institutions Management” set by the Islamic Financial Services Board (IFSB), the Instructions of the Central Bank, and the best related international practices. This Guideline provides the best rules, regulations and procedures that the Board and the Executive Management must follow in order to promote the trust in the Bank and in its various activities.
• The Bank has finished the plan approved by the Central Bank of Jordan to gradually transform during four years since 2004 to recording Murabaha profits from the joint investment JD funds on accrual basis. By the beginning of 2008, the Bank will totally be applying the accrual basis.
• The General Assembly in its extraordinary meeting held on 29/4/2007 has approved to amend the Articles of Association, so that the Board consists of (11) members instead of (9) members. Consequently, the Board has approved in its meeting held on 8/7/2007 to appoint H.E. Mr. Haidar Issa Murad and Global Investment House to join the Board.
• The Bank's branches in different locations in the country in 2007 reached (56) branches and (9) cash offices, since the Bank has opened two branches in Al-Thunaiya / Karak and Kreibet Essouq / Amman.
• The Bank has achieved during 2007 more developments and improvements in the field of banking technology of which the following are the most important:
• The expansion in providing SMS Service to include acknowledging the clients with any transactions about their accounts.
• Moving from (Money Gram) system to (Western Union) in presenting the express transfers and applying the Electronic Clearing System instead of the Machine one.
• Installing and operating new seven ATMs to the Bank's network to be (64) ATMs that are all linked to the clients accounts, (JONET) that consists of (630) ATMs through which are linked with the International Visa Network outside Jordan.
• Applying the control system on the branches and ATMs using video cameras.
• Applying the (VBV) Service that enables the golden or silver card holder to shop through the internet by using a password.
• Taking all the necessary arrangements to apply the new banking system in replace of the old one.
• The Bank has continued to expand in applying the investment portfolios/Muqarada Bonds and introducing it as a saving account through which these Bonds could be dealt with in a sub market, so that they may be liquidated in any time, which will raise the number of clients to deal with this financial method. The balance of investment portfolios/Muqarada bonds reached JD (218.5) million in 2007, compared to JD (166.7) million in 2006 increasing by JD (51.8) million with a growth of (31.1%).
• The Bank has continued to give prizes to the savings accounts holders, in a total amount of JD (150) thousand every year to cover the costs of Hajj and Omra, in addition to other prizes. By the beginning of 2008, the Bank has originated some prizes to be distributed to the users of the banking cards in a monthly lot by which the winner will have the money of the purchased goods. Another lot is done every six months, so that the winner will get a Volvo car model 2008. It is known that the Bank bear the value of the prizes from the shareholders funds in accordance with the legitimate Fatwa in this respect.
• In 2007, the number of the Bank's staff reached (1611). During 2007, the Bank has sent two employees to get Master degrees. Additionally, (1817) employees get involved in training courses that are arranged by the Bank's training institute and other specialized centers inside and outside Jordan, compared to (1678) employees in 2006. The courses included various banking, financial, managerial, and legitimate activities. The Bank has also continued to provide training opportunities to students from various educational institutions to be aware of its business. The number of the students reached (562) students during 2007.
• The Bank has continued to bear its social and cultural responsibilities including not only enhancing the Islamic values in the banking operations or performing social and cultural activities, but also exceeding them to positively interact with such activities through:
• During 2007, the Bank has participated in several conferences and seminars whether they were related to Jordan Islamic Bank, Development Islamic Bank, Al-Baraka Banking Group (ABG), (CIBAFI) Islamic Financial Services Board (IFSB), the Accounting & Auditing Organization for Islamic Financial Institutions (AAOIFI), or Al-Baraka Symposium and other conferences and committees which seek to develop the operations of Islamic Banks.
• The Bank continued its support for scientific research and training activities. The expenses of the Bank's training Institute, teaching and training employees, the Institute of the Central Bank, as well as the expenses of donations and sponsorship of scientific conferences and educational institutions reached about JD (189.32) thousand.
• The Bank has continued supporting many social and cultural activities, and providing donations to its various activities. The total donations provided by the Bank for such activities reached about JD (201.5) thousand including, “King Abdullah II Fund – Poverty Pockets”, “Quran Preservation Associations”, the collective wedding ceremonies arranged by Alafaf Charitable Society, the donations presented to the mosques building committees and Zakat committees, in addition to other charitable associations.
• The Bank has continued to grant interest-free loans to meet social purposes such as education, medication and marriage. The aggregate total of Al-Qard Al-Hassan loans granted by the Bank in 2007 amounted to JD (8.7) million from which (19112) citizens benefited, compared to JD (8.1) million from which (15506) benefited in 2006.
• The Bank continued the program that was launched in 1994 to finance the projects and the needs of craftsmen under Musharaka method. By the end of 2007, the financed projects have reached (71), whereas the total balance of financing reached about JD (1.6) million. In addition, the Bank offers financing by Murabaha method.
• The Bank continued managing the Mutual Insurance Fund, which was established in 1994. During 2007, the number of compensations paid from this Fund reached (114) indemnity cases amounted to JD (385) thousand. Since establishing this fund to the end of 2007, indemnities paid in compensation of (877) cases amounted to about JD (2.17) million. The balance of this fund as the end of 2007 reached about JD (17.86) million. The total number of participants in this fund reached (81371), while outstanding balance of their debts reached about JD (240) million. The Bank has raised the insurance limit as of 1/8/2007 to include people with debts reaching JD (40) thousand or less, instead of JD (25) thousand in the past years.
• The Bank has also continued to invest in the capitals of national companies whose main activities comply with the rules of Islamic Sharia' and which produce goods and services of public interest for the national community and economy. The number of companies that the Bank invested in their capitals (39) companies whereas the investment reached about JD (46.7) million.
• With respect to the Bank's plan for 2008, the Bank will totally be applying the accrual basis to record Murabaha profits as well as presenting various banking services and improving them. Also, the Bank will expand the issuance of Muqarada Bonds, the financing of Lease ending-in-ownership and financing craftsmen and small industries to help them find new career opportunities. The Bank's network plan includes opening two branches in Khalda/Amman and Al-Shoonah Al-Shamaliya/Irbid, in addition to opening three cash offices in Al-Muqabalein/Amman, Dhahyet Al-Yassmeen/Amman, and the Bank has already opened Al-Istiklal Mall office. installed and operated consistent with updating and developing the communication systems and networks to convoy to the new technologies and development in the Bank's operations by completing the remaining steps to replace the current banking system with a new one to be more able to meet the Bank's accelerating operations and to conform with banking technological developments, adopting new banking technologies and deepening and developing the Corporate Governance Principles in the Bank, as well as applying Basel II requirements
