VOL. XLIV 
No 31
30 July 2001 

Kuwait Investment Authority Sells Off Stake In Arab Bank For $96.7Mn

The Kuwait Investment Authority (KIA) sold off its 400,000 shares in Jordan’s Arab Bank on 24 July to Jordan’s state-run Social Security Corporation (SSC), following several months of speculation as to who would take up the holding. The shares were purchased for JD68.6mn ($96.7mn), or JD171.5 per share, increasing the SSC’s stake in the bank and reinforcing its Jordanian ownership. The move also secured a seat on the bank’s board for the SSC, whose director general, Mr Ahmad 'Abd al-Fattah, described the deal as a “national political and economic victory preventing private foreign control over the Arab Bank.” The move increases SSC’s stake in the bank from 5.8% to 9.8%. Kuwait’s Gulf Bank earlier sold its 100,440 shares in the bank to the corporation at a price of JD167 ($235) per share.

Mr Fattah’s comments were in response to rumors earlier in the year that Lebanese Prime Minister Rafiq al-Hariri was seeking to gain majority control of the bank and relocate its headquarters to Beirut (MEES, 4 June). At the time the KIA denied that it wished to divest its stake in the bank, with financial circles alleging that Arab Bank’s CEO, Mr 'Abd al-Majid Shoman, had been personally responsible for convincing the Kuwaitis not to sell (MEES, 9 July). The Arabic daily al-Quds noted on 24 July that the largest single shareholding of the bank is that of Mr Shoman’s recently deceased younger brother, Khalid Shoman (MEES, 9 July), which is now held by his wife, Suha Shoman.

 

The bank announced on 17 July that it had achieved an 11.85% rise in net income for 1H 2001, with net profits of $167.184mn compared to $149.468mn for the same period the previous year. Arab Bank recorded a net profit income of $241.2mn in 2000, a rise of 7% over the previous year on the back of a 9.8% rise in net interest income and a 2.9% rise in net commission income (MEES, 23 April). The profit level fell short of the preceding year’s 8% rise, but represented a significant upturn after three years of relatively flat profits (MEES, 1 May).