Arab Bank PLC
With seven investors and a startup capital of 15,000 Palestinian Pounds, Arab Bank was registered on May 21, 1930 and commenced its operations in Jerusalem on July 14 of the same year. Abdul Hameed Shoman, the founder, was named the Bank’s first chairman. Since its founding, the Bank’s legacy has been to act as an active and leading partner in the socio-economic development of the region.
Trust and Commitment from the Start
After the British Mandate Authority withdrew from Palestine in 1948, the Bank lost its branches in Jafa and Haifa. When customers who were obliged to leave the country asked for their deposits, Arab Bank fully redeemed all claims. This decision won the Arab Bank a great reputation and became a historical turning point in its growth: it fostered a strong commitment from the Bank towards its customers and ingrained an enormous loyalty from its customers, which prevails to this day.
The lost branches were re-established: Haifa branch was relocated to Beirut followed by Amman, Jaffa branch in Nablus and later Ramallah. When the branch in Jerusalem was caught up in the civil disturbance, the Bank’s activities were moved to offices within the old city of Jerusalem.
In 1948, the Bank’s headquarters were transferred to Amman, Jordan, where it was officially incorporated as a public shareholding company.
A Catalyst for Arab Economies
The decades following were considered a period of rapid expansion; during the 1940’s and 1950’s, the Bank expanded its network of branches in the Arab world with 43 branches extending throughout the region, and a growing capital which has grown to reach JOD 5.5 Million.
Through extensive investments in a wide range of new industries and public projects extending from Casablanca to Baghdad, Arab Bank acted as a catalyst for Arab economic developments during a period when no one was willing to take the risk.
In Jordan the Bank’s loans for new cement, textile and food processing plants enhanced the country’s growth rate to become second after oil-rich Kuwait in the Middle East. Aside from commercial loans, the Bank provided financial assistance to educate hundreds of Arab students by sending them to Universities in the west.
The 1960’s brought along a wave of Nationalization which swept the Arab world as country after country gained independence from British and French colonial rule. Branches in Egypt and Syria were nationalized in 1961, Iraq in 1964, Aden in 1969, and finally Sudan and Libya in 1970. Within a period of ten years, Arab Bank lost a total of 25 branches. When Israel occupied the West Bank and the Gaza Strip in 1967, more branches were closed.
Undaunted, the Bank carried on its expansion. In 1961, the Bank opened its first international location, becoming the first Arab financial institution to establish a presence in Switzerland. A sister institution, Arab Bank Switzerland was established in Zurich in 1962 with another branch in Geneva opening in 1964.
Even in turbulent times, Arab Bank never defaulted on a single payment to any of its customers or partners, honoring all of its commitments regardless of the political and economical environment.
The 1970s were focused on the newly emerging oil economies of the Gulf while steadily expanding in its new home base, Jordan.
Abdul Majeed Shoman became Chairman and General Manager of Arab Bank in 1974 and aimed to expand the Bank’s activities and open new branches world wide.
Global expansion continued with the opening of branches in Frankfurt, London, Australia, New York, Singapore as well as many other cities. After the signing of the Palestinian-Israeli Oslo Peace accords, Arab Bank returned to the Palestinian territories to open a network of branches in several Palestinian towns.
Parallel to growing in size, Arab Bank expanded its scope of products and services into new areas of business. Previously emphasizing on trade and small scale construction finance, the Bank undertook a leading role in large scale project finance, both directly and through participation in syndicated loans. By the 1990’s, Arab Bank added investment banking to its established services.
Arab Bank Today
Abdul Majeed Shoman passed away on July 5th, 2005. His son, Abdel Hamid Shoman was elected Chairman upon his father’s death.
In 2005, the Arab Bank reopened operations in Syria, and performed necessary preliminary arrangements to commence its activities in Iraq, circumstances permitting.
In 2006, Arab Bank was granted the green-light to establish Europe Arab Bank (EAB), a London-based, fully-owned subsidiary, acquired 50% of MNG Bank in Turkey, and 50% of Al Nisr Al Arabi Insurance company in Jordan, thus introducing Bancassurance to its product variety.
Today, the Arab Bank Group has the largest Arab banking branch network world-wide, with over 600 branches spanning 5 continents.
On 13th August 2008, Arab Bank plc obtained the license to establish and operate a fully-owned subsidiary in Khartoum – Sudan, under the name “Arab Sudanese Bank”, which is intended to offer a full range of banking products and services that are Islamic Sharia – compliant. The bank’s paid up capital is US$ 50 million.
In 2011 Arab Bank became the first Jordanian based bank to launch a GRI checked Sustainability Report covering its activities in 2010.
In August of 2012, Arab Bank’s Board of Directors elected Sabih Masri as Chairman of the Board upon Abdel Hamid Shoman’s resignation.