The Governor of Palestine Monetary Authority Praises - during a Press Conference - the Success of the Acquisition of the Assets and Liabilities of the Jordan Commercial Bank by the National Bank
July 29, 2020 His Excellency the Governor of Palestine Monetary Authority Mr. Azzam Shawwa praised the success of the acquisition of the assets and liabilities of Jordan Commercial Bank by the National Bank, noting the contributions of the two banks and their role in providing advanced banking service.
This came during the press conference, which was held today in Ramallah, to announce the completion of the National Bank’s acquisition of the assets and liabilities of Jordan Commercial Bank in Palestine. His Excellency the Minister of National Economy Khaled Assili and Chairman of the Board of Directors of the National Bank Talal Nassereddine took part in the press conference as well as the Chairman of the Board of Directors of Jordan Commercial Bank Michael Sayegh, who participated through the platform of the visual meetings from Amman.
The Director General of Palestine Capital Market Authority Mr. Buraq Nabulsi, the Director General of Palestine Stock Exchange Mr. Ahmed Aweida, a number of members of the Board of Directors of the two banks and the executive management and a number of journalists also took part in the press conference.
Mr. Shawwa said that Palestine Monetary Authority was constantly working to enhance the solvency and financial soundness of the Palestinian banking system and strengthen its ability to cope with the shocks and risks surrounding the banking environment in order to ensure the safety of depositors' funds and the rights of clients of banks, which would reflect positively on financial stability as one of the most important objectives that Palestine Monetary Authority seeks to achieve.
Mr. Shawwa explained that the mergers and acquisitions are based on Palestine Monetary Authority Law No. (2) of 1997 and the Banking Law No. 9 of 2010. They come in the context of the creation of strong banking institutions capable of competition and innovation and keep up with the latest global developments in the field of banking.
Mr. Shawwa stressed that the acquisition will not affect the total assets and liabilities of the banking system, pointing out that they had reached $17.2 billion as of the first quarter of 2020, distributed to 13 licensed banks, while the total deposits amounted to $14.5 billion, and the total facilities amounted to $9.5 billion for the same period.
The Chairman of the National Bank Talal Nassereddine confirmed that under the acquisition deal, the National Bank acquired the assets and liabilities of Jordan Commercial Bank in Palestine, in return for 15% of the National Bank and a seat in the Board of Directors of the National Bank to Jordan Commercial Bank. The value of the deal shall be covered by National Bank's special underwriting offer for Jordan Commercial Bank worth 13.76 million shares to increase the Bank's paid capital to $92 million.
Nassereddine pointed out the strength of the National Bank in the Palestinian banking system. He confirmed that the National Bank is the second largest Palestinian bank and with the completion of the acquisition of Jordan Commercial Bank would exceed the capital adequacy ratio of 15%, which would give the bank additional strength to absorb crises and face any potential risks. Nassereddine said, “We are talking today about assets amounting to $2.7 billion, customer deposits amounting to $1.93 billion, and credit portfolio facilities $1.6 billion.
Nassereddine noted that in addition to the positive impact of the deal on enhancing the Bank's competitive position and financial performance, the National Bank's network of branches will be joined by seven new branches, bringing the National Bank's branches to 35 branches and offices across the country.
Nassereddine added that the National Bank was the bank with the highest acquisitions and mergers in the Palestinian banking market, as this was the fourth for the Bank, following the acquisition of Jordanian Bank el-Etihad in Palestine in 2015, the leadership of a shareholders' coalition to acquire a controlling stake in Palestine Islamic Bank in 2018, and the launch of the Bank in 2012 after the merger of the Welfare Bank for Microfinance and the Arab Palestinian Investment Bank. Nassereddine stressed the importance of acquisitions and mergers in the creation of strong and effective banking institutions that would strengthen the Palestinian banking system and develop the national economy and ensure its growth and prosperity.
With regard to the rights of clients at Jordan Commercial Bank, Nassereddine said that all contracts between customers and Jordan Commercial Bank would remain unchanged and that there would be no change in their daily dealings with the Bank. He added that the employees of Jordan Commercial Bank would also be among the employees of the National Bank.
Nassereddine also spoke of the achievements of the National Bank, declaring that the National Bank has become a bank of systemic importance, which means that the Palestinian banking system is directly affected by the bank's performance. This classification makes the Bank more responsible to continue the growth and development process that it began with.
Nassereddine described the Bank’s digital transformation journey, noting that Jordan Commercial Bank's clients in Palestine would benefit from the advanced digital services and solutions that the National Bank had been able to develop, stressing the Bank's investment in digital technology and that it would offer more digital services and solutions to provide a unique and sophisticated banking experience for its clients.
Michael Sayegh said that the presence of Jordan Commercial Bank in Palestine had strategic dimension, which had won our support in the past and would continue in the future under the umbrella of the National Bank, which would enhance our presence through a larger banking system with deeper roots, which would contribute to the diversification of the asset base and revenues.
Sayegh added that he was personally looking forward to actively participating in the Board of Directors of the National Bank in cooperation with the finest Palestinian businessmen.
His Excellency the Minister of National Economy Khaled Assili said that the strategic partnership between the two banks was aimed at advancing the national economy, which would create stronger banking institutions and enhance the opportunities to respond to the development of the national economy in light of the current health pandemic. This would be done by supporting small and medium-size enterprises and encouraging young people and women to produce and contribute actively to building our national economy.
Assili added, “Addressing the repercussions of the health pandemic on various economic sectors requires all components of the national economy to cooperate and partner in the recovery of the economy by providing the necessary incentives and facilities that serve to maintain the sustainability and continuity of the facilities. We emphasize the importance of financing for production, which plays an important role in recovering from the consequences of the health pandemic and creating employment opportunities.”
It is worth noting that Jordan Commercial Bank has been one of the banks operating in the Hashemite Kingdom of Jordan since 1977. After the National Bank’s acquisition of its business in Palestine, the number of banks in Palestine becomes 13, including 6 Palestinian banks. The rest are foreign banks.