Arab Bank plc Profit Announcement

January 2006

Shoman: Our success is a result of the trust gained over the last 75 years

Arab Bank is closer to becoming one of the largest 100 banks worldwide

The Arab Bank Group's 2005 net profits rose to US$503.2 after deducting taxes and provisions, which is the highest level of profits recorded since the inception of the Arab Bank 75 years ago. This is an absolute increase of US$176.3 million over the profits of 2004, or a growth rate of 53.9%. 2004's profits had already witnessed a 43.5% jump compared to 2003.

The Arab Bank's Board of Directors agreed in a meeting, held on Thursday, January 26 th and chaired by Mr. Abdel Hamid Shoman, Chairman of the Board and CEO, to recommend to the General Assembly a 51.7% increase in the cash dividend to be distributed to shareholders. The proposed 2005 dividends will reach JD53.4 million compared to the 2004 dividends of JD35.2 million.

Shaman said that Arab Bank Group's unprecedented profits in 2005 were a result of prudent banking policies and the sound strategy that was professionally executed by the bank's senior management across various business lines.

Mr. Shaman added that the Arab Bank has been able to deal effectively with the evolving economic and non-economic developments both regionally and globally. The Bank continued in 2005 to play an integral role in financing consumers, corporations, institutions, as well as mega projects, while increasing lending and deposit gathering activities and addressing the requirements of investors.

Responding to a question regarding the performance of the Bank's Jordan operations, Shoman said that the 2005 profits of the Jordan branches had amounted to JD97.7 million before deducting taxes and government fees. The net profit was JD73.2 million compared to JD37.2 million in 2004, an increase of JD36 million which is equivalent to a 96.8% growth rate.

Shoman confirmed that the Bank's key performance indicators have shown accelerated progress, with shareholders' equity growing by 13.5% to US$3,885 million, before the increase of the capital.

He added that the increase of the Bank's capital will raise shareholders' equity to US$5,400 million, a growth rate of 40%. The additional capital will further bolster the Arab Bank's suite of products and services as well as allow the Bank to keep pace with developments in the global banking arena.

Shoman added that the figures appearing in the financial statements of 31/12/2005 highlight the Bank's fruitful efforts to grow its loans portfolio in 2005 by 12.8% and management's eagerness to improve the overall quality of this portfolio. The performance indicators point to the Group's return on shareholders' equity having improved to 14% up from 10% in 2004.

The ratio of operating expenses to total revenues also improved to 47.0% in 2005 compared to 53.9% in 2004. During the year, the Bank was able to maintain excellent liquidity levels reaching 55.8% at the end of 2005, despite increased demand for Jordan dinar-denominated facilities as well as other currencies.

Meanwhile, it is noteworthy that the Bank has been successfully executing its share issue, which began last Sunday and will continue until February 5 th , amidst strong demand from shareholders to subscribe to this capital increase. The total issue size will amount to JD1,080 million, which will rank the Arab Bank very close to the list of the top 100 banks worldwide.

Mr. Shoman concluded by saying that the Arab Bank, which was established by the late Abdel Hamid Shoman in 1930, has achieved exceptional growth rates, which has allowed it to become a leading banking institution with a presence across most major financial and commercial centers around the world. This success is a result of the deep-rooted trust that has been accumulated over the last 75 years.

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