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Established in 1930, Arab Bank has evolved from a small bank into one of the largest financial institutions in the Middle East. Today, the Group has the largest worldwide Arab branch network, with over 500 branches in 30 countries spanning 5 continents, participating in financial markets and centers such as Londonmarker, New Yorkmarker, Dubaimarker, Singaporemarker, Zurich, Parismarker, Frankfurtmarker, Sydneymarker and Bahrainmarker.

Arab Bank sells products in personal banking, corporate and investment banking (CIB), AB Private Banking and treasury.

History

Founding

The Arab Bank's history is interlinked with that of the Shoman family and its founder Shoman ( ). Born in 1890 in the village of Beit Haninamarker, four miles North of Jerusalemmarker, Shoman was raised in a stone hut, where he began his career at the age of seven as a stone mason working in construction sites. Shoman emigrated to the United States of Americamarker at the age of 20 and became a door-to-door salesman, selling dry-good products in New Yorkmarker and Baltimoremarker. His success led him to expand and start a dress-making factory in Manhattanmarker’s garment district.

Shoman decided to return to the region of Palestine and arranged for a meeting in Cairomarker with Talaat Pasha Harb, the Chairman of the Board of Directors of the Banque Misr. Shoman proposed the idea of establishing a joint Egyptian-Palestinian bank, with a capital of 100,000 Palestinian Pounds; however, political developments in the region forced Harb to put the project on hold.

Shoman moved forward with his plan 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 Majeed Shoman

Shoman’s son, Abdul Majeed, was born in Palestine while Shoman was away. At the age of one, his mother died and he was taken into the care of his paternal grandmother.Shoman wanted his son to join him in the US; however, he believed that the boy’s education in his homeland and his mastery of Arabic were more important. He waited until his son completed his primary schooling at Beit Hanina, and his studies in al-Rawda School in Jerusalem before sending for him to come to the US.Upon Abdul Majeed’s arrival to the US, he was enrolled in a Secondary School in the suburbs of New York, where he met his father for the first time at the young age of 14. Abdul Majeed obtained both his Bachelors and Masters Degree in Economics and Banking at New York Universitymarker (NYU) in 1931, after which he returned to Palestine to assist his father in managing the newly established Arab Bank.

Trust and Commitment

Abdul Majeed worked hard under the guidance of his father. Both Shomans spared no pains in safe-guarding the Bank and the clients' interests. After the British Mandate Authority withdrew from Palestine in 1948, the Bank lost its branches in Jafa and Haifamarker. When customers who were obliged to flee outside the country asked for their deposits, the Shomans insisted on fully redeeming 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 Beirutmarker followed by Ammanmarker, Jaffamarker branch in Nablusmarker and later Ramallahmarker. 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. The Bank transferred its headquarters 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 Arab World, 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 Casablancamarker to Baghdadmarker, the Shomans’ new Arab Bank acted as a catalyst for Arab economic developments during a period when no one was willing to take the risk. Arab Bank loans created jobs for more than 100,000 employees. 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 Kuwaitmarker in the Middle East. Aside from commercial loans, Shoman gave millions of his own and the Bank’s money to educate hundreds of Arab students by sending them to Universities in the west. Ironically, the unschooled Shoman built a USD 600,000 teachers training college in his native village of Beit Hanina.

Nationalization

The 1960s 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 Egyptmarker and Syriamarker were nationalized in 1961, Iraqmarker in 1964, Adenmarker in 1969, and finally Sudanmarker and Libyamarker in 1970. Within a period of ten years, Arab Bank lost a total of 25 branches. When Israelmarker occupied the West Bankmarker and the Gaza Stripmarker 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 Switzerlandmarker. A sister institution, Arab Bank Switzerland was established in Zürichmarker 1962 with another branch in Genevamarker opening in 1964.

Even in turbulent times, the 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.

Steady Expansion

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 after his father died in 1974, whereby he carried on his father's mission. The Bank was already well-established with a sound financial reputation and structure. Abdul Majeed was determined to expand the Bank's activities, and set out to open new branches world wide.

Global expansion continued with the opening of branches in Frankfurtmarker, Londonmarker, Australia, New Yorkmarker, Singaporemarker as well as many other cities. After the signing of the Palestinian-Israeli Oslo Peace Accords, Arab Bank was invited to return 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. With more than 30 years of experience at the Bank, Abdul Majeed’s son, Abdel Hamid, succeeded to occupy the position of CEO in May, 2000.

Shoman’s vision combined with courage and determination navigated the Bank through difficult periods, and expanded his enterprise beyond its goals across the Arab World and beyond.

2004 Terrorism Lawsuit

On 2004-02-26 Israelimarker soldiers raided Arab Bank's al-Birehmarker branch, seizing bank records and funds belonging to accused terrorists. Using documents seized in the raid, U.S.marker lawyers launched a $875 Million lawsuit against Arab Bank on the behalf of the U.S. and Israeli terror victims. According to lawyers filing the lawsuit, Arab Bank was engaged both in laundering money used to finance terrorism and in paying off the families of suicide bombers. Specifically, lawyers claimed that Arab Bank was knowingly complicit in aiding the Saudi Arabianmarker government in transferring more than $4 billion to Palestinian terrorist groups. On 2005-09-02 a federal judge upheld the validity of the suit, permitting the lawsuit to proceed. As of 2009-06-10 the suit is still ongoing.

Arab Bank Today

Abdul Majeed Shoman died on July 5, 2005. His son was elected Chairman upon his father’s death.

In 2005, the Arab Bank reopened operations in Syriamarker, 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. It also acquired 50% of MNG Bank in Turkeymarker, 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 worldwide, with over 500 branches in 30 countries, spanning 5 continents.

Profile

The bank works in developing Arab economies through financing strategic infrastructural projects across the Middle East /North Africa region (MENA). With Headquarters based in Amman, Jordan, the Arab Bank constitutes the first private sector financial institution in the Arab World.

The Arab Bank is ranked amongst the largest international financial institutions, with a rating of A- from Fitch, A- from Standard & Poor and A3 from Moody’s. The bank has a capital base of over USD 5.5 Billion and Total Assets of over USD 50 billion. Pretax Income reached over USD 1 Billion in 2008, with a Net Income of USD 850 Million for the year 2008.

The Arab Bank has 500 branches spanning 30 countries in 5 continents. It enjoys prominent positions in key financial markets and centers such as Londonmarker, New Yorkmarker, Dubaimarker, Singaporemarker, Zurich, Parismarker, Frankfurtmarker, Sydneymarker and Bahrainmarker.

They sell products in personal banking, corporate and investment banking (CIB), AB Private Banking and Treasury, to individuals, corporations, government agencies and other international financial institutions.

Community programs

In 1931, Arab Bank founder Abdul Hameed Shoman donated a 100 Palestinian Pounds to building a University in Jerusalemmarker.

In August 2006, and during the royal visit by His Majesty King Abdullah II, Arab Bank donated 2 Million Jordanian Dinar (USD 2.8 Million), to support governmental poverty alleviation efforts in the Southern parts of the Kingdom.

Arab Bank's reaction towards the human tragedy caused by Hurricane Katrina in the United Statesmarker was rapid and determined, contributing with a symbolic amount of USD 100,000 to the American Red Crossmarker Disaster Relief Fund.

Investor Relations

Since its establishment in Jerusalem on May 21, 1930 as Arab Bank Limited, the Arab Bank has continued to grow and improve. It began operations on July 14 of the same year. On January 31, 1990, the name changed to Arab Bank plc in accordance with Section 318 of the Jordanian Companies Act # 1 of 1989.

Arab Bank was the first public shareholding company listed in the Amman Stock Exchange in 1978.

The Bank is constantly improving its disclosure levels and introducing higher levels of transparency through its financial statements, enabling both shareholders and customers to appreciate its ever-growing earning power, its low risk level, and its strong financial position.

References

External links




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