Arab Bank
Encyclopedia
Arab Bank is one of the largest financial institutions in the Middle East
. Established in Jerusalem in Palestine
in 1930 as a small bank
, it has evolved into a group with the largest worldwide Arab network with over 500 branches in 30 countries on five continents, participating in financial markets and centers such as London
, New York
, Dubai
, Singapore
, Cyprus
, Zurich
, Paris
, Frankfurt
, Sydney
and Bahrain
.
Arab Bank sells products in personal banking, corporate and investment banking (CIB), AB Private Banking and treasury.
, four miles north of Jerusalem, Shoman was raised in a stone hut, where he began his career at the age of seven as a stonemason on construction sites. Shoman emigrated to the United States of America at the age of 20 and went door-to-door selling dry-goods in New York
and Baltimore
. His success led him to expand and start a dress-making factory in Manhattan
’s garment district.
Shoman decided to return to Palestine
and arranged for a meeting in Cairo
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.
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 University
(NYU) in 1931, after which he returned to Palestine to assist his father in managing the newly established Arab Bank.
. 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 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. The Bank transferred its headquarters to Amman, Jordan, where it was officially incorporated as a public shareholding company.
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The decades following were considered a period of rapid expansion; during the 1940s 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 Casablanca
to Baghdad
, 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 Kuwait
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.
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 witzerland].. A sister institution, Arab Bank Switzerland was established in Zürich
1962 with another branch in Geneva
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.
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 Frankfurt
, London
, Australia
, New York
, Singapore
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 1990s, 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.
i soldiers raided Arab Bank's al-Bireh
branch, seizing bank records and funds belonging to accused terrorists. Using documents seized in the raid, U.S.
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 Arabia
n 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 2010-07-13 the suit is still ongoing.
Terrorism Lawsuit =
A set of related U.S. civil suits filed in federal district court in Brooklyn, N.Y., against Arab Bank PLC allege the bank knowingly routed compensation payments from Saudi donors to suicide bombers' families. The suits' plaintiffs also allege the bank helped finance groups such as Hamas and Palestinian Islamic Jihad, the U.S. considers terrorist organizations. Arab Bank denies the charges.
Following six years of legal wrangling, the first case, involving Americans allegedly killed by Hamas, is winding its way toward trial at the Brooklyn court.
There, in July, Judge Nina Gershon imposed harsh sanctions on Arab Bank after it refused to hand over client records in more than a half dozen related civil cases, citing bank secrecy laws in Jordan and other countries in which it operates. Judge Gershon said Arab Bank should be punished to stop it from gaining an unfair advantage from its "recalcitrance" to produce the records.
She found the available evidence showed the missing documents would likely substantiate the plaintiffs' claims. So she ruled that a jury at an upcoming trial would be free to infer, from the bank's refusal to produce the records, that it knowingly provided financial services to terrorists.
Under the order, the bank would also be barred from arguing that it didn't know that people who received payments were terrorists, or that it didn't intend to commit any offenses—a key defense—because those assertions could conceivably be proved or disproved by the missing documents.
Jordan's brief, filed last month to New York's Second Circuit Court of appeals, assailed the July order as an "affront to the Kingdom's sovereignty."
Arab Bank denies the allegations against it, saying it merely provided "routine banking services" to people it didn't know were implicated in terrorism.
"Arab Bank has a long history of promoting economic development, stability and security in the Middle East, including in Jordan, one of America's closest allies, and the territories under the control of the Palestinian Authority," says Kevin Walsh, an attorney for the bank.
The bank has asked the New York appeals court to examine whether Judge Gershon's order went too far, denying it a chance to defend itself.
Arab Bank has also received expressions of support from the Lebanese government and the Palestinian Authority, which said in letters to the court that lifting their privacy laws would cause people to shun the formal banking system.
Arab Bank paid a $24 million civil penalty in 2005 after U.S. banking regulators found it lacked adequate money-laundering controls to prevent it from being used for terrorist financing
. The bank said it agreed to the fine and the consent order to
put the matter behind it.
"For the foregoing reasons, plaintiffs motion for sanctions is GRANTED. At trial, the jury will be instructed that, based on defendant's failure to produce documents, it may, but is not required to, infer: (1) that defendant provided financial services to organizations designated by the United States as Foreign Terrorist Organizations, and to individuals affiliated with the FTOs; (2) that defendant processed and distributed payments on behalf of the Saudi Committee to terrorists, including those affiliated with named terrorist organizations and those who are unaffiliated, their relatives, or representatives; and (3) that defendant did these acts knowingly and purposefully. In addition, (4) defendant is precluded from making any argument or offering any evidence regarding its state *58 of mind or any other issue that would find proof or refutation in withheld documents; (5) all requests for admissions in plaintiffs' First Set of Requests for Admissions which defendant refused to answer on foreign bank secrecy grounds are deemed admitted, and any documents referred to in those requests, which plaintiffs obtained from sources other than defendant, are deemed authentic and are admissible as such at trial; and (6) defendant is prohibited from introducing in pre-trial motions or at trial any evidence withheld on foreign bank secrecy grounds. Finally, plaintiffs are awarded attorneys' fees and costs incurred as a result of defendant's production failures and the resulting sanctions litigation."
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
. It also acquired 50% of MNG Bank in Turkey
(now kwons as Turkland Bank), and 50% of Al Nisr Al Arabi Insurance company in Jordan, thus introducing Bancassurance to its product variety. Also, the group established Arab Bank-Syria in Syria and Arab Capital investements company in Dubai.
Today, the Arab Bank Group has the largest Arab banking branch network worldwide, with over 500 branches in 30 countries, spanning 5 continents.
). 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 London
, New York
, Dubai
, Singapore
, Zurich
, Paris
, Frankfurt
, Sydney
and Bahrain
.
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.
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 States
was rapid and determined, contributing with a symbolic amount of USD 100,000 to the American Red Cross Disaster Relief Fund.
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.
Middle East
The Middle East is a region that encompasses Western Asia and Northern Africa. It is often used as a synonym for Near East, in opposition to Far East...
. Established in Jerusalem in Palestine
Mandate Palestine
Mandate Palestine existed while the British Mandate for Palestine, which formally began in September 1923 and terminated in May 1948, was in effect...
in 1930 as a small bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
, it has evolved into a group with the largest worldwide Arab network with over 500 branches in 30 countries on five continents, participating in financial markets and centers such as London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, Dubai
Dubai
Dubai is a city and emirate in the United Arab Emirates . The emirate is located south of the Persian Gulf on the Arabian Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi...
, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
, Cyprus
Cyprus
Cyprus , officially the Republic of Cyprus , is a Eurasian island country, member of the European Union, in the Eastern Mediterranean, east of Greece, south of Turkey, west of Syria and north of Egypt. It is the third largest island in the Mediterranean Sea.The earliest known human activity on the...
, Zurich
Zürich
Zurich is the largest city in Switzerland and the capital of the canton of Zurich. It is located in central Switzerland at the northwestern tip of Lake Zurich...
, Paris
Paris
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...
, Frankfurt
Frankfurt
Frankfurt am Main , commonly known simply as Frankfurt, is the largest city in the German state of Hesse and the fifth-largest city in Germany, with a 2010 population of 688,249. The urban area had an estimated population of 2,300,000 in 2010...
, Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...
and Bahrain
Bahrain
' , officially the Kingdom of Bahrain , is a small island state near the western shores of the Persian Gulf. It is ruled by the Al Khalifa royal family. The population in 2010 stood at 1,214,705, including 235,108 non-nationals. Formerly an emirate, Bahrain was declared a kingdom in 2002.Bahrain is...
.
Arab Bank sells products in personal banking, corporate and investment banking (CIB), AB Private Banking and treasury.
Founding
The Arab Bank's history is interlinked with that of the Shoman family and its founder Abdul Hameed Shoman . Born in 1890 in the village of Beit HaninaBeit Hanina
Beit Hanina is a Palestinian neighborhood in East Jerusalem on the road to Ramallah. It is bordered by Hizma to the east, Shuafat to the south, Beit Iksa and Nabi Samwil to the west, and Bir Nabala, al-Jib, Kafr Aqab and ar-Ram to the north. The total area of Beit Hanina is 20 sq. kilometers...
, four miles north of Jerusalem, Shoman was raised in a stone hut, where he began his career at the age of seven as a stonemason on construction sites. Shoman emigrated to the United States of America at the age of 20 and went door-to-door selling dry-goods in New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
and Baltimore
Baltimore
Baltimore is the largest independent city in the United States and the largest city and cultural center of the US state of Maryland. The city is located in central Maryland along the tidal portion of the Patapsco River, an arm of the Chesapeake Bay. Baltimore is sometimes referred to as Baltimore...
. His success led him to expand and start a dress-making factory in Manhattan
Manhattan
Manhattan is the oldest and the most densely populated of the five boroughs of New York City. Located primarily on the island of Manhattan at the mouth of the Hudson River, the boundaries of the borough are identical to those of New York County, an original county of the state of New York...
’s garment district.
Shoman decided to return to Palestine
Palestine
Palestine is a conventional name, among others, used to describe the geographic region between the Mediterranean Sea and the Jordan River, and various adjoining lands....
and arranged for a meeting in Cairo
Cairo
Cairo , is the capital of Egypt and the largest city in the Arab world and Africa, and the 16th largest metropolitan area in the world. Nicknamed "The City of a Thousand Minarets" for its preponderance of Islamic architecture, Cairo has long been a centre of the region's political and cultural life...
with Talaat Pasha Harb
Talaat Pasha Harb
Talaat Pasha Harb was a leading Egyptian economist and founder of Banque Misr , and its group of companies, in May 1920.- His works :...
, the Chairman of the Board of Directors of the Banque Misr
Banque Misr
Banque Misr is an Egyptian bank founded by industrialist Talaat Pasha Harb in 1920.- Operations :The bank has branch offices in all of Egypt's governorates, and currency exchange and work permit offices for overseas workers in Egypt.Related organizations: Banque Misr presents long lists of its...
. 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 University
New York University
New York University is a private, nonsectarian research university based in New York City. NYU's main campus is situated in the Greenwich Village section of Manhattan...
(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 HaifaHaifa
Haifa is the largest city in northern Israel, and the third-largest city in the country, with a population of over 268,000. Another 300,000 people live in towns directly adjacent to the city including the cities of the Krayot, as well as, Tirat Carmel, Daliyat al-Karmel and Nesher...
. 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 Beirut
Beirut
Beirut is the capital and largest city of Lebanon, with a population ranging from 1 million to more than 2 million . Located on a peninsula at the midpoint of Lebanon's Mediterranean coastline, it serves as the country's largest and main seaport, and also forms the Beirut Metropolitan...
followed by Amman
Amman
Amman is the capital of Jordan. It is the country's political, cultural and commercial centre and one of the oldest continuously inhabited cities in the world. The Greater Amman area has a population of 2,842,629 as of 2010. The population of Amman is expected to jump from 2.8 million to almost...
, Jaffa
Jaffa
Jaffa is an ancient port city believed to be one of the oldest in the world. Jaffa was incorporated with Tel Aviv creating the city of Tel Aviv-Yafo, Israel. Jaffa is famous for its association with the biblical story of the prophet Jonah.-Etymology:...
branch in Nablus
Nablus
Nablus is a Palestinian city in the northern West Bank, approximately north of Jerusalem, with a population of 126,132. Located in a strategic position between Mount Ebal and Mount Gerizim, it is the capital of the Nablus Governorate and a Palestinian commercial and cultural center.Founded by the...
and later Ramallah
Ramallah
Ramallah is a Palestinian city in the central West Bank located 10 kilometers north of Jerusalem, adjacent to al-Bireh. It currently serves as the de facto administrative capital of the Palestinian National Authority...
. 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
Casablanca
Casablanca is a city in western Morocco, located on the Atlantic Ocean. It is the capital of the Grand Casablanca region.Casablanca is Morocco's largest city as well as its chief port. It is also the biggest city in the Maghreb. The 2004 census recorded a population of 2,949,805 in the prefecture...
to Baghdad
Baghdad
Baghdad is the capital of Iraq, as well as the coterminous Baghdad Governorate. The population of Baghdad in 2011 is approximately 7,216,040...
, 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 Kuwait
Kuwait
The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...
in the Middle East
Middle East
The Middle East is a region that encompasses Western Asia and Northern Africa. It is often used as a synonym for Near East, in opposition to Far 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 EgyptEgypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
and Syria
Syria
Syria , officially the Syrian Arab Republic , is a country in Western Asia, bordering Lebanon and the Mediterranean Sea to the West, Turkey to the north, Iraq to the east, Jordan to the south, and Israel to the southwest....
were nationalized in 1961, Iraq
Iraq
Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....
in 1964, Aden
Aden
Aden is a seaport city in Yemen, located by the eastern approach to the Red Sea , some 170 kilometres east of Bab-el-Mandeb. Its population is approximately 800,000. Aden's ancient, natural harbour lies in the crater of an extinct volcano which now forms a peninsula, joined to the mainland by a...
in 1969, and finally Sudan
Sudan
Sudan , officially the Republic of the Sudan , is a country in North Africa, sometimes considered part of the Middle East politically. It is bordered by Egypt to the north, the Red Sea to the northeast, Eritrea and Ethiopia to the east, South Sudan to the south, the Central African Republic to the...
and Libya
Libya
Libya is an African country in the Maghreb region of North Africa bordered by the Mediterranean Sea to the north, Egypt to the east, Sudan to the southeast, Chad and Niger to the south, and Algeria and Tunisia to the west....
in 1970. Within a period of ten years, Arab Bank lost a total of 25 branches. When Israel
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
occupied the West Bank
West Bank
The West Bank ) of the Jordan River is the landlocked geographical eastern part of the Palestinian territories located in Western Asia. To the west, north, and south, the West Bank shares borders with the state of Israel. To the east, across the Jordan River, lies the Hashemite Kingdom of Jordan...
and the Gaza Strip
Gaza Strip
thumb|Gaza city skylineThe Gaza Strip lies on the Eastern coast of the Mediterranean Sea. The Strip borders Egypt on the southwest and Israel on the south, east and north. It is about long, and between 6 and 12 kilometres wide, with a total area of...
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 witzerland].. A sister institution, Arab Bank Switzerland was established in Zürich
Zürich
Zurich is the largest city in Switzerland and the capital of the canton of Zurich. It is located in central Switzerland at the northwestern tip of Lake Zurich...
1962 with another branch in Geneva
Geneva
Geneva In the national languages of Switzerland the city is known as Genf , Ginevra and Genevra is the second-most-populous city in Switzerland and is the most populous city of Romandie, the French-speaking part of Switzerland...
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 ManagerGeneral manager
General manager is a descriptive term for certain executives in a business operation. It is also a formal title held by some business executives, most commonly in the hospitality industry.-Generic usage:...
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 Frankfurt
Frankfurt
Frankfurt am Main , commonly known simply as Frankfurt, is the largest city in the German state of Hesse and the fifth-largest city in Germany, with a 2010 population of 688,249. The urban area had an estimated population of 2,300,000 in 2010...
, London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
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 1990s, 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 IsraelIsrael
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
i soldiers raided Arab Bank's al-Bireh
Al-Bireh
al-Bireh or el-Bira is a Palestinian city adjacent to Ramallah in the central West Bank, north of Jerusalem. It is situated on the central ridge running through the West Bank and is above sea level, covering an area of...
branch, seizing bank records and funds belonging to accused terrorists. Using documents seized in the raid, U.S.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
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 Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
n 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 2010-07-13 the suit is still ongoing.
Terrorism Lawsuit =
A set of related U.S. civil suits filed in federal district court in Brooklyn, N.Y., against Arab Bank PLC allege the bank knowingly routed compensation payments from Saudi donors to suicide bombers' families. The suits' plaintiffs also allege the bank helped finance groups such as Hamas and Palestinian Islamic Jihad, the U.S. considers terrorist organizations. Arab Bank denies the charges.
Following six years of legal wrangling, the first case, involving Americans allegedly killed by Hamas, is winding its way toward trial at the Brooklyn court.
There, in July, Judge Nina Gershon imposed harsh sanctions on Arab Bank after it refused to hand over client records in more than a half dozen related civil cases, citing bank secrecy laws in Jordan and other countries in which it operates. Judge Gershon said Arab Bank should be punished to stop it from gaining an unfair advantage from its "recalcitrance" to produce the records.
She found the available evidence showed the missing documents would likely substantiate the plaintiffs' claims. So she ruled that a jury at an upcoming trial would be free to infer, from the bank's refusal to produce the records, that it knowingly provided financial services to terrorists.
Under the order, the bank would also be barred from arguing that it didn't know that people who received payments were terrorists, or that it didn't intend to commit any offenses—a key defense—because those assertions could conceivably be proved or disproved by the missing documents.
Jordan's brief, filed last month to New York's Second Circuit Court of appeals, assailed the July order as an "affront to the Kingdom's sovereignty."
Arab Bank denies the allegations against it, saying it merely provided "routine banking services" to people it didn't know were implicated in terrorism.
"Arab Bank has a long history of promoting economic development, stability and security in the Middle East, including in Jordan, one of America's closest allies, and the territories under the control of the Palestinian Authority," says Kevin Walsh, an attorney for the bank.
The bank has asked the New York appeals court to examine whether Judge Gershon's order went too far, denying it a chance to defend itself.
Arab Bank has also received expressions of support from the Lebanese government and the Palestinian Authority, which said in letters to the court that lifting their privacy laws would cause people to shun the formal banking system.
Arab Bank paid a $24 million civil penalty in 2005 after U.S. banking regulators found it lacked adequate money-laundering controls to prevent it from being used for terrorist financing
Terrorist Financing
Terrorist financing came into limelight after the events of terrorism on 9/11. The US passed the USA PATRIOT Act to, among other reasons, attempt thwarting the financing of terrorism and anti-money laundering making sure these were given some sort of adequate focus by US financial institutions...
. The bank said it agreed to the fine and the consent order to
put the matter behind it.
Recent Major Ruling (13 July 2010)
The recent major ruling by the Court on Plaintiffs' motion for sanctions predicated upon the Bank's refusal to produce key evidence is a major victory for Plaintiffs:"For the foregoing reasons, plaintiffs motion for sanctions is GRANTED. At trial, the jury will be instructed that, based on defendant's failure to produce documents, it may, but is not required to, infer: (1) that defendant provided financial services to organizations designated by the United States as Foreign Terrorist Organizations, and to individuals affiliated with the FTOs; (2) that defendant processed and distributed payments on behalf of the Saudi Committee to terrorists, including those affiliated with named terrorist organizations and those who are unaffiliated, their relatives, or representatives; and (3) that defendant did these acts knowingly and purposefully. In addition, (4) defendant is precluded from making any argument or offering any evidence regarding its state *58 of mind or any other issue that would find proof or refutation in withheld documents; (5) all requests for admissions in plaintiffs' First Set of Requests for Admissions which defendant refused to answer on foreign bank secrecy grounds are deemed admitted, and any documents referred to in those requests, which plaintiffs obtained from sources other than defendant, are deemed authentic and are admissible as such at trial; and (6) defendant is prohibited from introducing in pre-trial motions or at trial any evidence withheld on foreign bank secrecy grounds. Finally, plaintiffs are awarded attorneys' fees and costs incurred as a result of defendant's production failures and the resulting sanctions litigation."
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 Syria
Syria
Syria , officially the Syrian Arab Republic , is a country in Western Asia, bordering Lebanon and the Mediterranean Sea to the West, Turkey to the north, Iraq to the east, Jordan to the south, and Israel to the southwest....
, 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
Subsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
. It also acquired 50% of MNG Bank in Turkey
Turkey
Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...
(now kwons as Turkland Bank), and 50% of Al Nisr Al Arabi Insurance company in Jordan, thus introducing Bancassurance to its product variety. Also, the group established Arab Bank-Syria in Syria and Arab Capital investements company in Dubai.
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 (MENAMENA
The term MENA, for "Middle East and North Africa", is an acronym often used in academic, military planning and business writing.The term covers an extensive region, extending from Morocco to Iran, including the majority of both the Middle Eastern and Maghreb countries...
). 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 London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, Dubai
Dubai
Dubai is a city and emirate in the United Arab Emirates . The emirate is located south of the Persian Gulf on the Arabian Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi...
, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
, Zurich
Zürich
Zurich is the largest city in Switzerland and the capital of the canton of Zurich. It is located in central Switzerland at the northwestern tip of Lake Zurich...
, Paris
Paris
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...
, Frankfurt
Frankfurt
Frankfurt am Main , commonly known simply as Frankfurt, is the largest city in the German state of Hesse and the fifth-largest city in Germany, with a 2010 population of 688,249. The urban area had an estimated population of 2,300,000 in 2010...
, Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...
and Bahrain
Bahrain
' , officially the Kingdom of Bahrain , is a small island state near the western shores of the Persian Gulf. It is ruled by the Al Khalifa royal family. The population in 2010 stood at 1,214,705, including 235,108 non-nationals. Formerly an emirate, Bahrain was declared a kingdom in 2002.Bahrain is...
.
They sell products in personal banking, corporate and investment banking
Investment banking
An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities...
(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 Jerusalem.In August 2006, and during the royal visit by His Majesty King Abdullah II, Arab Bank donated 2 Million Jordanian Dinar
Jordanian dinar
The dinar is the currency of Jordan. The dinar is divided into 10 dirham, 100 qirsh or 1000 fils....
(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
Hurricane Katrina
Hurricane Katrina of the 2005 Atlantic hurricane season was a powerful Atlantic hurricane. It is the costliest natural disaster, as well as one of the five deadliest hurricanes, in the history of the United States. Among recorded Atlantic hurricanes, it was the sixth strongest overall...
in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
was rapid and determined, contributing with a symbolic amount of USD 100,000 to the American Red Cross 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
Amman Stock Exchange
Amman Stock Exchange is a stock exchange private institution in Jordan. It is named "Amman" after the country's capital city, Amman.-History:...
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.
External links
- Official site (Adobe FlashAdobe FlashAdobe Flash is a multimedia platform used to add animation, video, and interactivity to web pages. Flash is frequently used for advertisements, games and flash animations for broadcast...
) - Arab Bank Jordan
- Europe Arab Bank