RAMALLAH, Wednesday, July 29, 2020 (WAFA) – The Ramallah-based National Bank announced today the completion of the acquisition of the assets and obligations of the Palestine branch of the Jordan Commercial Bank.
Under the acquisition deal, the National Bank will acquire the assets and obligations of the Jordan Commercial Bank in Palestine in return for the Commercial Bank getting a 15% stake in the National Bank and one seat on its board of directors. The value of the transaction will be covered by the National Bank's public offering of 13.76 million shares for the benefit of the Commercial Bank, bringing the bank's paid-up capital to $92 million.
This was announced during a press conference held at the headquarters of the National Bank in Ramallah attended by Minister of National Economy Khaled Ossaily, Governor of the Palestinian Monetary Authority (PMA), Azzam al Shawa, Chairman of the Board of Directors of the National Bank, Talal Nasser al-Din, and the Chairman of the Board of Directors of the Jordan Commercial Bank, Michel Sayegh, via a video conference from Amman.
"The strategic partnership between the two banks is aimed at advancing the national economy and will create stronger and more solid banking entities while enhancing the national economy in the current COVID-19 pandemic by supporting small and medium-sized enterprises and encouraging young people and women to produce and contribute actively to building our national economy," said Ossaily.
Shawa explained that the PMA is constantly working to enhance the financial base of the Palestinian banking system in order to ensure the security of depositors' funds and the rights of banks' customers.
He said the acquisition comes in the context of creating strong, competitive and innovative banking entities that keep pace with the latest global developments in the banking sector, explaining that the acquisition will not affect the total assets and liabilities of the banking system, pointing out that it amounted to $17.2 billion, distributed over 13 licensed banks.
Nasser al-Din said his National Bank is the second largest bank in Palestine, and with the completion of the acquisition of the Commercial Bank of Jordan its capital adequacy will exceed 15%, which will give the bank additional strength to absorb crises and face any potential risks.
"Today we are talking about assets worth $2.7 billion, clients' deposits of $1.93 billion and a credit facility portfolio of $1.6 billion," he said.
"In addition to the positive impact of the deal on strengthening the bank's competitive position and financial performance, the National Bank's branches will increase by seven, bringing the bank's total number of branches and offices across the country to 35," said Nasser al-Din.
He said that the National Bank is now number one in acquisitions and mergers in the Palestinian banking sector as this transaction is its fourth following the launch of the bank in 2012 following the merger of Al-Rafah Bank for Financing of Small Enterprises and the Arab Palestinian Investment Bank, the acquisition of the Union Bank of Jordan in Palestine in 2015, and leading a shareholders' coalition to acquire a controlling stake in the Palestine Islamic Bank in 2018.
With regard to the rights of customers at Jordan Commercial Bank, Nasser al-Din explained that all contracts between the customers and the bank will remain unchanged and that there will be no change in their daily dealings with the bank, adding that the employees of the Jordan Commercial Bank will also be incorporated within the staff of the National Bank.
Sayegh said that the acquisition will enhance the operation of the Jordan Commercial Bank in Palestine through a larger banking system with deeper roots, which will contribute to the diversification of the asset base and revenues.
He said he is looking forward "to actively participate on the Board of Directors of the National Bank alongside the best Palestinian businessmen."
The Commercial Bank of Jordan was launched in Jordan in 1977. After the acquisition by the National Bank of its business in Palestine, the number of banks in the Palestinian banking system has been reduced to 13, including six Palestinian banks and seven from outside.