Guardian: Jordanian banks resilient but face harsher times

By Suleiman al-Khalidi

AMMAN, June 17 (Reuters) - Jordanian banks enjoy sound financials that have allowed them to escape the worst of the global financial crisis, but property market downturns threaten to dent their bottom line, bankers and investment analysts said.

The country's 23 commercial banks, which hold 19 billion dinars ($26.8 bln) in deposits, have had minimal exposure to Western markets, and a strong supervisory system run by an independent central bank has limited their currency, property and stockmarket exposure.
"Jordan's banks were not directly affected in their investment portfolio from the crisis and a regulatory framework has been effective in encouraging and promoting risk management," said former central bank governor and finance minister Ziyad Fariz.

But the banks' bottom line and average profitability this year will be hurt as a result of the weakening of the Jordanian economy, hurt by the slowdown in the Gulf Arab states, a main source of remittances and foreign direct investment. (more)