Bank of Palestine General Assembly approves distribution of $28 m in dividends for the year 2015
Ramallah, Palestine (March 25th, 2016): The General Assembly for Bank of Palestine approved distribution of $28 million in dividends for the bank’s profits in 2015, a percentage of 16% of the bank’s paid up capital.
The approval was for the distribution of $28,000,000 from realized profits to shareholders in proportion to each shareholder’s ownership in paid up capital as of March 24, 2015 as follows:
- $10 million as stock dividends, equivalent to 5.71% of the nominal value of the share; raising the bank’s paid up capital to USD 185,000,000
- $18 million as cash dividends, equivalent to 10.29% of the nominal value of the share.
The General Assembly; after bank secured regulatory approvals; also approved two strategic banking acquisition deals. The first deal is a merger deal whereby the Palestine Commercial Bank (PCB); a local commercial bank; will be merged with the Bank of Palestine in a share swap of 3:1 in favor of the BoP share. This merger will increase the paid up capital of BoP by $10m and will allow its market share to become dominant across all operational indicators. This will not only put the bank at the helm in branch network; but more importantly provides capital adequacy of the additional USD 10 million in paid capital, and USD 20 million from the original capital base of BCP will be geared as share premium thus enhancing shareholder value. This appreciation in the capital base for BOP is strategically in line with the Systematically important classification of BoP by the regulators in the market place.
Hashim Shawa, Chairman and General Manager of Bank of Palestine commented on the merger deal: “We thank our General Assembly and shareholders for their confidence in the bank’s management and strategic direction for future growth while committing to continue to grow the bank’s core operations in Palestine. This merger is a proof point that we have a positive outlook on the future of banking in Palestine and confidence in the local investment environment. This deal allows the bank to consolidate a partnership with another “compatible in values” bank that is seen as an enhancement to our commercial product offering. This merger allows consolidating of our operating strengths across the board; in branch foot print, via utilization of existing branch licenses for PCB in key geographic locations; in additional customer base; in acquisition of PCB loan portfolio through adding it to BOP’s portfolio, in addition to shareholder base expansion with the advent of PCB shareholders as investors.”
The second deal approved was the acquisition of an additional 31% stake in the Arab Islamic Bank (AIB). This share acquisition allows Bank of Palestine to become overnight a majority shareholder in an Islamic Banking operation in Palestine, holding 51.98% of AIB shares. Although AIB will remain an independent subsidiary managed as a Sharia’ Compliant operation, however, this determining block will allow BOP to provide Islamic Banking solutions to a growing segment of the population that require such services among customer segments in Palestine. BoP management has realized the importance of this service line since market share for Islamic banking in Palestine is only 11% while the actual market potential could be up to 25%, a clear opportunity for involvement in Islamic Banking domain. The bank has been an investor in AIB for the last number of years and as such watched growth in demand for Islamic banking services, and grew more confident of AIB’s operational fundamentals. This share acquisition is an optimal entry strategy versus the establishment of a new Islamic Banking operation.
Commenting on this additional share acquisition, Mr. Shawa added: “We are now able to claim that Bank of Palestine is a “Full Spectrum” Bank by providing Corporate, SMEs, Retail and now Islamic banking products through its subsidiary. The market coverage of Islamic banking in Palestine is only at 11% so the growth is very promising. This will be done as a way to complement BOP’s strength in traditional banking services. We are committed to continue to offer value and diversification to our customers and our shareholders while adhering to highest standards of compliance, risk management, financial inclusion to women, SMEs and sustainability practices.”
The General Assembly approved changing the objectives of the bank by adding the ability for the bank to provide custodian services for international institutional investors in the Palestine Exchange.
About the Bank of Palestine
Bank of Palestine remains the country’s largest bank with a branch network of 57 branches and with more than 1,504 employees serving more than 750,000 customers. The Bank’s trading shares were listed in the Palestinian Exchange in 2005; becoming the second largest company listed by its market value; with 15% market capitalization. The bank’s subsidiaries include PalPay® – Palestine Payments - with the mission of facilitating electronic payments through a large network of more than 5,500 Points of Sale distributed throughout the country in shops, supermarkets, restaurants, and hotels.
Al-Wasata Securities is another subsidiary, operating as the bank’s investment arm. Al-Wasata continues to be recognized for being the most active brokerage firm on the Palestine Exchange. It now has a 29% market share in terms of number of investors, USD 372 million trading volume in local regional markets, and more than USD 470 million worth of shares under management. In 2015, Al-Wasata won EMEA Finance award for Best Broker in Palestine for three consecutive years.
For more information contact:
Kamel Husseini; Head of Department
International and Investors Affairs
Tel: +970 2 2946700 | Ext: 9114 | Fax: +970 2 2964703 Mobile: +970 599 205630| Email: [email protected]|www.bankofpalestine.com