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| Capital Bank of Jordan |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 25928 |
| Company name | Capital Bank of Jordan |
| Country | Jordan |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Active |
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| Date SPI disclosed | June 7, 2007 |
| Projected board date | July 12, 2007 |
| Previous Events | Invested: January 2, 2008
Signed: September 4, 2007
Approved: July 12, 2007 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
Capital Bank (CAP or Bank) is a full service, private sector Jordanian commercial bank, headquartered in Amman. It was established in 1995 as the Export and Finance Bank, and was renamed to Capital Bank in 2006. As of December 31, 2006, CAP’s total asset base was approximately $1208 million equivalent, shareholder’s equity was $221.4 million equivalent and net income was $25.5 million equivalent. The Bank provides a wide array of corporate and investment banking services to corporate and consumer clients and is a leader in trade finance.
The project is aimed to:
- support the Bank’s growing mortgage portfolio;
- help manage the asset/liability mismatch;
- strengthen and diversify the capital base; and
- allow the Bank to become well-positioned to meet the demands of the booming Jordanian economy, especially for infrastructure and SME finance.
In addition, IFC is expected to work with the Bank on advisory services for corporate governance, risk management and housing finance. |
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| Project sponsor and major shareholders of project company |
The Bank has a diversified institutional shareholding structure. The Jordan Social Security Corporation, which represents the country’s pension fund and is the largest Jordanian institutional investor, is the single largest shareholder. The five largest shareholders are as shown below. Approximately 40% of the Bank’s shares are freely traded on the Amman Stock Exchange.
Social Security Corporation (Nationality: Jordan) - 9.6%
Mr. Waleed El Bittar (Nationality: Jordan) – 9.1 %
Spumante Comercio International (Nationality: Portugal) – 6.7%
Mr. Ali Al Husry (Nationality: Jordan) – 6.4%
Mr. Mohammed Musaed Al Seif (Nationality: Saudi Arabia) – 6.0%
Total – 37.8% |
| Total project cost and amount and nature of IFC's investment |
| The project comprises an IFC investment of up to $50 million, consisting of an equity investment of up to 9% in the Bank’s common share capital, and a long term loan of up to $20 million. |
| Location of project and description of site |
| The Bank is headquartered in Amman and has a network of seven branches in Jordan. |
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| Anticipated development impact of the project |
| The project will assist CAP to expand its business, thus providing greater access to financing for corporations, SMEs and individuals, essential to achieve development and higher standards of living. It will also support the Bank’s expansion plans in housing finance. |
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| IFC's expected development contribution |
| IFC is expected to provide long-term funding which is not available through alternative sources. In addition, the Bank is expected to work with IFC’s advisory services for product development in housing finance and SME banking. IFC is also expected to provide advisory services for strengthening its corporate governance and risk management procedures. |
| Environmental and social issues - Category FI |
This project has provisionally been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. During appraisal, IFC will analyze the FI portfolio, for types of transactions, size, tenor and industry sectors and determine the Applicable Performance Requirements, if any, that would include a combination of:
- The IFC FI Exclusion List; and/or
- The applicable National Social and Environmental Laws and regulations; and/or
- The IFC Performance Standards.
IFC will also review, if required, the capacity of the FI to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS.
Based on the review, the project will be required to:
- Develop an, or upgrade, if necessary, any existing Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS, to ensure that its investments/activities are in compliance with the Applicable; - Performance Requirements;
- Submit a periodic report to IFC as per a format to be provided by IFC. |
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| For inquiries about the project, contact: |
Haytham Kamhiyah, General Manager
Capital Bank of Jordan
P.O. Box 941283
Amman 11194
Jordan
Telephone: +96-265 100 200 ext: 300
Fax: +96-265 692 062
Website: http://www.efbank.com.jo |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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