February 15, 2015: Bank of Palestine (BOP), the leading Palestinian bank, reported its preliminary and unaudited financial results for 2014. 

Results Highlights  

·         Net profit of USD 40.22 million for the year 2014

·         Operating Income of USD 120 million, up by 6.74%, compared with 113 million in 2013

·         Total assets up 3.27% at USD 2.43 billion compared with USD 2.35 billion at the end of 2013

·         Loans at USD 1.15 billion, up 4.37% compared to USD 1.1 billion at the previous year-end

·         Customer deposits at USD 2.06  billion, up 18.16% from USD 1.75 billion at the end of 2013

·         Total shareholders' equity reached USD 280 million, an increase of 11.15%, compared with USD 252 million in 2013

·         The NPL ratio remained low at only 2.22%

Financial Results

Bank of Palestine (BOP), the largest Palestinian bank, reported an operating income of USD 120,288,657 in 2014, compared with 112,693,775 for the same period in 2013, an increase of 6.74%. The bank’s net profit reached USD 40,222,506, slightly decreasing by 0.53% compared with 2013. The Palestine Monetary Authority’s newly established deposit insurance scheme accounted for around USD 4,759,102 of the bank’s operational expenses. Launched in 2014, the scheme aims at safeguarding small depositors as well as maintaining the stability of the banking system in an effort to mobilize more savings, thus enabling banks to play a better role in economic growth. Bank of Palestine’s customer deposits reached USD 2,062,524,075  at the end of 2014, an increase of 18.16% compared with end of 2013. This high increase can be attributed to the increased trust the scheme provided depositors, in addition to the bank’s extensive outreach and widespread branch network.

As at the end of 2014, Bank of Palestine's total assets increased by 3.27%, to reach USD 2,424,773,961; maintaining the top rank as the largest Palestinian company in terms of financial assets. Total shareholders' equity reached USD 280,106,578, an increase of 11.15% compared with 2013, and paid-up capital also increased by 6.67% to reach USD 160,000,000. The loans’ portfolio reached USD 1,151,825,644 compared with USD 1,103,641,018 at the end of 2013, an increase of 4.37%, and Non-Performing Loans remained low at 2.22%.

The bank’s financial results indicate that BOP has a well-diversified investment portfolio, high credit quality, good liquidity, as well as strong and robust ratios; the Loan to Deposit ratio is 55.85% indicating the bank’s ability to further lending, the Liquid Assets Ratio is 40%, and the Capital Adequacy Ratio is 13.09%.

Commenting on the bank’s performance, Hashim Shawa – Chairman and General Manager of Bank of Palestine said: “I am pleased to report that Bank of Palestine has continued achieving sustainable profitable growth. 2014 was one of the most challenging years in Palestine in the last decade, starting with the unstable political and economic environment, followed by the devastating war on the Gaza Strip, which lasted over 50 days. Our business continuity plans and our perseverance were put to the test once again, and Bank of Palestine proved to be resilient despite the difficulties and challenges. ”

Branches and Electronic Banking Channels

The bank continued its commitment to provide wider access to finance and transacting services. Bank of Palestine continues to be Palestine's leading bank in terms of banking network, with 54 branches making up around a quarter of all bank branches in Palestine. In 2014, six new sub-branches were opened; in the village of Bedya in the Salfit  governorate, in Assira in the Nablus governorate, in Beddo in the Jerusalem governorate, in Bani Shuheila in Khan Younes, in Tal Al-Hawa in the center of the Gaza Strip, and in Beit Lahya in the North of the Gaza Strip.  The bank has plans to open several new branches in 2015, along with representative offices in Dubai, UAE and in Santiago, Chile.

In 2014, Bank of Palestine introduced kiosk machines that allow clients to conduct their banking transactions electronically, in addition to ATM machines in all the main branches that accept cash and check deposits. Moreover, in line with the bank’s environmental policies, Bank of Palestine installed solar energy systems to operate its ATMs in different locations. These systems ensure that they continue to operate during a crisis where there are electricity or fuel shortages. As for electronic services, the bank added electronic bill payment services to its online banking platform, where clients can pay their different utility bills and top up their mobile phones online. In 2015, the bank will be introducing the e-commerce service to allow merchants to accept online payments when they sell their products and services on their websites.

Our branches, Point of Sale Merchant Terminals (POS) and ATM networks, and electronic services have made access to banking for clients possible and easy wherever they are located, allowing BOP to maintain and grow its customer base.

Products, Services, and Initiatives

As part of the bank’s strategy to provide access to finance to all segments of society, BOP continued working on re-structuring and designing a programme for the micro, small, and medium enterprises (MSME) segment, as it makes up 90% of the Palestinian economy.  Similarly the bank is working to target another untapped and under-banked segment, by developing a full banking programme for women in order to meet their needs through banking and non-financial advisory services. In this regard, Bank of Palestine became a member of the Global Banking Alliance for Women (GBA), and a signatory of the Women's Empowerment Principles (WEPs), a joint initiative of UN Global Compact and UN Women to empower women in the workplace, marketplace and community. 

As a customer-driven organization, Bank of Palestine continued to develop its products, services, and campaigns to meet various client needs and to increase banking awareness. These include the introduction of priority pass for the bank’s credit card holder, additional treasury services, a savings campaign, and a campaign for clients and POS merchants to encourage card transactions.

Dividends
The bank’s 2014 preliminary results have been submitted to the Palestine Monetary Authority (PMA), upon approval, the bank’s Board of Directors will issue a recommendation to shareholders regarding the dividend distribution.

In 2014, the bank distributed USD 22,500,000 from realized profits in 2013 to shareholders; USD 10 million as stock dividends - raising the bank’s paid-up capital to USD 160 million - and USD 12,500,000 as cash dividends.

Risk Management

BOP has continued implementing its risk management strategy by enhancing the governance structure through having an active Risk committee and a Risk management function, strengthening its internal controls, spreading risk culture, developing and applying advanced internal rating models for its credit portfolio, and upgrading systems for Basel II implementation. The Palestine Monetary Authority plans to introduce Basel II instructions to banks operating in Palestine by the end of 2015. Moreover the bank is enhancing its information security policies and procedures to be compliant with ISO 27001/2 information security standards.

Subsidiary Companies

The contribution to the bank’s profit from its subsidiary companies increased in 2014 compared with previous years. 

The bank’s subsidiary PalPay® – Palestine Payments – was very active and successful during 2014. The number of electronic transactions conducted during the year through PalPay® reached 9.9 million, an increase of 26% compared with last year. The company also continued to sign agreements with additional utility companies in Palestine to allow their clients to make e-payments through the PalPay® system. In 2014, PalPay® designed a bespoke system for the UN’s World Food Program (WFP) to provide them with an innovative e-voucher solution that will enable them to seamlessly provide their stakeholders with the necessary assistance. The company also promoted its services regionally, as it was one of the main sponsors of the Cards and Payments Middle East 2014 conference that took place in Dubai. 

Al-Wasata Securities, which has been the fastest growing brokerage company in Palestine has been playing a major role in the acquisition of new investors in the Palestinian market.  The company ranked number one (out of eight brokerage companies) in Palestine with respect to attracting new investors. It now has a 26% market share in terms of number of investors, USD 378 million trading volume in local regional markets, and more than USD 400 million worth of shares under management. In 2014, Al-Wasata won the EMEA Finance and the Global Investor ISF awards for Best Broker in Palestine.

Awards & Recognition

In 2014 Bank of Palestine was recognized by several prestigious institutions as the “Best Bank in Palestine”.  These institutions include: Euromoney, Global Finance, The Banker, EMEA Finance, Banker Middle East, and the Middle East Investor Relations Society.  The bank also receivedthe award for Best CSR Program in the Middle East by EMEA Finance.

Business and Regulatory Environment in Palestine

In 2014 the Palestine Stock Exchange (PEX) joined the watch list of the Financial Times (FTSE) for possible inclusion in their frontier market indices, to join MSCI and S&P Dow Jones, who made a similar move in 2013.

In 2014, the State of Palestine, through the Palestine Capital Markets Authority (PCMA), was admitted as a new signatory to the Multilateral Memorandum of Understanding (MMoU) of the International Organization of Securities Commissions (IOSCO). The importance of the IOSCO membership arises from serving as an international endorsement that PCMA regulates and monitors the Palestinian securities sector in accordance with the IOSCO international standards and principles, which are the global benchmark for the best practices in this field.

Moreover, in 2014, the Deposit Insurance Scheme was launched by the Palestine Monetary Authority (PMA), with the aims to safeguard small depositors, maintain the stability of the banking system, and thus mobilize more savings that would enable banks to play a bigger role in the economy.

2014 Preliminary Financial Results

For more information on the 2014 preliminary financial results, please visit the links below:

English Financial Results

Arabic Financial Results

2014: A Year in Review

A small booklet with information about Bank of Palestine’s work and achievements in 2014 – Click on the photo below:

About Bank of Palestine (BOP)

Bank of Palestine has a long embedded presence and experience in Palestine dating back to 1960.  The bank is now the largest Palestinian bank with the most widespread branch network in Palestine, a paid up capital of $160 million, and assets of over USD 2.42 billion, with 1,280 employees serving around 700,000 customers.  Operating as a universal bank, BOP is engaged in retail, corporate, micro and SME, and Diaspora banking operations, with the largest card processing operations in Palestine; BOP is the sole agent for issuing and acquiring Visa and MasterCard in Palestine with over 5,500 Point of Sale merchant terminals nationwide.  BOP also plays a leading role in the large project finance loan syndications in Palestine. Bank of Palestine adopts a holistic sustainability strategy and has been the leader in Corporate Social Responsibility (CSR) in Palestine dedicating 5% of its net profit to community development.

Bank of Palestine’s stock (PEX: BOP) has been listed on the Palestine Exchange (PEX) since 2005. It is among the market’s blue chip stocks, and represents more than 14% of total PEX market capitalization.