Jordan Times
Friday, September 3, 2004
Central Bank returns to
profitability on windfall earnings from investment abroad
By Samir Ghawi
AMMAN — A 64.9 per cent increase in earnings from investments abroad turned a
JD11.39 million loss posted by the Central Bank of Jordan (CBJ) in 2002 into a
JD31.67 million profit at the end of last year.
Upon taking into consideration JD50.66 million in profits from evaluating the
CBJ assets and liabilities of gold and foreign exchange, the bank's financial
statement as of Dec. 31, 2003 shows that its net profit in accordance with
international standards for financial reports becomes JD82.33 million.
At the end of December 2002, JD25.44 million in gains from the evaluation of
gold and foreign exchange absorbed the aforementioned JD11.39 million loss,
reported in accordance with the CBJ law, and took the net profit as per
international standards to JD14.04 million.
According to the CBJ's annual report, received this week, investments abroad
yielded JD130.99 million in returns last year compared to JD79.41 million earned
in 2002.
Yields from local investments and other various earnings were lower at JD9.42
million, down 29.75 per cent from the JD13.41 million recorded on Dec. 31, 2002.
Earnings from both categories brought up the total by 51.28 per cent, from
JD92.82 million in 2002 to JD140.42 million at the end of last year.
Notes attached to the financial statement revealed that trading in foreign
exchange generated JD43.23 million in profits last year whereas the interests
earned from foreign bonds amounted to JD29.89 million.
In 2002, the profits from foreign exchange trading and the interests from bonds
amounted to JD2.10 million and JD17.37 million respectively. As such, the rise
shown last year translates into 1,958.6 per cent and 72.1 per cent.
Although the interest earned on the deposits at corresponding banks abroad
declined to JD24.87 million from JD29.72 million, the Central Bank managed to
raise its profits from maturning foreign bonds and treasury bills in foreign
currencies as well as the margin trading in international moneys.
According to the CBJ's balance sheet as of Dec. 31, 2003, cash and deposits in
foreign currencies at banks abroad totalled JD2,081.63 million compared to
JD1,638.19 million at the end of 2002. These funds which had different
maturities, with maximum of six months, carried interests ranging between one
per cent and 3.9 per cent based on the currency.
Foreign securities totalled JD1,601.12 million compared to JD1,180.73 million in
2002. Of these amounts, US treasury bills amounted to JD519.17 million and
JD771.04 million respectively.
Gold assets were valued at JD121.47 million.
The CBJ income statement detailed JD108.75 million of expenditures last year
compared to JD104.22 million in 2002. Interest paid on certificates and deposits
at the licensed banks' “window” amounted to JD59.07 million, accounting for 54.3
per cent of the total expenditures in 2003, and down from JD70.60 million or
67.7 per cent of the total in 2002.
Administrative and general expenses as well as other interests, commissions and
expenses followed at JD15.65 million and JD14.05 million respectively. In 2002,
the two categories amounted to JD15.27 million and JD3.93 million.
Of the JD31.67 net profit generated last year (as per the CBJ law), JD25.33
million were transferred to the treasury account and JD6.33 million,
representing 20 per cent of the profit, were transferred to the general reserve.