Financial Performance for Arab Bank using DuPont Analysis 2000-2021
ABEER AL-KHOURY1, HOSSAM HADDAD2,3, ATEF AL-BAWAB, MOHAMMED OTHMAN2,
AYMAN KHAZALEH2
1Faculty of Business, Accounting Department, Al-Ahliyya Amman University, JORDAN
2Middle East University, Faculty of Business, Accounting Department, Amman, JORDAN
3Zarqa University, Faculty of Business, Accounting Department, Zarqa, JORDAN
Abstract:- In today's business environment, financial analysis is considered one of the most reliable tools to
judge performance, especially in the banking sector. The present study investigates the financial performance of
one of the most famous and highest profitable banks in Jordan, the Arab Bank. It examines the Arab Bank's
financial performance from 2000 to 2019 by adopting the DuPont system of financial analysis of return on
equity (ROE) model. This method relies on three main elements, which are net profit margin (NPM), total assets
turnover (TAT), and equity multiplier (EM).
The main scope of this study is to analyze the profitability and efficiency of the Cooperative for one of the
Jordanian banks. Dupont Analysis provides an indicator of the stockholders' wealth using the ROE index.
Secondary data was used by accessing the official website of the Arab Bank and obtaining the financial
information by analyzing the annual reports. The study finds that the Arab Bank has maintained stability over
two decades with slight fluctuations in the ROE despite the international financial crises. On the other hand,
NPM and TAT have witnessed relative strength from 2000 to 2019. Furthermore, EM indicates constant
indicators for the period of 2000-2005 while the ratios from 2006 -2019 have diminished, which means the
financial leverage of the Arab Bank lately was less dependent on the debts to finance the assets.
Key-words: -DuPont, Return on Equity, Net profit margin, Equity multiplier, Asset utilization.
Received: October 16, 2021. Revised: July 28, 2022. Accepted: August 20, 2022. Published: September 8, 2022.
1 Introduction
In the business environment, the banks are looking
to improve their performances with
higcompetitiveness to create a comparative
advantage and added value for the shareholders and
maximize the profit. In this resphect, Arab Bank
has been superior in the Jordanian banking context
based on the result of this study (2000- 2021) that
the generalization can be reliable and more accurate.
In addition, it will be a model for further studies in
Jordan and other countries to compare the better
performances. Thus, There are several ways to
evaluate the performance and various models to
express the efficiency and effectiveness of the
business. The banking industry is considered the
cornerstone of the economies by contributing to the
Gross Domestic Product (GDP), reflecting the extent
of healthy financial stability. Banking, money, and
value are meaningful terms for shareholders and
investors who are constantly seeking to analyze their
financial feasibility and the benefit of their
investments by examining the financial performance
of the Bank and conducting comparative studies
with the competitors. At the beginning of the last
century, the DuPont model was designed to assess
profitability, and it is still valid to use today. The
economic environment circumstances and the lack
of knowledge of professional financial practice
cause a failure of businesses [16]. The ongoing
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DOI: 10.37394/23207.2022.19.137
Abeer Al-Khoury, Hossam Haddad,
Atef Al-Bawab, Mohammed Othman, Ayman Khazaleh
E-ISSN: 2224-2899
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concern on the principle of the entities and their
familiarity has been debated by [11] that found that
financial and internal control weakness drive
devastating consequences for the entities long run.
Therefore, companies have to pay attention to financial
[15] has encouraged boosting the ways to improve the
rules inside the business. Most entities have published
their financial statements to help the decision-makers
take the investment opportunity [6]. When F.
Donaldson Brown was employed as a financial manager
at General Motors, Brown requested to organize the
finance department; a brilliant model has created,
DuPont Model and has been an instrumental path for
financial analysis. F. Donaldson Brown is an engineer
employed as a financial manager at DuPont; Brown had
requested to organize the finance department in 1918
when a brilliant model was created, which is DuPont
Model, and has been an instrumental path for financial
analysis. Dupont's model depends on the financial ratios
by computing two ratios, the net profit margin and the
total turnover assets equal the return on assets. The
profitability and efficiency measurements have affected
the ROA, allowing DuPont to be the commonly used
instrument for financial analysis [9]. The managers aim
to maximise added value for the organization and
shareholders, which determines the decisions made
in investing and finance [14]. In private industry,
there are many ways to calculate all aspects of
company productivity. Due to DuPont's
organizational structure, the DuPont model remained
applicable for profitability assessment.
The research aims to examine the Jordanian Arab
Bank's performance progress. Banks are measured
by their financial statements' overall financial
characteristics and economic indicators. Such targets
will calculate the return on assets, net operating
profits, and total business earnings. The profit
margins show us how well the organization handles
its costs. Suppose an organization's net profit margin
is high. In that case, they are more effective at
turning revenue into real profits—the paper analyses
how Arab Bank has used its assets in the same era.
The funds ratio indicates how much a company uses
per dollar it possesses. This ratio reflects how well a
company has accomplished its goals. The equity
multiplier analysis calculates a company's financial
leverage and the abnormal volume of debt used to
finance acquisitions. As an economic indicator of
force, dollar leveraging is related to variability. A
Financial Position may be done on a company, and
the shareholder's actual interest splits the net assets.
The essential profitability indicator is the revenue
generated from investment money (ROE). It is
symbolic of the viability of a company. It is assumed
that a stock that can collect cash would have a better
return rate. The greater the return on a company's
markets, the more excellent the opportunity for
profit is. Such targets will calculate the return on
cash, net operating profits, and total business
earnings. The profit margins show us how well the
organization handles its costs. Suppose an
organization's net profit margin is high. In that case,
they are more effective at turning revenue into real
profits—the paper analyses how Arab Bank has used
its assets in the same era. The ratio of assets' use is
of considerable significance in evaluating the
productivity of school administration.
The paper is structured as follows: the first
section discusses the study's significance and aims.
In contrast, the second section includes the relevant
literature review is disused the third section gives an
overview of the Arab bank system. Section Four
discusses the improved approach for DuPont
financial ratio analysis and empirical results of
banking system performance. In Section 4, the
conclusion of the work is presented.
2 Literature Review
[18] have a revamped DuPont model to characterize
the organization. The utilization of operating income
as a criterion for assessing managers relies on a
corporation's properties that limit a leader's ability to
execute those functions. [5] DuPont multiplication
components in specific industries have a more
generous assessment than regular ratios, suggesting
increased validity to particular industries. Banks are
a particular area of study due to their work and
performance. Problems arise in managing the
investments made by the banks, depositors,
consumers, and other stakeholders. Bank managers
are particularly going through a hectic atmosphere
due to regulations. To mitigate risk, management is
encouraged to achieve outcomes that are not
following the aspirations of shareholders [19].
[21] have identified three corporate governance
issues specific to banks. [13] address another
recurring trend that combines the effect of the
financial incentives of bank managers on their
actions. [10] explore the differences within
governance structures based on various service
sectors' existence. Besides that, the complete volume
of a company's organizational structure is defined by
multiple factors, which all can also affect success
assessment objectives and methods: the existence
and distribution of a firm's assets and liabilities
(leverage, the share of capital assets, market risk,
cash- flow attitudes. firm size, and sector). Return
rates are acceptable to use in economic and
quantitative calculations. We accept that the
emphasis on profitability indicators for bank
appraisal is minimal. Regarding ROA, ROE, and the
interest margin (and expenses without interest), all
other operating ratios should be considered s" [20]).
The revised model demonstrated how various
income statements and Financial Position elements
are related and how those elements affect a firm's
ROE. [7].
2.1 The Arab Bank
Arab Bank offers commercial banking services in
the Middle East. Founded in 1930 as a small bank,
this organization has developed to include some 500
branches and over 30 separate countries on five
continents. Since its establishment in Jerusalem as
Arab Bank Limited on May 21, 1930, Arab Bank's
growth and expansion continued. On Jan 31, 1990,
the name Arab Bank changed to Arab Bank plc
because it was listed under the Amman Stock
Exchange. The Bank continuously strengthens its
disclosures and presents a higher degree of openness
in its accounting statements, helping investors and
consumers understand its enormous earnings
strength, low-risk level, and substantial economic
role (Annual Report Arab Bank, 2019).
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Abeer Al-Khoury, Hossam Haddad,
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3 METHODOLOGY
3.1 Analysis Model
The efficiency model is based on net profit margin,
gross asset turnover, and the equity multiplier. The
income statement determines the profit margin and
the efficiency of the income statement's various
aspects—an inventory-based estimate of the
financial position left-hand side: assets. The
leveraged property valuation helps a lender
determine the financial Position left-hand side: loans
and owners' Equity.
Return on Equity allows financial institutions to plan
and analyse their results [12]. The forecast indicates
the investigation reveals a predicted profit margin
[8]. In essence, net profits reflect a company's sales
minus expenditures. With this information, the
financial manager will correctly predict the expected
sales revenue to meet each net income goal. The
gross asset turnover ratio means the organisation's
number of assets supports the expected sales level.
The overall asset requirement is used to project all
asset accounts to the pro forma level [4]. The
financial calculation is the cash balance from assets
minus liabilities plus Equity. Thus, the equity
multiplier ratio will project a small bank's financial
demands and composition. Return on assets and
equity multiplier are two main factors of return on
Equity. At the same time, the net profit margin and
total assets turnover are the critical components of
return on assets.
Return on Equity = (Return on Assets) Multiply
(Equity Multiplier)
Return on Assets= (Net Profit Margin) Multiply
(Total Assets Turnover)
As shown in Figure 1, the net income has been used
to extract the total Equity by dividing it by the total
equity capital. On the other hand, net income has
also been used in the return on assets ratio by
dividing it by the average total assets. The total
assets and equity capital ratio is called the total
equity multiplier. Where,
Return on Equity = (Net Income) Divided (Total
Equity Capital)
Return on Assets = (Net Income) Divided (Total
Assets)
Equity Multiplier = (Total Assets) Divided (Total
Equity Capital)
Fig. 1: The DuPont Model Analysis
Source: [2],[3],[1]
The net profit margin can be broken down into
revenue and cost. Interest and non-interest profits
were divided into two components. The net profit
margin ratio will clarify the business's income
statement. The total asset turnover ratio shows us
how successful the company has been. The equity
multiplier ratio can measure the founding Equity of
a company. Applying the DuPont method of
financial analysis to a bank illustrates how it can
operate. The DuPont method of economic analysis
offers quality management of a firm's preparation
process and support during the audit.
4 Analysis andResults
4.1 Financial Position Items
Arab Bank has numerous sources of assets: firstly:
Cash, secondly: loans of the customer, third:
Return on
Equity
Return on
Assets
Profit Margin
Sales Net Income
Total
Costs
Cost of Sales
Operating
Costs
Depreciation
Intrest
Tax
Sales
Total Assets
Turnover
Total
Assets
Fixed
Assets
Current
Assets
Cash and Marketable
Security
Account
Receivable
inventory
Sales
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deposits, and fourth: fixed other assets. Table 1 Cash
swing from JOD (1,406,023) since 2000 to a peak of
JOD (4,709,940) in 2015 and back to JOD
(3,752,594) with an average (3,083,396.5) the
average is (Note: The exchange rate 1 Dollar to
Jordanian dinar is equal:0.721 while the 1 JOD is
equal to 1.43 US dollar). The account of customer
loans has increased from JOD (3,336,626) in 2000
to JOD (3,264,458) in 2019, while the average was
(3,369,377). Securities and Deposits expanded from
JOD (8,673,176) in 2000 to JOD (18,523,023) in
2019 with an average JOD (14,303,422.3). Fixed
and other assets have grown from a JOD
(429,279)0.43 in 2000 to JOD (788,610) in 2019 and
JOD (524,421.25) on average in the COVID-19
period (2020-2021). The table shows an increase in
cash in 2020 to (4833256). It continues to increase
to reach (5685990) with an average
(3281234.2)while the customer loans were in
2020(3498702) and decreased in 2020 to (2641667)
and average (3342177.7), securities and deposits
approximately remained as they were in 2020 they
were (18251055) and decreased a bit in 2021
(18708241) with an average (14683079) finally
fixed. Other assets were in 2020 (606080) and
decreased to (579581) in 2021, so the average will
be (530458.45). The Arab Bank has three large
accounts with liabilities Corporate and retail
deposits, other liabilities, and shareholders fund.
Raised corporate and retail deposits from JOD
(12,342,462) in 2000 to JOD (21,669,386) in 2019,
with an average of JOD (17,656,599.35). Other
liabilities have increased from JOD (1,055,480) in
2000 up to JOD (864,057) with an average
(654,708.2). Shareholder fund started from (447,162)
in 2000. It increased to JOD (3.795,242) in 2019 and
an average of (2,962,667.2),i 2021 deposits have
been raised to (23046472) with an
average( 18123566), other liabilities was decreased
to (7252987) and average (665621.73) while
shareholder funds were decreased to (3816020).
With average (3041906) due to the pandemic.
4.2 Income Statement Items
Arab Bank has three main income sources – interest
income, non-interest income and gains, and net
income. Regarding the interest income, Table 1
shows fluctuation JOD (894,257) in the year 2000
with increasing slop in 2019 JOD (1,377,051), with
an average JOD (935217.2). Net incomes from
non-interest income and gains have grown from
JOD (129,380) in 2000 to JOD (341,812) in 2019,
with an average of (259,472.8). Net income rapidly
increased from JOD (130,200) in 2000 to JOD
(423,560) in 2019, with an average JOD
(236,222.95). The Arab Bank has four types of
expenditure: interest expense, provision for bad
loans, overhead costs, and income tax. Interest
expense ranged between JOD (632,790) in 2000 and
JOD (602,140) in 2019, with a JOD (439,516.9)
average. Provision for bad loans (34,415) and JOD
(12,885) in 2019 with a JOD (72,374.95) average.
Overhead cost JOD (195,364) in 2000 and JOD
(547,618) in 2019 with a JOD (365,666) average
income tax JOD (30,868) in 2000 and JOD (132,660)
in 2019 with a JOD (79,739.45) average.
Considering COVID -19 in the last two years,
regarding the net income, table 1 indicates that the
average is increased by (10,832.1) because of the
fluctuation in 2019, decreased to (1141265) and
continued falling in 2021 to reach (967477) due to
COVID-19 effects.
4.3 Discussion of Financial Ratios
As a percentage of total assets for the Arab Bank in Table
2 with cash averages (14.16%), with a high of
(20.58%) in 2021 and a low of (10.16%) in 2000.
Customer loan averages contribute (16.87%) of total
assets, with the highest percentage (26.26%) in 2002
and the lowest (9.56%) in 2021 The net security
average was (66.47%) with a high of (72.32%) in
2018 and a low of (59.26%) in 2002. Fixed assets
average was (2.52%) with a high of (3.10%) in 2000
and a low of (1.96%) in 2015. Corporate and retail
deposits average was (83.48%) with a high of
(89.18%) in 2001 and a low of (80.64%) in 2006.
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Other liabilities average was (3.18%) with a high of
(7.62%) in 2000 and a low of (2.02%) in 2010.
Shareholder equities average was (13.33%) with a
high of (16.79%) in 2006 and a low of (3.23%) in
2000.
4.4 Dupont Analysis of Arab Bank
For the coverage study period, as shown in Figure 2:
DuPont Analysis 2000-2019, the Return on Equity
for Arab Bank averages (9.29) varies from (29.12%)
in 2000 to (12.69%) in 2001 and then (11.16%) in
2019. The overall net profit margin average was
(19.41%) with a range of (26.29) in 2013 to (12.72%)
in 2000. Total asset turnover averages have been
(5.62%) times with a degree from (7.39%) times in
2000, decreasing in 2004 with (4.40%) and get an
increase to (6.52%) times in 2019. The equity
multiplier averages (8.83%) times with a range from
(30.96%) times in 2000 to (5.97%) times in 2006,
then to (6.93%) times in 2019. Return on Equity is
explained by a rise in net profit margin and a
reduction in equity multiplier. The equity multiplier
has declined gradually from (30.96) times in 2000 to
less than (5.96%) times in 2006, then increased to
(7.35%) in 2015. The net profit margin has
fluctuated from low levels of (12.72%) in 2000 to
(26.29%) in 2013 and then to (24.46%) in 2019. The
Arab bank network, extended over over thirty
nations, was impacted by the global financial crisis.
In 2011, international and local difficulties impacted
the Jordanian economy and its ramifications.
Regardless of the global challenges and local
circumstances, the organizational culture of the Arab
Bank believes that professionalism and confidence
are a way to maintain its mission, which belongs to
decades ago. Arab Bank has played a vital role by
committing to its aims and being enabled to outshine
and succeed. Arab Bank is listed on Amman Stock
Exchange (ASE) with the acronym Arab Bank
<ARBK>.
5 Conclusion
Similarly, based on studies [17],[2],[23], this study
has investigated a financial analysis model for the
Arab Bank by using the DuPont system analysis
over the years 2000 -2019. Two decades of
performance of Arab Bank represents the all of
global and local events that affected one of the
biggest banks in Jordan. Furthermore, more, the
return on Equity consists of net profit margin (NPM),
total asset turnover (TAT) and the equity multiplier
(EM). However, the latest financial crisis harmed
most world banks, but the Arab Bank of Jordan's
results had a marginal impact.
The results shed light that the Arab Bank has
succeeded through the years despite the
circumstances which impacted Jordan's Arab Bank,
which was mild. In 2000, Arab Bank enjoyed a
dramatic rise in ROE and EPS growth instead of
prior years. The Arab Bank's financial results have
been relatively steady since 2001 until influenced by
the 2008 crisis's aftermath. After then, the net profit
margin and overall stock turnover reflect
considerable consistency. The equity multiplier
reflects nearly steady estimates from 2006 -to 2019
but declined from 2006-to 2009, indicating that the
Arab Bank is seeing a decline in its financial
leverage in these years. In other words, the Bank has
relied less on debt to finance its assets in the recent
year. Net income stood at about (25.78%) in 2018
with an average (of 19.47%), total asset turnover of
about (7.39%) and an average of (5.62%), and the
equity multiplier levelled out at about (30.96%) in
2000 with an average of (8.83%).
Regardless of the COVID -19 period, the authors
have added the years (2020-to 2021) to examine the
effect as well. But the challenge we have to consider
is two decades, so the length of the sample period
can not be summarized easily. Furthermore, there
are several studies which have handled the same
topic in different countries and have presented the
result in same format.
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Acknowledgements:
The authors are grateful to the Middle East
University, Amman, Jordan, for the financial support
granted to cover the publication fee of this article.
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(Attribution 4.0 International, CC BY 4.0)
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Table1: The Financial Statement for the Arab Bank (2000-2019)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
894257
775153
585661
499583
539934
723986
931750
1183122
1128629
916739
806546
129380
149916
149157
183509
199460
225741
194756
217951
270627
245732
307956
1023637
925069
734818
683092
739394
949727
1126506
1401073
1399256
1162471
1114502
-632790
-506754
-325469
-251086
-262550
-368730
-464662
-640236
-576012
-398367
-316031
-34415
-41511
-31435
-35848
-24853
-6746
-23202
-11341
-6620
-85499
-236768
-195364
-211735
-222765
-246878
-266723
-320103
-309371
-332778
-346816
-353942
-341928
-30868
-25869
-24949
-26745
-39844
-54056
-65994
-82062
-89668
-74624
-73674
130200
139200
130200
120200
144200
200092
263277
334656
360174
250039
145085
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
1406023
1629226
1735788
2103607
2253477
2044984
1940964
2894720
3026127
4004819
4649556
3336626
3755995
3864377
3770014
3444403
3683586
4321512
3507125
3263567
2782746
2613031
8673176
8766706
8719974
9215561
10688100
10573816
11642611
14258893
15846624
15756920
15489842
429279
396908
394014
387930
400048
513418
535051
559293
614684
555006
566979
13845104
14548835
14714153
15477112
16786028
16815804
18440138
21220031
22751002
23099491
23319408
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
12342462
12974264
12966576
13599191
14582887
14366500
14870546
17161380
18638502
18777745
19062842
1055480
398976
461551
444395
602762
589674
475644
510657
532546
520540
469971
447162
1096932
1286026
1433526
1600379
1859630
3093948
3547994
3579954
3801206
3786595
13845104
14548835
14714153
15477112
16786028
16815804
18440138
21220031
22751002
23099491
23319408
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.137
Abeer Al-Khoury, Hossam Haddad,
Atef Al-Bawab, Mohammed Othman, Ayman Khazaleh
E-ISSN: 2224-2899
1533
Volume 19, 2022
Income Statement – Income
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Average
Interest Income
847331
954607
1027810
1041502
1022375
1063885
1120039
1264383
1377051
1141265
967477
946049.32
Non-Interest Income and Gains
285155
302195
289876
319672
336663
311622
311040
417236
341812
249954
308039
261247.68
Total
1132486
1256802
1317686
1361174
1359038
1375507
1431079
1681619
1718863
1391219
1275516
1207297
Income Statement Expenses
Interest Expenses
-341428
-408676
-438103
-434549
-412596
-439220
-454857
-516082
-602140
462421
343843
436209.18
Provision for Bad Loans
-91938
-131128
-49240
-38685
-12217
-182726
-230077
-160365
-12885
424259
298291
98638.591
Overheads
-366181
-365585
-371580
-541405
-648109
-431727
-441778
-450933
-547618
435918
422840
371458.05
Income Tax
-71083
-90072
-112337
-128691
-132097
-109420
-109351
-120725
-132660
46821
54441
77093.227
Net Income
263001
261341
346426
217844
154020
212414
195016
433514
423560
218000
156101
Financial Position: Assets
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Average
Cash
3954882
3354402
4331096
3930155
4709940
3416485
3270576
3258485
3752594
4833256
5685990
3281234.2
Customer Loans
3415545
4044307
2676405
3313566
2625024
3432626
3063256
3209371
3264458
3498702
2641667
3342177.7
Securities and Deposits
16028453
15957684
16985248
18088851
18017731
16885604
17497764
18451865
18523023
18251055
18708241
14683079
Fixed and Other Assets
522763
556023
545623
537205
506467
519531
529976
625617
788610
606080
579581
530458.45
Total Assets
23921485
23912416
24538372
25869777
25859162
24254246
24361572
25545338
26328685
27189093
27615479
21836942
Financial Position: Liabilities
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Average
Deposits
19584371
19535880
20003301
21229540
21056474
19866162
19797456
21046522
21669386
22539997
23046472
18123566
Other Liabilities
523590
497025
579657
589364
1248547
887329
1014207
828192
864057
796527
752987
665621.73
Shareholder Funds
3813524
3875511
3955414
4040873
3518141
3500755
3549909
3670623
3795242
3852569
3816020
3041906
Total Liabilities and Equities
23921485
23908416
24538372
25859777
25823162
24254246
24361572
25545338
26328685
27189093
27615479
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.137
Abeer Al-Khoury, Hossam Haddad,
Atef Al-Bawab, Mohammed Othman, Ayman Khazaleh
E-ISSN: 2224-2899
1534
Volume 19, 2022
Source: Arab Bank annual reports
*All the figures in thousand Jordanian Dinars' (000)
Table 2: The calculated Arab Bank Ratios (2000 -2019)
Income Statement Items
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Interest Expenses
61.82%
54.78%
44.29%
36.76%
35.51%
38.80%
41.25%
45.70%
41.17%
34.27%
28.38%
Provision for Loan Facilities
3.36%
4.49%
4.28%
5.25%
3.36%
0.72%
2.06%
0.81%
0.47%
7.35%
21.26%
Staff and Other Overheads
19.09%
22.89%
30.32%
36.48%
36.24%
33.70%
27.46%
23.75%
24.79%
30.45%
30.70%
Income Tax
3.02%
2.80%
3.40%
3.92%
5.39%
5.70%
5.86%
5.86%
6.41%
6.42%
6.61%
Net Income
12.72%
15.05%
17.72%
17.60%
19.50%
21.07%
23.37%
23.89%
25.74%
21.50%
13.05%
Total Income Statement
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Financial Position: Assets
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Cash
10.16%
11.20%
11.80%
13.59%
13.42%
12.16%
10.53%
13.64%
13.30%
17.34%
19.93%
Customer Loans
24.10%
25.82%
26.26%
24.36%
20.52%
21.91%
23.44%
16.53%
14.34%
12.05%
11.25%
Securities, Net
62.64%
60.26%
59.26%
59.54%
63.67%
62.88%
63.14%
67.12%
69.65%
68.21%
66.42%
Fixed and Other Assets
3.10%
2.73%
2.68%
2.51%
2.38%
3.05%
2.90%
2.64%
2.70%
2.70%
2.40%
Total Assets
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Financial Position: Liabilities
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Deposits
89.15%
89.18%
88.12%
87.87%
86.88%
85.43%
80.64%
80.87%
81.92%
81.29%
81.75%
Other Liabilities
7.62%
2.74%
3.14%
2.87%
3.97%
3.51%
2.58%
2.41%
2.34%
2.25%
2.02%
Shareholders Equities
3.23%
7.54%
8.74%
9.26%
9.53%
11.05%
16.79%
16.72%
15.74%
16.46%
16.24%
Total Liabilities & Equities
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
DuPont Ratios
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Net Profit Margin (NPM)
12.72%
15.05%
17.72%
17.60%
19.50%
21.07%
23.37%
23.89%
25.74%
21.51%
13.01%
Asset Utilization (TAT)
7.39%
6.36%
4.99%
4.41%
4.40%
5.65%
6.11%
6.60%
6.15%
5.03%
4.77%
Equity Multiplier (EM)
30.96%
13.26%
11.44%
10.80%
10.49%
9.04%
5.96%
5.98%
6.36%
6.08%
6.16%
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.137
Abeer Al-Khoury, Hossam Haddad,
Atef Al-Bawab, Mohammed Othman, Ayman Khazaleh
E-ISSN: 2224-2899
1535
Volume 19, 2022
Return on Equity (ROE)
29.12%
12.69%
10.12%
8.38%
9.01%
10.76%
8.51%
9.43%
10.06%
6.58%
3.83%
Source: Created by author depending on the Arab Bank annual reports (2000-2021)
Income Statement Items
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Average
Interest Expenses
30.11%
32.52%
33.25%
31.92%
30.36%
31.93%
31.40%
30.69%
35.03%
29.13%
26.95%
37.50%
Provision for Loan Facilities
8.11%
10.43%
3.73%
2.84%
0.90%
13.28%
15.88%
9.54%
0.75%
26.72%
23.38%
5.94%
Staff and Other Overheads
32.31%
29.09%
28.20%
39.77%
47.69%
31.39%
30.50%
26.82%
31.86%
27.46%
33.15%
30.67%
Income Tax
6.28%
7.17%
8.53%
9.45%
9.72%
7.95%
7.55%
7.18%
7.72%
2.90%
4.26%
6.35%
Net Income
23.19%
20.79%
26.29%
16.01%
11.33%
15.44%
14.66%
25.78%
24.64%
13.70%
12.23%
19.47%
Total Income Statement
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100%
Financial Position: Assets
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Average
Cash
16.53%
14.03%
17.65%
15.19%
18.21%
14.09%
13.43%
12.76%
14.25%
17.77%
20.58%
14.16%
Customer Loans
14.28%
16.91%
10.91%
12.81%
10.15%
14.15%
12.57%
12.56%
12.40%
12.87%
9.56%
16.87%
Securities, Net
67.00%
66.73%
69.22%
69.92%
69.68%
69.62%
71.83%
72.23%
70.35%
67.12%
67.75%
66.47%
Fixed and Other Assets
2.19%
2.33%
2.22%
2.08%
1.96%
2.14%
2.18%
2.45%
3.00%
2.22%
2.10%
2.52%
Total Assets
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100%
Financial Position: Liabilities
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Average
Deposits
81.87%
81.71%
81.52%
82.09%
81.54%
81.91%
81.27%
82.39%
82.30%
82.90%
83.45%
83.48%
Other Liabilities
2.19%
2.08%
2.37%
2.28%
4.83%
3.66%
4.16%
3.24%
3.28%
2.92%
2.70%
3.18%
Shareholders Equities
15.94%
16.21%
16.11%
15.63%
13.62%
14.43%
14.57%
14.37%
14.41%
14.16%
13.80%
13.33%
Total Liabilities & Equities
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100%
DuPont Ratios
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Average
Net Profit Margin (NPM)
23.22%
20.79%
26.29%
16.00%
11.33%
15.44%
13.62%
25.77%
24.64%
15.67%
12.24%
19.41%
Asset Utilization (TAT)
4.73%
5.25%
5.36%
5.26%
5.25%
5.67%
5.87%
6.58%
6.52%
5.12%
4.62%
5.62%
Equity Multiplier (EM)
6.27%
6.17%
6.20%
6.40%
7.35%
6.93%
6.86%
6.95%
6.93%
7.06%
7.24%
8.83%
Return on Equity (ROE)
6.90%
6.74%
8.76%
5.39%
4.38%
6.61%
5.49%
11.81%
11.16%
5.66%
4.09%
9.29%
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.137
Abeer Al-Khoury, Hossam Haddad,
Atef Al-Bawab, Mohammed Othman, Ayman Khazaleh
E-ISSN: 2224-2899
1536
Volume 19, 2022
Figure 2: DuPont Analysis 2000-2019
Source: Created by author depending on the Arab Bank annual reports (2000-2019)
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.137
Abeer Al-Khoury, Hossam Haddad,
Atef Al-Bawab, Mohammed Othman, Ayman Khazaleh
E-ISSN: 2224-2899
1537
Volume 19, 2022