For the first time since it was founded in 1930 in Palestine by Abdul Hamid Shuman Sr., the Shuman family is absent from the administrative board of the Arab Bank, one of the Middle East’s largest financial institutions.
Sabeeh Al Masri was named chairman by the board of the Arab Bank on Sunday, following the abrupt resignation of the founder’s grandson, Abdul Hamid Jr. earlier this month. He quit the presidency of the board after several disagreements with the CEO Nehme Sabbagh and some of the board members.
In his resignation letter, Hamid Jr. said management had steered one of the Arab world’s largest privately owned banks away from its founders’ vision.
The ambitious founder, with only seven shareholders and a capital of 15,000 Palestinian Lira, launched Arab Bank in Jerusalem, and moved in 1948 to Amman.
In a Sunday news conference, Masri pledged to help Arab Bank, which now has a $45.6 billion balance sheet spread across 30 countries and five continents, maintain the steady growth it has shown in recent years.
“All the financial ratios point to a solid financial position and to continued growth in every aspect of the balance sheet,” Masri said.
Now, more than eighty years after the launching of the Arab Bank, the Shuman family is left with only 4 percent in shares, while Lebanon’s Hariri family is the largest shareholder, controlling about 22 percent of the bank, through its partnership with Saudi Oger, Oger Middle East Holding and the Mediterranean Bank.
The gradual increase in Hariri family control over the bank has created controversy in Jordan because the bank, considered as a cornerstone of the local economy, is no longer in Jordanian hands. Every now and then, rumors spread of moving the headquarters from Amman to Beirut or a sale of the large stake.
In his Sunday press conference, Masri denied media reports the Hariri family sought to sell its stake, while Mohammad Hariri, who attended the board meeting, denied the family was seeking to sell its holding to any party, including National Bank of Kuwait which some banking circles said was being discussed.
“This is untrue and baseless, we have not entered into any talks or negotiations over the sale of our shares to NBK or any party,” Hariri told Reuters after the board meeting.
Amid concerns regarding the bank’s fate now that Shuman family is totally absent from the bank’s administration, the Jordanian Central bank has delivered some statements assuring the Arab Bank will not be affected at all, praising the strength of the financial situation of the group locally, regionally and internationally.
Forty-five percent of the Arab Bank shares are traded in Amman Stock Exchange. Meanwhile, the Jordanian Public Institution for Social Security owns 15.5 percent in shares, the Saudi Ministry of Finance has 4.5 percent and the Qatari Ministry of Finance, Economy and Trade owns just under 2 percent in shares.