Jordan

Jordan has 19 banks: 14 Jordanian and five foreign, of which four are Islamic, after Invest Bank merged into Bank al Etihad. The sector is internationally oriented. On the IMF's consolidated basis, deposit-taker assets were JD132.3bn (US$186.6bn) in the first quarter of 2026, about three times GDP, reflecting Jordanian banks' operations abroad, above all Arab Bank, whose group assets reached US$78.2bn at end-2025. Domestic intermediation is smaller: banks' credit facilities in Jordan totalled JD37.2bn and deposits JD51.6bn at end-July 2026.

Banks are largely deposit-funded and highly liquid: the liquidity coverage ratio was 241% and the net stable funding ratio 140% in the first quarter of 2026, and foreign-currency deposits fell to JD10.5bn at end-July 2026 from JD10.8bn at end-2025 while dinar deposits rose to JD41.1bn. Credit to the resident private sector rose by JD661m, or 2.2%, in the first seven months of 2026. Consolidation is under way: Bank al Etihad has completed its merger with Invest Bank, with Bank al Etihad as the surviving company.

Capital is adequate but asset quality is weaker than in the Gulf. The regulatory capital ratio was 17.7% and the CET1 ratio 15.6% in the first quarter of 2026, while NPLs were 6.3% of gross loans with provisions covering 66.6%. Profitability is moderate: return on assets was 1.7% and return on equity 9.3%, with a cost-to-income ratio of 46.1%. Arab Bank reported group profit of US$1.13bn for 2025, up 12%.

The dinar's peg to the US dollar anchors monetary policy: the CBJ cut its rates by 25bp in December 2025 and raised them by 25bp in September 2026, while its gross foreign reserves were US$26.6bn at end-July 2026. Key risks are spillovers from regional conflict to tourism, trade and sentiment; government debt of JD49.7bn (110.2% of GDP), including holdings of the Social Security Investment Fund, at end-June 2026; and elevated NPLs.