meed-logo

line1 line2 line3
SIGN IN / REGISTER

Caution governs Jordanian bank lending

12 June 2026

 

In a region where geopolitical turbulence has amplified by an order of magnitude, Jordan is managing to stand out as a beacon of relative stability, with the Hashemite kingdom’s banking sector acting as a case in point.

Lending has grown in recent years, with credit up by an average 4.9% between 2020 and 2025, according to the Central Bank of Jordan (CBJ) – a faster rate than average nominal GDP growth of 2.3% over the same period.

The IMF took care to note an increase in credit to the private sector in its latest Article IV assessment of Jordan, standing at 80.1% of GDP at end-2024, compared to just 66.6% 10 years earlier.

Banks in the kingdom ended 2025 in a liquid state, but caution remains the watchword for local lenders. The loan-to-deposit relationship bears that out. For that year, deposits ended up 7.1% to JD50bn ($70.5bn), while credit facilities were up just 3.7% to JD36.1bn ($50.9bn).

Analysts see this as a case of Jordanian banks being prudent, given the tricky operating environment and limited lending opportunities, rather than banks being excessively defensive. 

According to Christos Theofilou, an analyst at Moody’s Investors Service, it is cautious lending in fraught macroeconomic conditions.

“On the one hand, we’ve seen a structurally strong and stable deposit base that has been growing more compared to lending. That indicates a certain degree of limited risk appetite, but also the fact that, given the challenging operating conditions, there were limited business opportunities in the market,” says Theofilou.

Liquidity banked

Jordan’s banks look able to withstand further shocks, given solid capital positions and relatively strong earnings performances. Arab Bank, the largest lender, saw net profits grow 12% last year to $1.13bn, despite a highly charged geopolitical situation across Jordan and the neighbouring Palestinian territories.

As Moody’s notes, Jordanian banks’ funding base remains stable, with banks mainly deposit-funded – with deposits at 67% of total assets as of December 2025 – mostly comprising well-diversified retail deposits. The ratings agency noted that banks retain the capacity to increase lending without relying on more volatile and costly external funding, as indicated by the 72% loan-to-deposit ratio.

The earnings outlook in Jordan may be better than other banking sectors in the immediate region, but this does not translate into a picture of booming profits going forward.

“Profits should remain resilient, but we’re not expecting any significant improvement,” says Theofilou. “We have the challenging operating conditions, and the lower interest rates that have come down over the past few years. On the other hand, banks have had lower provisioning in the past 12 to 18 months compared to the period prior to that.”

Asset quality remains a strong point, despite some weakening over recent years. Moody’s sees non-performing loans (NPLs) falling below 5.5% this year from 5.8% in June 2025.

However, the continuing Iran conflict and its deleterious regional impacts – including on the West Bank, where about 9% of Jordanian banks’ loans are located – suggest that bank exposures to troubled sectors will require focus.

Concentration bites

Another challenge is the banks’ high credit concentration among large corporates, with a noted high exposure to real estate.

Commercial and residential real estate loans accounted for 17.4% of total credit facilities as of year-end 2024, while residential mortgages accounted for 40.9% of household credit. Regulatory oversight may limit the impacts – the CBJ caps loans for real estate at 20% of local currency customer deposits.

The real estate exposures are meaningful, but Moody’s views overall concentration risk as more material rather than real estate risk per se.

“So, on the one hand, Jordanian banks have real estate loans, both commercial and residential, slightly below a fifth of the total credit facilities,” says Theofilou. “Banks also face challenges in quickly disposing of properties, but within the context of a relatively lengthy foreclosure process. On the flipside, we see Jordanian banks having fairly high collateralisation, so they do hold a lot of collateral against the real estate exposures.”

The CBJ has earned plaudits for its regulatory oversight, with the IMF lauding its strengthening of the Financial Stability Committee, while refocusing its role on macroprudential policies and systemic risks. 

Jordanian banks’ brisk uptake of digital technologies has also been a positive.

Last year, digital payment systems in Jordan recorded over 184 million digital transactions, exceeding $38bn in value. The CBJ has introduced an AI regulatory framework for the sector and the authorities are now working to burnish the country’s credentials as a fintech hub, based on a 90% plus internet penetration. 

In the year ahead, Jordanian banks will be looking to find exposures to new lending opportunities, given the past risk aversion that has prevented them from building stronger growth avenues.

Projects beckon

Big new infrastructure projects could yet come to the fore as bankable opportunities for local players. For example, the National Water Carrier Project, costed at $5.8bn and aiming to increase water supply by 40%, is looking to achieve financial close this summer. It is the type of project that could prove significant in helping diversify local lenders’ exposure away from real estate towards infrastructure.

“If we see a lot of these infrastructure projects requiring financing coming to the market, then we could see a bit of a pickup in lending growth as well,” says Theofilou.

New lending opportunities will come from large corporates and infrastructure-related lending. Those will play the key role in any significant pickup in credit growth, says the Moody’s analyst, in contrast to the small- and medium-enterprise (SME) sector, which poses a different challenge for banks.

“The SME segment does represent a potential growth opportunity and it’s supported by policy focus, however its expansion is constrained by the operating environment. The sector is exposed to high overall credit risks, and when conditions are challenging, banks tend to be more cautious in lending to the SME markets,” says Theofilou.

So long as the regional conflict persists, banks will be inclined more towards caution than exuberance in their lending approaches. And yet that strong and stable inclination may be what serves them best in a notably turbulent year in the Middle East’s recent history.

https://image.digitalinsightresearch.in/uploads/NewsArticle/17204176/main.gif
James Gavin

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Mace confirms Muscat cultural complex appointment

    3 September 2026

    UK-headquartered engineering firm Mace Consult has confirmed its appointment to manage the construction of the Sayyid Tarik Bin Taimur Cultural Complex in the Al-Seeb area of Muscat.

    The firm will provide project leadership, programme management, commercial oversight and delivery assurance services.

    The complex will be developed on a 400,000-square-metre (sq m) site. Centred on an urban plaza, it will bring together a range of cultural and institutional facilities.

    These include a 23,000 sq m national library, a 15,500 sq m national archives, four facilities buildings with a combined area of 14,000 sq m, and a 5,000 sq m energy and data centre.

    At the heart of the development is the national theatre, which will include a 1,000-seat auditorium and a 250-seat auditorium. The facilities will sit within landscaped gardens and water features, alongside a signature canopy structure.

    In October 2023, the Ministry of Culture, Sports & Youth awarded a design-and-build contract for the complex to a joint venture of local firm Saif Salim Issa Al-Harrasi and Turkiye’s Sembol Construction, MEED reported.

    In January 2026, UAE-based steel structure manufacturer Emirates Building Systems, a wholly owned subsidiary of Dubai Investments, won a contract to deliver the project’s structural steel package.

    Last month, Kuwait-based engineering and architecture consultancy SSH was appointed as the project’s construction supervision consultant.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19314737/main.jpg
    Yasir Iqbal
  • Read the September 2026 MEED Business Review

    3 September 2026

    Download / Subscribe / 14-day trial access

    Nuclear energy is becoming an increasingly important part of the GCC’s long-term power strategy, as governments seek to strengthen energy security, diversify generation and meet decarbonisation goals.

    Saudi Arabia’s civil nuclear cooperation deal with the US marks a major step forward for its plans to develop its first commercial nuclear power plant, while rising electricity demand across the region is creating further momentum.

    With the UAE already operating the Middle East’s first commercial nuclear power station, Saudi Arabia targeting up to 17GW by 2040 and Bahrain exploring small modular reactor technologies, our latest Agenda feature examines the growing role of nuclear energy in the GCC’s future power projects pipeline.

    September’s Market Focus turns to Kuwait, where the country’s oil-dependent economy has weathered unprecedented disruption, yet major investment and infrastructure deals point to resilience.

    This edition also includes a downstream industry report, exploring the accelerating investment in gas processing and associated infrastructure across Mena, the major projects driving spending, and the growing focus on NGL recovery, efficiency and higher-value gas products.

    In the latest issue, we speak to Emsteel chief commercial officer Michael Rion about the Abu Dhabi steelmaker’s plans to strengthen its position in domestic and international markets, including the launch of its ES600 steel rebar and the expansion of its long-standing partnership with Adnoc Group.

    We also examine the GCC’s accelerating tunnelling boom, as major metro, sewerage and road projects increasingly move underground. The feature explores the scale of investment, the contractors and technology driving the market, and the challenges facing the region as demand for tunnelling expertise and equipment grows.

    We hope our valued subscribers enjoy the September 2026 issue of MEED Business Review. 

     

    Must-read sections in the September 2026 issue of MEED Business Review include:

    > AGENDA: Gulf nuclear revival takes shape

    INDUSTRY REPORT:
    Downstream
    > Gas processing takes centre stage in Mena region

    > INTERVIEW: Emsteel persists with business productivity and efficiency

    > TUNNELS: The Gulf’s next construction boom is happening underground

    > KUWAIT MARKET FOCUS: 
    > COMMENT: Kuwait keeps dealmaking alive under fire
    > GOVERNMENT: Kuwait shows tentative signs of economic development
    > BANKING: Necessity is the mother of invention for Kuwaiti lenders
    > OIL & GAS: Regional war to have lasting impact on Kuwaiti oil sector
    > POWER & WATER: Kuwait utilities investment shifts towards water
    > CONSTRUCTION: Kuwait construction holds up despite regional strife
    > MARKET TALK: Kuwait stands resilient amid regional tensions
    > DATABANK: Kuwait’s economic gains are dented by conflict in 2026

    > MEED COMMENTS: 
    >     Cash is king for Dubai construction
    > Aramco moves apace with Jafurah unconventional gas campaign
    > Neom’s next phase is crucial to green hydrogen pipeline
    > Oman opens door to direct power sales

    > GULF PROJECTS INDEX: Qatar leads gains as Gulf total holds

    > JUNE 2026 CONTRACTS: Middle East contract awards

    > ECONOMIC DATA: Data drives regional projects

    > OPINION: The history of false dawns

    > BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19308287/main.gif
    MEED Editorial
  • Contractors submit bids for Dukhan field facilities upgrade

    3 September 2026

     

    Contractors have submitted bids to QatarEnergy for a key tender to upgrade facilities at the Dukhan oil field in Qatar, about 80 kilometres west of Doha.

    Dukhan, Qatar’s first and only onshore oil field, was discovered in 1938, with oil production starting in 1939-40. The country currently produces about 1.8 million barrels a day (b/d) of crude, with the Dukhan field accounting for about 350,000 b/d of output.

    QatarEnergy issued the tender for the Dukhan production facilities upgrade (DPFU) Phase 1B (Part 2) project on 8 June, and initially set a bid submission deadline of 26 July for contractors, which it later extended to 9 August.

    The following local contractors, among others, are understood to have submitted bids for the DPFU Phase 1B (Part 2) tender, according to information obtained by MEED Projects:

    • Doha Petroleum Construction Company (Dopet)
    • Galfar Al-Misnad Engineering & Contracting
    • Qatar Engineering & Construction Company (Q-con)

    QatarEnergy originally stipulated a bond validity of 150 days (until 23 December) and a bid validity of 120 days (until 23 November) for the project.

    The engineering, procurement, installation and commissioning (EPIC) scope covers upgrades to 56 oil manifolds, 108 gas-lift manifold slots, chemical injection systems and key pumping facilities, along with associated piping, instrumentation, control, electrical and civil works.

    The scope includes demolition of obsolete equipment, degassing station enhancements, and full testing and handover. It also encompasses additional capacity enhancement works under Part 3, mainly the installation of new oil export and produced-water transfer pumps, along with supporting facility modifications.

    The project involves complex interfaces and shutdown-critical activities requiring expertise in live-plant integration.

    The Dukhan oil field extends over an area of about 80km by 8km and consists of four reservoirs: Khatiyah, Fahahil, Jaleha and Diyab. The first three are oil reservoirs. The more recently developed Diyab reservoir contains non-associated gas and is estimated to hold around 2 billion barrels of crude oil reserves. Diyab lies on the southern flank of Dukhan.

    ALSO READ: Frontrunners emerge for Qatar offshore oil field expansion
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19312615/main.jpeg
    Indrajit Sen
  • Oman tenders advisory for 3GW solar IPPs

    3 September 2026

    Nama Power & Water Procurement Company (Nama PWP) has invited bids for legal consultancy services for the development of three 1GW solar independent power projects (IPPs).

    The projects will connect to Oman’s main interconnected system (MIS) and are targeted to reach commercial operation by the second quarter of 2030.

    The bid submission deadline is 10 October.

    The state offtaker has now tendered three separate consultancy contracts for the solar IPPs, including two issued in July.

    The bid submission deadline for the financial and commercial consultancy services tender is 10 September.

    Earlier, on 15 July, a technical advisory tender was issued for the three projects as part of a 4GW programme.

    As MEED reported, the financial advisory tender covers four 1GW solar projects connected to the MIS, also targeting commercial operation by the second quarter of 2030.

    It is understood that bids were submitted for this contract on 26 August.

    Oman Electricity Transmission Company (OETC) had earlier outlined the planned grid connection for four 1GW solar IPPs as part of the sultanate’s renewable energy expansion through 2030.

    The projects are included in OETC’s Five-Year Annual Transmission Capability Statement for 2026-30.

    The first, the 1GW Adam solar IPP, is scheduled for grid integration in 2028 and is further ahead in the procurement process, with Nama PWP issuing a request for qualification for the project in June.

    OETC said it expects the 1GW Al-Kamil 2 solar project to be integrated in 2030 through the planned Sadaf 400kV grid station. The 1GW Dhofar solar IPP and 1GW Mahadha solar IPP are also scheduled for integration in 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19311796/main.jpg
    Mark Dowdall
  • US firm wins work on QatarEnergy NGL train project

    3 September 2026

    Register for MEED’s 14-day trial access 

    US-based Nessco has  that it has won a subcontract to provide telecommunications, radio and security systems for QatarEnergy’s project to add a fifth natural gas liquids (NGL) train at its fractionation complex in Qatar’s Mesaieed Industrial City.

    The subcontract was awarded to Houston-headquartered Nessco by India’s Larsen & Toubro Energy Hydrocarbon (LTEH), in its capacity as the main contractor performing engineering, procurement and construction (EPC) works on the NGL-5 project.

    MEED reported last September that QatarEnergy had selected a consortium of LTEH and Greece-headquartered Consolidated Contractors Group (CCC) to execute EPC works on the NGL-5 project.

    The aim of the project, estimated to be worth $2.5bn, is to build a fifth NGL train with the capacity to process up to 350 million cubic feet a day of rich associated gas from QatarEnergy’s offshore and onshore oil fields.

    In a statement confirming its contract award in October last year, LTEH said the scope of work on its contract “encompasses engineering, procurement, construction, installation and commissioning of a natural gas liquids plant and allied facilities for processing rich associated gas (RAG). This also involves all associated utilities and offsites and integration with existing facilities.

    “The RAG sourced from offshore and onshore oil fields will be treated at the plant to remove impurities like H2S, CO2 and H2O, producing value-added products such as lean sales gas, ethane, propane, butane and hydrocarbon condensate,” Bombay Stock Exchange-listed L&T said. 

    Under the consortium arrangement, LTEH, as the lead partner, will be responsible for engineering and procurement, while CCC will handle construction activities.

    Project scope of work

    Associated gas from the PS1, PS2 and PS3 offshore fields, as well as the Dukhan onshore field, is processed at existing facilities at the NGL complex in Mesaieed – specifically, the Fahahil stripping plant, NGL-1 and Qapco ethane recovery units.

    The planned NGL-5 facility will replace these three units at the Mesaieed complex and process gas from the PS1, PS2 and Dukhan fields.

    The scope of work on the project involves EPC of units for the following functions:

    • Feed gas compression
    • Slug handling
    • Gas sweetening
    • Dehydration
    • Mercury removal
    • NGL fractionation
    • NGL recovery
    • Product treatment
    • Propane refrigeration
    • Acid gas enrichment
    • Sulphur recovery
    • Anti-flaring
    • Utilities
    • Boil-off gas recovery
    • Drains and collection networks
    • Effluent water treatment plant
    • Carbon dioxide treatment and sequestration/export
    • Brownfield modifications
    • Product rundown pipelines

    QatarEnergy intends to start operations at the NGL-5 facility by the second quarter of 2028.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19310738/main5414.jpeg
    Indrajit Sen