Chairman’s message

Distinguished brothers and sisters, shareholders

May the peace, mercy and blessing of Allah be upon you

2021 started with a lot of apprehension and anxiety about the fate of the COVID pandemic and its impact on our lives, including our health, humanitarian, socio-economic and financial sectors. There was also  some cautious hope that the pandemic was being contained thanks to medical progress, the development of vaccines and international precautionary measures. This cautious optimism was positively reflected  on the socio-economic life and the financial cycle, as economic activities gradually resumed, and a recovery was felt following last year’s slowdown and setback which drained financing capabilities and growth. However, the return of economic growth was accompanied by many difficulties and risks. And like other banks, the Palestinian Islamic Bank (PIB) had to adapt to the conditions left by the pandemic by taking  exceptional measures to support and revitalize many economic institutions in the country. It resorted to unusual hedges on funds in general for fear of any unexpected development caused by the epidemic and  the new decline in economic and financial life it may leave behind. This is in addition to the exposure of the Palestinian National Authority to Israeli political pressure and the arbitrary economic and living  measures imposed by the occupying force, which usually have restrictive and negative effects on the Palestinian economy.

In the face of these restrictive conditions, PIB continued to develop its services by preparing for the launch of the Temenos banking system in 2022 and training its employees to use it. In terms of digital  development, it established a special committee for digital transformation, as part of its focused efforts to achieve significant progress in this field. The IslamiTalk service was also launched to allow customers to  access multiple new banking services through an interactive automated response over the phone. The online banking and mobile banking services were expanded to include an additional number of companies. The World/Platinum cards were developed in cooperation with MasterCard as the first Islamic card of this kind in Palestine. Moreover, Jawwal pay wallet services were launched through the bank’s branches  and a strategic partnership with PalPay was signed to provide special payment services through the bank’s digital channels. There are several services which will be launched next year, including an update to  ATMs and the launch of a new version of the digital channels and plastic-free card services.

In this regard, it is worth noting that PIB won many international awards and certificates, including the International Business Magazine best digital bank in Palestine award for 2021.

Many of these achievements aimed at keeping pace with technological developments in the banking world would not have come to life without the great efforts of the Bank's Sharia Supervisory Board which ensures PIB’s new products are consistent with Islamic Sharia.

In addition to its focus on promoting its technological capabilities and improving its services, PIB also played a social role. It continues to support public health, education, and institutions caring for the underprivileged and people with special needs across Palestine.

These concerted efforts were positively reflected on PIB’s financial indicators. At the financial level, there was an increase in equity to USD 138.64 million, compared to USD 123.33 million in the previous year, and the bank’s assets grew by USD145 million, at a rate of 9.6%, and reached USD 1,656 billion. Customer deposits increased by 125.52 USD million, a 10.78% increase, and reached USD 1,290 billion, while liabilities increased by USD 129.77 million 9.35% to USD 1,517 billion. In terms of the bank’s market share in direct financing, it decreased from 8.79% in 2020 to 8.28% in 2021, and the bank’s market share in customer deposits increased from 7.28% in 2020 to 7.81% in 2021.

In terms of profit, the bank achieved a net profit of USD 13.68 million after tax, an increase of 22.52% compared to 2020.

In conclusion, I would like to extend my sincere thanks to the Palestinian Monetary Authority and the Supreme Sharia Supervisory Board for their role in ensuring the stability and development of the financial and banking sectors. I would also like to thank the Capital Market Authority and the Companies Controller for their constructive and positive role in serving this important economic sector.

God grants success.

May the peace, mercy and blessings of Allah be upon you.

Maher Masri            

Chairman of the Board of Directors

About PIB

Overview

The Palestine Islamic Bank Public Shareholding Company (PIB) was established in 1995, and the bank started its banking activity in early 1997. Its authorized capital is 100 million shares, with a nominal value of one US dollar per share. Since its establishment, PIB’s paid-in capital has been increased several times, most recently in 2021, where it was increased to USD 85 million from USD 80 million in 2020.

PIB engages in banking, financial, commercial and investment activities in accordance with the provisions of Islamic Sharia, through 44 branches and offices and more than 80 ATMs throughout Palestine. This attests to its reputation as the largest Islamic banking network in Palestine and is consistent with its vision to be the leading PIB that responds to the needs and requirements of its customers.

The bank constantly seeks to meet the financial needs of all segments of the local community. It spares no effort to achieve its mission with excellence by providing quality and modern banking solutions which are consistent with the provisions of Islamic Sharia. It also focuses on developing and attracting highly qualified human resources to provide the best Islamic banking services to customers and innovate products meeting their ambitions to ensure they enjoy a distinctive banking experience. Thanks to these efforts, PIB was chosen as the “Best Islamic Bank in Palestine” for 2021, by the International Business and International Finance magazines.

The bank operates according to a well-studied and systematic plan for digital transformation. It launched a number of digital services and products for customers to enable them to access banking services quickly, easily and around the clock. As a result of these endeavors, PIB received the “Best Digital Bank in Palestine” award for 2021 by International Business Magazine.

PIB believes in its role in contributing to sustainable development, by implementing projects with a positive and sustainable impact, especially in the health and education sectors. It is also making efforts to protect the environment by adopting a solar energy system in 15 branches and offices. This helps in reducing harmful gas emissions. In parallel with these efforts, PIB was the first Palestinian Islamic bank to join the UN Global Compact, a UN-led initiative to encourage companies from all over the world to adopt sustainable and socially responsible policies. Thanks to these efforts, PIB received the “Best Socially Responsible Bank” in Palestine award for 2021, from the International Finance magazine.

Vision

To be a pioneer in providing Islamic banking, financing and investment services and activities using the latest technology to meet the needs and requirements of clients and stakeholders.

Mission

Achieving excellence in target markets by providing comprehensive and modern banking solutions in accordance with the provisions of Islamic Sharia. Constantly striving to meet the financial needs of all segments of the local community to achieve profit-sharing.

Values

• Integrity and Transparency
• Loyalty and Commitment
• Honesty and Sincerity
• Objectivity and Credibility
• Fairness and Equality
• Modernity and Diversity

Our Strategy

The Bank continuously develops its strategic plan and strives to adapt it to suit internal and external variables, in order to achieve its desired goals. The Bank’s participatory approach is based on planning that begins with setting objectives involving different administrative levels in the process. The Bank's main objectives are to:

•  Provide innovative Islamic financial solutions by developing and providing high-quality, innovative products and services and to enhance the culture of Islamic banking both inside and outside of the Bank, in addition to establishing partnerships with local, regional and international financial institutions.
•  Achieve excellence in customer relationship management through continually measuring and developing customer satisfaction and loyalty and providing high quality services.
•  Develop staff and provide a good working environment by encouraging cooperation and supporting integration, nurturing talent and developing planning, evaluation and decision-making skills.
•  Increase the efficiency and quality of the Bank's business by digitally developing all operations of the Bank and working to provide an infrastructure which ensures optimal use of data and enhances customer access efficiently and effectively, in addition to taking advantage of possible synergies with partners.
•  Increase utilization of available income sources through developing investments, improving returns, and diversifying sources of income to enable the Bank to increase its sources of income and enhance its profitability.
•  Reduce the risks to the business by adhering to local and international procedures and requirements, integrating the principles of risk management into administrative and operational processes, promoting a culture of compliance and combating money laundering, and tracking and evaluating the performance of the Bank's portfolio to minimize risks.
• Promote sustainable community participation by supporting sustainable social responsibility initiatives and acting as a community partner serving the country and its citizens.

Awards

Palestine Islamic Bank has been voted:

Our Banking Network

Our Banking Network

The Bank is considered the widest Islamic banking network in Palestine, whereas it has worked on expanding this network since its incorporation that being in conformity with the strategy of financial inclusion which the Palestinian Monetary Authority launched, believing in citizens’ right to enjoy banking services around the country.

44 branches and offices at your service

• 24 branches
• 19 offices
• 1 cash offices

Working with Covid Implications

Addressing the repercussions of the COVID Pandemic

The negative repercussions of the COVID pandemic continued in 2021, but PIB was able to deal with them efficiently and professionally, thanks to the proactive plans approved by the Board of Directors for digital transformation and risk management. These plans enabled the bank to ensure business continuity and proceed with the implementation of its development plans in line with its schedule. PIB continued to provide services as usual to the public and preserved the interests of its investors.

PIB succeeded in addressing the repercussions of the pandemic thanks to a number of measures which included the following:

Promoting the use of remote communication technologies

PIB strengthened its remote work procedures, by resorting to the latest technologies and reducing, to the highest possible degree, face-to-face meetings and interactions. This sought to ensure social distancing, reduce the spread of the virus, and limit its transmission among employees.

Strengthening health security measures

In 2021, PIB continued to implement its health procedures to maintain the safety of its employees and customers, by providing protective equipment, imposing social distancing and adhering to the recommendations of the Ministry of Health, including raising awareness among employees and the public of sound health practices.

Vaccinating employees

As part of the bank’s efforts to ensure the safety of its employees, it worked, in coordination with the Ministry of Health, to provide the necessary vaccines and organized vaccination days for them, because PIB believes in the importance of vaccination to reduce infection rates and build immunity.

Promoting electronic services

In light of the continuing health crisis, PIB enhanced its digital services to enable customers to access banking services quickly and easily without the need for face to face interactions. In this context, the bank added a new set of banking services that customers can enjoy through the various 24/7 channels of the Digital Contact Center.

PIB also launched the "IslamiTalk" digital service, which allows customers to access banking services themselves by simply calling the bank. It also expanded the list of companies and entities covered by electronic payment services.

Strengthening security and protection networks and activating risk aversion plans

To build on the measures taken since the beginning of the pandemic, PIB strengthened its assets’ security networks and protection systems, and developed risk aversion plans that focus on maintaining a strong portfolio and enhancing cash liquidity indicators. It also communicates with customers to limit cases of default, discuss the impact of the crisis on them and help them to overcome it.

Permanently coordinating with regulatory and government authorities and complying with their instructions

In line with its approach to comply with government and supervisory authorities’ regulations, PIB complied with all PMA instructions and constantly coordinated with governors in areas where the infection rates are high or strict measures or closures are imposed in order to preserve the interests of customers and ensure their access to services as required

Most important projects for 2021

"Over 100" Saving Campaign

To consolidate the concept of saving among members of society and promote good economic habits, PIB launched a saving campaign entitled “Over 100… new prize with each draw”, which encourages customers to open new savings accounts or replenish their existing accounts by providing a set of major cash prizes. The value of each draw was different to increase interaction with the campaign through the bank's social media accounts, as a competition was launched to guess the prize value every time.

6 clients from different governorates won the campaign prizes:

PCI-DSS Payment Cards Data Security Standards Compliance Certificate

In a new achievement for customer data security protection, PIB received the PCI-DSS Payment Cards Data Security Standards Compliance Certificate for the second year in a row.

PIB obtained the certificate following the examination and audit of all its policies, procedures and security requirements for payment cards, by Sovereign Secure, a company specialized in information security and approved by the Global Payment Cards Security and Protection Council. It was found that PIB met all the requirements of the certificate.

Obtaining PCI-DSS certification is a prerequisite for dealing with world leading card service providers which have developed such standards.

PCI DSS Objectives

• Protecting cardholders' data.
• Regularly monitoring card networks and periodically maintaining them.
• Following safe work procedures and policies for card handling.
• Educating customers on how to maintain the confidentiality of their card data.
• Developing sustainable programs to educate employees about the procedures they must follow to secure the bank against any risk threatening customer data security.

Strengthening strategic partnerships

In 2021, PIB strengthened its local and international strategic partnerships. In this context, a one-million-dollar investment agreement was signed with the Sanad Global Fund to support small, medium and micro enterprises in Palestine. This agreement was part of PIB’s focus on supporting micro, small and medium sized enterprises and enabling them to overcome financial crises. This will be reflected in the restoration of economic activity and the achievement of the required growth rates in Palestine.

PIB also signed an agreement with the European Palestinian Credit Guarantee Fund to provide guarantees in return for the financing of targeted sectors.

The 3D Secure feature provides additional protection for customers' data when they make online payments using bank cards linked to the global MasterCard network at sites and stores that support such features. This free feature provides security and protection against fraud and unauthorized online transactions.

Advantages

• This feature is activated for all existing and new bank card holders.
• This feature provides additional protection against the risks of fraud and unauthorized use of the card when making online payments.
• It provides reassurance and confidence when buying from websites that support such features.
• It provides protection against theft, fraud or forgery.

Cooperation agreement with "Paltech" to provide electronic archiving services

As part of its efforts to adopt best practices in information management and security, PIB signed a cooperation agreement with "Paltech" for Technology and Investment – a Wasel Group company - to provide electronic archiving services for the bank's documents.

In accordance with the agreement, all documents are kept in a modern way to promote the bank’s business performance and develop an integrated institutional memory.

Electronic Archiving System

The first phase of this project was launched. It revolves around archiving and auditing the daily portfolios of branches and operation departments through the use of technology. This reduces human burden and errors by verifying the validity of entries before archiving them.

Automation of banking operations

This project assigns daily routine operations to an automated system to increase efficiency. In this context, some operations have been automated such as the automated coverage.

Awards received by PIB

Best Islamic bank in Palestine

As a result of PIB’s continuous achievements in 2021, whether financial or in the field of innovation and development of new products and services that are compatible with Islamic Sharia, it received the “Best Islamic Bank in Palestine” award, according to the international magazines International Business and International Finance. PIB was chosen following an assessment carried out by two magazines specialized in finance and banking based on the best standards used to measure performance.

Receiving this award is an affirmation that PIB is moving in the right direction in its business and plans, especially for digital transformation and risk management. It also proves that it adheres to the best standards of good governance, especially in light of the exceptional circumstances imposed by the pandemic in the last two years.

The award for best digital bank in Palestine

As a result of its outstanding achievements in digital transformation, and the quick, easy and 24/7 digital services it provides to customers, PIB was awarded the “Best Digital Bank in Palestine” for 2021 by the International Business magazine.

Best socially responsible bank

Thanks to its outstanding social responsibility efforts and the projects it carried out in 2021 to support sustainable development, especially in the health and education sectors, PIB was named the “Best socially responsible bank” in Palestine for 2021 by International Finance magazine.

Digitization Strategy

Promote the services of the Digital Contact Center

Due to the increasing demand by customers to communicate with the bank and request banking services through the Digital Contact Center, the banking services provided by the center were expanded in 2021 to include checks, accounts, cards, financing and electronic services. This will make customers’ lives easier, especially in light of the health circumstances imposed by the pandemic.

The center now uses the latest technologies to communicate with customers. The skills of its employees in the field of Islamic banking were developed. The center also helps in evaluating the quality of service provided to customers through various branches and offices. Its employees communicate with customers and correct mistakes, if any.

The center provides a 24/7 service to customers with no interruption, including on official holidays and working days, through its multiple digital channels:

Communication channels

• WhatsApp: +970 59 444 3 444
• Facebook: m.me/PalIslamicbank
• Direct phone number: 1700 220 220
• Website: https://www.islamicbank.ps
• Email: service@islamicbank.ps

Launch of “IslamiTalk”

As part of its digital transformation strategy, PIB launched "IslamiTalk", a service which allows customers to benefit from a number of quick, easy and 24/7 banking services.

"IslamiTalk" is an interactive voice system through which customers can access banking services by simply calling the bank's number 1700220220. There is no need for a prior subscription.

Expanding the online payment network

In view of the importance of electronic services and the increasing demand for them, especially in light of the health circumstances imposed by the COVID pandemic, PIB expanded the electronic payment network for “Islami Online” and “Islami Mobile” to include many additional parties. As part of these efforts, two strategic partnership agreements were signed with PalPay and JawwalPay to benefit from the excellent electronic services they provide to the local community.

Under the agreement with the two companies, PIB will expand the list of approved companies and institutions for electronic shipping and payment services provided to its customers through its electronic platforms to ensure an easy, fast and secure environment.

A cooperation agreement to develop the ATM network

As part of PIB’s digital transformation strategy and to provide the latest banking services to its customers, the bank signed a cooperation agreement with Jordan Business Systems “JBS” to develop its ATM network. With this, PIB will be the first to provide such services in Palestine and the region and will purchase new ATMs that meet the latest international specifications. It will also update and develop the current network.

The new ATMs will be installed in 2022 and will provide a set of excellent services designed for the bank by JBS.

World/Platinum cards from Mastercard

As part of PIB’s digital transformation strategy and to provide advanced electronic payment solutions to customers which are compatible with Islamic Sharia, PIB is ready to launch two World/Platinum cards from Mastercard. PIB will be the first bank to provide this service in Palestine. The card will allow customers to purchase goods and merchandise, pay for services, make online purchases, and pay in installments or by cash, in line with Islamic Sharia.

The two cards will also give customers access to the benefits and discounts offered by MasterCard worldwide.

Preparing for the implementation of the new banking system

In 2021, PIB continued its preparations to implement the new banking system, in cooperation with the international company Temenos, and ensure all the capabilities and expertise necessary.

The project, which will be completed in 2022, will help in meeting the current and future needs of customers and regulators, and is in line with PIB’s endeavors to provide the best banking services.

The implementation of the new banking system, whose components are robust and flexible, will help PIB in simplifying its systems, enhancing the digital experience of its customers, adapting to the rapidly changing regulatory environment, and dealing with the next generation of Islamic banking.

External Audit Report

Financial Statements

To download Financial Statements for the year 2021Click Here

Key financial indicators

Financial statements compared with the previous year in US dollars

Trading activity on the Bank's stock in US dollars

Legal procedures and issues:

The number of cases filed against the Bank within its normal activity was 75 and 63 cases as of December 31, 2021 and December 31, 2020, respectively. The value of the cases filed against the Bank amounted to $ 15,602,224 and $8,612,159 as of December 31, 2021 and December 31, 2020, respectively. In the opinion of the Bank’s management and legal department, the Bank will not incur any further liabilities from these cases and has sufficient provisions to deal with them.

Government protection and benefits:

There are no governmental protections or privileges enjoyed by the Bank or any of its products in relation to laws or regulations and there are no patents or franchises obtained by the Bank.

Decisions with material impact on international quality standards:

There are no decisions issued by the executive, judicial, or legislative authorities; international organizations; Israeli Occupation, or by any other entity, which have a material impact on the work of the Bank, its products, or its ability to continue as a going concern.

Related party contracts and deals:

There are no contracts and deals with related members of the board of directors not disclosed in the financial statements.

The Bank's subsidiaries:

The bank has no subsidiaries.

Relying on major suppliers and customers:

There are no specific suppliers or major domestic or external clients who make up 10% or more of the bank's total purchases.

External auditing:

The bank, based on the relevant instructions and regulations, has a contract with an external auditing company for the purpose of submitting a report on the fairness of the annual financial statements to the shareholders of the Bank based on international standards for the practice of auditing and the professional rules, principles and ethics.

External auditor:

Ernst & Young

Investing in affiliated companies

The following are the details of investments made in affiliate companies as of December 31, 2021:

• Al-Takaful Palestinian Insurance Co. was established by the end of 2006. It provides insurance and reinsurance services consistent with the Islamic Sharia. It is headquartered in Ramallah and has branches across Palestine. Its capital as on December 31, 2021 amounted to USD 10,000,000.
• Palestine Ijara Company is headquartered in Ramallah. It provides Islamic financial leasing services for small and medium projects in line with the provisions of Islamic Sharia. As of December 31, 2021, its capital amounted to USD 12,000,000.

The following table shows a summary of the financial information related to the Bank’s investment in its affiliated companies as of December 31, 2021:

The Annual Directors Conference

In preparation for PIB’s 2022 plan to develop its future strategic framework and action plan, and to promote internal communication, the first annual conference for PIB directors was held. The executive management, regional managers, department and unit managers, and managers of branches and offices attended. The conference aimed at strengthening leadership and teamwork in management and discussing ways to develop PIB’s banking operations and services.

The conference was held in Jericho and broadcast on Teams in Gaza. It included a special presentation of the new e-payment products that the bank intends to launch in 2022. Three roundtables were held with the participation of a number of speakers from the bank’s leadership. They addressed several issues related to PIB’s future work and plans, such as its digital transformation strategy, the efficiency and quality of operations and services, challenges, the local market and banking in Palestine. The conference presented a clear vision that will contribute to the development of PIB’s business and services and will help in overcoming various challenges.

The conference recommended proceeding with PIB’s digital transformation plan. It also provided a set of recommendations related to the development of banking operations and services to promote efficiency and ensure a one-of-a-kind, quick, easy and 24/7 banking experience for customers.