Chairman’s message

Brothers and sisters distinguished shareholders,

May the peace, mercy and blessings of God be upon you

During the year 2023, the Bank continued to implement its programs in accordance with its strategic plan for the years 2023-2026, which included modernizing its core banking system and diversifying its electronic products and digital services network, with the launch of options such as prepaid cards, depositing cheques through ATMs and completing the bulk of the electronic archiving system, while at the same time adhering to the highest standards in risk management and international accounting rules, as well as full compliance with Sharia standards for Islamic banking. The Bank continued with the implementation of its social responsibility program, targeting institutions working in health and education and those that care for the less fortunate, in addition to the contribution of the bank's employees in volunteer campaigns in the different governorates of the country. The bank received several awards and certificates, including the award for Best Islamic Bank in Palestine for the year 2023 according to the World Union of Arab Bankers.

In the last quarter of the year, Israel carried out a wide aggression on the Gaza Strip, and all aspects of life ceased to work in the Strip, along with massive destruction, killing, displacement and starvation at a scale that is unparalleled in contemporary history. This concurred with Israeli measures in the West Bank, which included incursions and a suffocating siege that led to a significant halt in economic movement, forcing the bank to take multiple measures to face this situation, the most important of which being maintaining the safety of its employees and its assets and continuing to serve its customers. The Bank first assisted its employees to enable them to cope with the harsh conditions that forced the vast majority of them to flee their homes. Sadly, several of our employees were martyred as well as many of their family members. The Bank, through a United Nations institution, has also contributed to providing meals to citizens as part of its national and social responsibility, and this support shall continue whenever circumstances permit.

In parallel with these measures, the Bank has allocated large reserves in anticipation of any material losses that have arisen and/or will arise as a result of this aggression, which was reflected in a decrease in profits compared to last year. Despite these circumstances and measures taken, the Bank's core financial indicators remained positive, as the volume of deposits increased at the end of the year compared to last year, and the Bank maintained the same loan-to-deposit ratio as well as equity as last year.

Despite the challenges that the Palestinian economy is going through, which increased with the last quarter of 2023, the bank proved the strength and stability of its financial position, as it was able to grow its assets by approximately 3.5% compared to the previous year by an amount of almost 53 million US dollars. The bank was able to raise its deposits to reach the highest level in its history by more than 8% compared to the previous year. Net direct financing also recorded an increase reaching about 985 million US dollars in 2023, up from 898 million US dollars in 2022 with a growth rate of 9.64%, while net profit after tax reached 4.85 million dollars, as the decrease in profits came as a result of the repercussions of the aggression on the Gaza Strip and the formation of additional reserves in response to such. The rate of return on equity was 3.27% while the return on assets was 0.31%.

The circumstances that the Palestinian homeland is going through have proven the immunity of its financial institutions, including Palestine Islamic Bank, whose employees have made an exceptional effort in maintaining work continuation and providing services to the public. We would like to specifically acknowledge the members of the PIB family in the Gaza Strip who endured adversity in the harshest possible conditions to carry out their work.

We also extend our greetings and thanks to the Bank's Sharia Supervisory Board, which spared no effort to advise and guide the executive management and contribute to the development of financial products in accordance with Islamic banking provisions.

God grants success,

May the Peace and Blessings of Allah be with you,

Maher Masri 

Chairman of the Board of Directors

About PIB

Overview

The Palestine Islamic Bank Public shareholding company 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 2023, where it was increased to 100 million US Dollars from 90 million US Dollars in 2022.

The Bank engages in banking, financial, commercial and investment activities in accordance with the provisions of Islamic Sharia, through 43 branches and offices and 103 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 Palestinian Islamic bank 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 safe and modern banking and investment solutions which are consistent with the provisions of Islamic Sharia. It also works on building sustainable partnerships with different stakeholders and with the community while focusing 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.

The bank operates according to a well-studied and systematic plan for digital transformation. It launched a number of digital services and products and electronic payment solutions. As a result of these endeavors, PIB received the “Best Islamic Bank in Palestine” Award for 2023 by the World Union of Arab Bankers.

PIB believes in its role in contributing to sustainable development, by implementing annual 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 several of its 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, an UN-led initiative to encourage companies from all over the world to adopt sustainable and socially responsible policies.

Mission

To be the leading Palestinian bank in Islamic finance and investment activities and services with a modern and developed perspective. 

Excellence in providing modern and safe banking and investment solutions in accordance with the provisions of Islamic Shari’a, and to work towards sustainable partnerships with stakeholders and the community.

Values

• Integrity and transparency
• Commitment and professionalism
• Justice and honesty
• Modernity and excellence
• Reliability and loyalty

Strategic Goals

Leading in the Palestinian banking sector, through:

• The promotion of effective and quality business development activities
• The development of a supportive work environment and the promotion of a sense of belonging
• Leadership in digital transformation
• The reduction of business-associated risks
• The continuation of a sustainable community partnership

Awards

Palestine Islamic Bank has been voted:

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.

43 branches and offices at your service

• 24 branches
• 19 offices
• 103 ATMs

Highlights of 2023

Tawfeer Kareem Campaign

In 2023, PIB launched the Tawfeer Kareem Savings Campaign, which encourages customers to open new savings accounts or replenish their existing accounts through raffles for grand cash prizes and thousands of special instant gifts.

The campaign received great interaction from customers and encouraged them to open new accounts or grow their existing accounts

Encouraging card payments

As part of the Bank's efforts to enhance customers' orientation towards electronic payment solutions, including card payments, several campaigns were launched in 2023 with the aim of reducing the use of cash payments and encouraging customers to keep up with progress in financial services.

Among these campaigns were the "Pay with Your Card and Win" campaign, the "Pay with your card and leave it to us" campaign, the "Win Your Payments x2" campaign, and the "Pay Ramallah Municipality Fees" campaign, during which dozens of cash prizes were drawn.

PIB employees also participated in the awareness campaign launched by the Palestine Monetary Authority to encourage payment via cards at gas stations, which included various governorates of the West Bank.

Awareness of Islamic Banking and PIB Banking Services

The Bank continued its awareness raising efforts on Islamic banking and banking services in general, including holding many meetings and seminars in different governorates of the country, during which explanations were provided to the attendees on the main concepts and formulas of Islamic banking, in addition to introducing them to banking services and products provided by PIB and its new electronic services.

The Bank also promoted awareness of Islamic banking through the media, awareness programs and competitions on Islamic banking concepts, in addition to awareness through the Bank's social media platforms.

Participation in regional and international conferences

With the aim of promoting and exchanging experiences at the regional and international levels, PIB participated in several conferences related to banking and finance in general and Islamic banking in particular.

In Toronto, Canada, a delegation from the Bank, along with several experts, specialists and managers of financial institutions around the world, participated in the SIBOS Conference and Exhibition 2023, which was organized by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) and is considered a leading annual event in the global financial services sector.

The conference discussed many important issues that have become the talk of the hour at the level of the global banking and financial services sector, such as digital currencies, financial inclusion, artificial intelligence, cross-border payments, risk management, governance and sustainability.

In Bahrain, the Bank participated in the 21st annual AAOIFI Sharia Boards Conference, which included discussion sessions with Sharia scholars, policy makers, decision makers, leaders and other experts in the Islamic financial industry.

The First Inspection Tour of PIB’s Quality Management System

In order to verify the Bank's continued compliance with the standards of the International Quality Standard ISO 9001-2015 based on the certificate granted to the Bank in 2022, the external quality auditor GCL International, which operates in accordance with the British Standards and Metrology Organization UKAS, carried out the first inspection round of the quality management system at PIB, where the external auditor decided that the bank will continue to obtain the quality certificate for the year 2023.

At the level of the management review of the quality management system, the quality performance indicators have witnessed a significant improvement as a result of the bank's response to the results of measurement and tracking operations, studying the root causes and developing appropriate solutions that improve the bank's performance, noting that a special quality audit function has been created within the bank to enhance this commitment.

Sponsorships & Exhibitions

In order to enhance PIB’s presence at the local level and based on its keenness to support local events and contribute to their success, the Bank sponsored many exhibitions and festivals during the year 2023 due to their importance in moving the economy in light of the difficult circumstances witnessed by various governorates of the country.

During these festivals, PIB's teams promoted banking products and services through the Bank's stand at each of them.

Cooperation Agreement with Al-Zaytouna Islamic Finance Institution

Given the Bank's keenness to strengthen partnership and cooperation with Islamic financial and banking institutions in Palestine due to its importance in developing the Islamic financial industry and moving towards further prosperity and development in this sector, an agreement was signed with Al-Zaytouna Islamic Finance Institution to help it integrate the market, lay the foundations for sound institutional work and achieve its development goals by benefiting from the expertise of the Bank's distinguished staff and achieving the greatest possible cooperation between the two sides.

Human Resource Management System Development

To facilitate the tracking of HR processes and development in performance and enable employees to access services related to the human capital system easily and with minimal time and effort, the Human Resources Management System (MENAME) has been updated and a new version has been launched to include a comprehensive list of services and information.

Best Islamic Bank in Palestine

In recognition of the Bank's achievements during the year 2023 and the launch of new innovative and Sharia-compliant products and services, the Bank was awarded the "Best Islamic Bank in Palestine" by the World Union of Arab Bankers.

Receiving this award is further confirmation that the Bank is moving in the right direction in developing its business and implementing its various plans, especially in the areas of digital transformation, risk management and compliance with the best standards of good governance.

Enhance internal communication and an interactive work environment

The Bank has strengthened its internal activities aimed at fostering a consolidated family atmosphere and increasing the spirit of belonging and loyalty to employees by implementing many internal activities and launching programs that care for them from different aspects. Among these programs was the One Family Draw for employees and their first-degree relatives, during which dozens of cash prizes were granted to employees and their first-degree relatives who have savings accounts, with the aim of enhancing their savings culture.

In order to devote an interactive work environment and stimulate competition and excellence at the level of the bank's regions and branches, the "Distinguished Branch Reward" program was launched, under which a quarterly evaluation was conducted for each region and the winning branches were selected according to approved weights and criteria that contributed to achieving the required targets.

The Big Winner program was also launched, aiming to promote proper nutritional culture for employees and reach a healthy weight through a scientific method. Dozens of employees from various branches and departments of the bank participated in the program and were registered with centers specialized in healthy nutrition, which in turn worked with them for months and helped them change their eating habits to reach the excellent results that were achieved.

Several internal events and activities were also carried out to commemorate various religious and national occasions, such as the event of commemorating the Palestinian Heritage Day to emphasize holding on to the Palestinian identity.

Political and Economic Repercussions

Despite the positive results achieved by the bank until the end of the third quarter of the year, the political and economic developments of the last quarter, especially the war on Gaza, had significant repercussions on the financial results for the year 2023. This was shown by the decline in profits, which comes as a result of the bank's allocation of reserves to face the effects of the situation in Gaza, in compliance with the instructions of the relevant supervisory authorities.

Despite frequent closures in the West Bank and the suspension of the bank's operations in Gaza during the fourth quarter of the year, the bank maintained the stability of its financial position thanks to the Board of Directors and its various committees adopting best practices in good governance, institutional excellence and risk management. This comes in addition to the distinguished efforts of PIB’s employees in various branches and departments, and under the supervision of the Sharia Supervisory Board, which maintains compliance of all the bank's business with Sharia provisions and principles.

Despite the difficult and dangerous circumstances in the Gaza Strip during the last quarter of the year, PIB’s branches in the Gaza Strip, according to available capabilities, put in their best effort in customer service, especially during ceasefire days, where cards were issued to customers who lost their cards, salaries were disbursed. For a long time, they continued to provide ATM services, which also benefited customers of other banks that do not have ATMs in some areas.

Digitization Strategy

Launch of Cheque Deposit through ATMs

In line with PIB’s continuous efforts in the field of digital transformation and enabling customers to enjoy banking services quickly, easily and around the clock, the cheque deposit service was launched through the most modern ATMs in Palestine, where cheques are processed as soon as they are deposited by the customer in ATMs that support this service.

This highly secure service complements the project to develop the bank's ATM network by providing it with new devices, which contain some features that are specially designed for the bank. These ATMs are characterized by speed and efficiency and use technologies that facilitate customer access to their accounts such as contactless technology. They will also meet future needs of customers in terms of ATM services.

Prepaid Card Launch

In line with PIB’s digital banking services and multiple electronic payment solutions to its customers, the PIB Prepaid Card was launched. Issued instantly in the Bank's branches and offices, it provides the possibility of purchasing through local and international points of sale in a more convenient way than cash payment. Given the way it works, the prepaid card enhances the customer’s sense of security when making purchases on the Internet, as it is replenished when needed.

The launch of this card is also in line with the general trend to encourage use of digital services and electronic payment solutions instead of cash, given the importance of this step in promoting economic development and increasing levels of financial inclusion in Palestine.

Enhancing the network of Tayseer Card discounts

As part of the Bank's efforts to enhance customer orientation towards electronic payment solutions and the use of cards in purchases, the network of discounts offered by the Tayseer Card has been expanded by signing dozens of new agreements with commercial establishments in multiple sectors and various governorates, under which instant discounts and cashback will be granted to cardholders.

Launching E-SADAD and Hokomati services in cooperation with the PMA

In line with the directions of the PMA and the Palestinian government to transform the Palestinian society into a digital society and connect all service providers from all sectors with banks and payment companies, the bank, in cooperation with the PMA, launched E-SADAD and Hokomati services, which represent an easy and fast platform to show and pay various government fees, municipality fees, university fees, and utility bills in the sectors of electricity, water, telecommunications, internet and others

Modifications and upgrades to the branch support system and the DCC

In the context of developing, facilitating and raising the efficiency and quality of work in PIB’s branches, offices and digital call center (DCC), some changes and developments were carried out on the support system to streamline and expedite various services.

Launch of ATM Monitoring System

In parallel with the development and continuous expansion of the ATM network, PIB launched the Dynamic View ATM monitoring system in 2023, which helps monitor the provision of services through ATMs and increases the levels of security in providing the service.

Direct linking of the screening system with Dow Jones

In order to increase the efficiency of customer screening on global lists, the bank's screening system has been linked directly with Dow Jones. This speeds up the screening process and provides many other features and services that were not available before.

Developing and modernizing a range of systems

As part of the continuous development and modernization process at PIB, a number of developments were made to a number of key systems in operations, such as the transfer system, which has been developed to ensure that it meets the latest international standards and SWIFT requirements.

In addition, PIB worked on developing the collateral management system to raise its efficiency, developing the salary transfer system, and launching a system for calculating concentrations, reducing time and effort and raising the efficiency of the collateral inspection process.

New card management system services have also been added and the card printing system has been updated, speeding up and streamlining the printing process.

In order to raise the efficiency and quality of cheque-related operations, the electronic clearing system has been updated and new services have been added to it, in line with the developments made by the bank in this aspect and with the launch of the cheque deposit service through the bank's ATMs.

External Audit Report

Financial Statements

To download Financial Statements for the year 2023 Click Here

Key financial indicators

Trading activity on the Bank's stock in US dollars

Financial statements compared with the previous year in US dollars

Legal procedures and issues:

The number of cases filed against the Bank within its normal activity was 90 and 86 cases as of December 31, 2023 and December 31, 2022, respectively. The value of the cases filed against the Bank amounted to $ 12,270,571 and 12,765,217 as of December 31, 2023 and December 31, 2022, 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 affiliates

The following are the details of investing in affiliates as on December 31, 2023:

• Al-Takaful Palestinian Insurance Public Joint-Stock Company Ltd. (Al-Takaful) was established at the end of 2006 and practices insurance and reinsurance in accordance with the provisions of Islamic Sharia through its head office in the city of Ramallah and its branches in Palestine. During the year the company's paid-up capital was increased by an amount of 1,000,000 USD through the distribution of bonus shares to become 11,000,000 USD as on 31 December 2023.
• The Palestinian Ijara Private Shareholding Company (Ijara Company) was established and headquartered in the city of Ramallah. The company practices Islamic leasing for small and medium enterprises in accordance with the provisions of Islamic Sharia. The company's capital as on December 31, 2023 amounted to USD 12,000,000.

The following table shows a summary of the financial information related to the Bank's investment in its affiliates as on 31 December 2023: