HIS MAJESTYKING ABDULLAH THE SECOND IBN AL HUSSEIN

HIS ROYAL HIGHNESS THE CROWNPRINCE HUSSEIN BIN ABDULLAH II

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Content

Board of directors

Letter fromthe Chairman

Letter from theGeneral Manager

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13870

150

Disclosures

Letter fromthe Chairman

Consolidated financial statements

CorporateGovernance

Products andservices

Letter from theGeneral Manager

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BOARD OF DIRECTORS REPORT ANDTHE FINANCIAL FIGURESFOR THE FINANCIAL YEAR 2017

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Board Of Directors

Chairman of the Board: Messrs. Société Générale de Banque Au Liban/ Represented by Mr. Hassan Hamdi Khalil Mango Deputy Chairman of the Board: Messrs. Sogelease Liban/ Represented by Mr. Antoun Nabil Nicolas Sehnaoui Board Member: Messrs. SGBL Insurance SAL/ Represented by Miss Noha Espiridon Khalil Abou SaadBoard Member: Mr. Gérard Albert Goulven GarzuelBoard Member: Mr. Gregoire Yves Marie LefebvreBoard Member: Dr. Ahmad Ibrahim Khalil MangoBoard Member: Dr. Fawaz Hatim Sharif Zu’bi Board Member: Mr. Mufleh Moh’d Awad AkelBoard Member: Mr. Khalil Anis Khalil Nasr Board Member: Mr. Georges Elie Georges SaghbiniBoard Member: Mr. Philippe Joseph Bernard DuboisBoard Member: Mr. Omar Khaled Rasheed Agha

Legal Advisors: Messrs. Dajani & AssociatesExternal Auditor: Messrs. Ernst & Young, Deloitte & Touche (Middle East) - Jordan

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Dear shareholders,

In my name and on behalf of my colleagues, members of the Board of Directors, I am pleased to submit to you Société Générale De Banque – Jordanie’s (SGBJ) Annual Report for 2017, including the Bank’s results of operations and achievements, its consolidated financial statements for the year ending on 31/12/2017 and its future plan for 2018.The global economic recovery has strengthened in 2017, following recent years of stagnant growth. With the economic recovery gaining more momentum, global economic growth is estimated to have reached 3.7% in 2017, having fallen to its lowest level since the global financial crisis at 3.2% in 2016. This improvement in the global environment was a result of a significant pickup in investment and trade and increased manufacturing output, supported by improved consumer and investor sentiments. Moreover, accommodative global monetary policies along with a moderation in oil prices have also contributed to global growth acceleration last year.The stronger momentum experienced in 2017 is expected to carry into 2018. The International Monetary Fund (IMF) forecasts global growth to reach 3.9% next year. This forecast reflects expectations that favorable global financial conditions and more upbeat sentiments in advanced economies will help maintain the recent acceleration in investment, supporting growth in large exporting economies. In addition, the recently approved U.S. tax reform is expected to further stimulate investment growth.The World economic outlook, however, remains subject to notable downside risks, including from sharp tightening of global financing terms compared to their current easy settings; and a possible correction in the US financial markets in case of firmer inflation and faster pace of Fed policy rate hikes. Moreover, the possible adoption of protectionist policies by some countries; increase in trade barriers; in addition to the rising

geopolitical tensions, notably in East Asia and the Middle East; together with a rebound in oil prices; all pose additional downside risks, threatening to derail the recent global growth momentum.On the local front, real GDP growth rate is expected to reach 2.1% in 2017, a marginal increase of 0.1 percentage points above its level in 2016, as the economy remained significantly impacted by the difficult regional events. Local economic growth was also hit by the contractionary fiscal policy, which accompanied the public sector financial reforms, and by the increase in local interest rates following the U.S. Federal Reserve rate hikes. As a result, the Jordanian banking sector was affected by the weakening economic and investment activities. Additionally, the increase in deposits rates exceeded that of credit rates, resulting in reduced interest spreads. Concerning SGBJ, the Bank has further improved its financial position and market shares, however, profits were affected by the shrinking interest spreads. Based on the results achieved, the Board of Directors has recommended to the Shareholders the distribution of a cash dividend equivalent to 7.5% of paid up capital for 2017.In conclusion, I would like to extend my sincere thanks and appreciation to our customers and shareholders for their continued trust and patronage. I would also like to thank the Executive Management and employees for their efforts and contribution towards the success of their organization. I also like to grasp this opportunity to express my sincere gratitude and appreciation to the Central Bank of Jordan, the Jordan Securities Commission and the Companies Control Department for their continued cooperation and support to the local economy and the Jordanian banking sector, wishing our beloved country further progress and prosperity.

Chairman of the Board of DirectorsHassan Mango

Chairman’s letter

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To our valued shareholders,During 2017, the Bank managed to add new achievements in respect to its financial position and market shares, with total assets rising by 3.8% to mark JD1.35 billion at the end of last year, against JD1.30 billion at the end of 2016. This came mainly as a result of expanding the Bank’s loan book with the gross credit facilities portfolio growing by 14.6% to reach JD674.6 million at the end of 2017, compared to JD588.5 million at the end of 2016, in spite of the difficult economic conditions and the limited good lending opportunities. This also compared to an average growth rate of 8.1% for the total banking sector loans last year, resulting in an increase in the Bank’s market share in terms of gross loans to reach 2.7% at the end of 2017, up from 2.6% at the end of 2016.

Moreover, total customer deposits including cash margins grew by 7.5%, against about 1% for the sector, reaching close to JD1.2 billion at the end of 2017, hence bringing the Bank’s market share in terms of total deposits up to 3.3%, against 3.1% at the end of 2016.

Meanwhile, the Bank continued to maintain strong financial indicators, with net non-performing loans, after deducting suspended interest, representing 2.2% of net direct loans and the loan loss provision coverage ratio, including interest in suspense, reaching about 85%. Additionally, the Bank continued to have high liquidity and capital adequacy ratios, with the latter standing at around 19.4%; substantially exceeding Basel minimum capital requirement of 8% of risk-weighted assets and CBJ limit of no less than 12%.

At the operational level, achievements included launching a call center aimed at providing fast and efficient service to our customers by answering their inquiries and getting them acquainted with our products and services. We have also developed insurance products, which we will start marketing via our channels in 2018.

As part of its ongoing network development and renovation plans, the Bank completed the renovation of its Zarqa Branch in its new location, equipping it with the latest technological solutions. In the Corporate sector, we established a fully-fledged SME financing Department to keep abreast with market developments. We also signed two agreements with The Jordan Loan Guarantee Corporation (JLGC) to cover the risk of financing renewable energy and start-up business loans. Moreover, the Bank has been awarded the “Innovation

and Excellence Award for Efficiency and Effectiveness in Customer Service” by the Union of Arab Banks in October 2017.

On the investment side, the Bank has recently participated in two investment funds that have been launched by local banks in a joint initiative with the Central Bank of Jordan; one of which involves the investment in established high growth medium sized companies providing good financial returns, while the other entails the participation in the Jordan-Saudi Investment Fund, which aim at implementing mega economic viable projects in strategic sectors like energy, tourism and infrastructure. We have also established a Leasing Company during the fourth quarter of 2017 that is fully owned by the Bank.

In the corporate social responsibility framework, and stemming from its deep faith in its role as an important partner in serving and developing the local community, SGBJ took several initiatives in this area during 2017, providing support, sponsorships and donations to a number of healthcare, educational, cultural, artistic and humanitarian entities/events.

Concerning our future plans, the Bank aims to develop a number of new innovative products/services that fulfil customers’ evolving needs with changing market dynamics. Our plans also entail the renovation/ relocation of some of our existing branches to more vital areas, in addition to the expansion of our ATM network to better service our clients and enhance their comfort and experience. We also find an opportunity to expand into leasing by providing a full array of financial leasing products and services and to grow our SME financing portfolio in order to keep up with recent developments in the local market and to achieve the Central Bank of Jordan aspiration of supporting this sector, which has a significant contribution to the national economy.

In conclusion, I would like to express my sincere appreciation and gratitude towards the Central Bank of Jordan for its vital role in ensuring the safety and stability of the Jordanian banking sector. I also want to thank the Jordan Securities Commission and the Companies Control Department for their effective role in enhancing the business and investment environment. Finally, I would like to thank our loyal valued clients for their continuous trust, and our staff for their sincere efforts in serving the Bank.

With Utmost Respect,

General Manager

Nadim Abawat

General Manager Letter

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Disclosures

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A- Bank's Main Activities: Offering comprehensive financial and banking solutions in the field of clients' banking business and all economic sectors. B- The bank's branches’ geographical locations and the number of employees in each. SGBJ Branches:

JABAL AMMAN ALABDALI BRANCH HEAD OFFICE ALABDALITel: 4614925Fax: 4614874

PRINCE MOHAMMED STREET, ALANANI COMPLEX – BLDG. # 266

Employees # 4

Tel: 5600300Fax: 5693442

Abdali Development Area AYLA STREET, BLDG. #1

Employees # 8

Tel: 5600300Fax: 5693410

Abdali Development Area AYLA STREET, BLDG. #1Employees # 190

ALSEWAIFIEH ABDOUN ALMADEENAH ALMUNAWARAHTel: 5864079Fax: 5864024

PARIS STREET, ALRAWASHDEH COMPLEX, BLDG. # 2

Employees # 6

Tel: 5924637Fax: 5924639

5th CIRCLE - ZAHRAN STREET, ALNABER MEDICAL CENTER

Employees # 5

Tel: 5524869Fax: 5526381

ALMADEENAH ALMUNAWARH MAIN STR. BLDG. # 255

Employees # 4

ALWEHDAT TAJ MALL ALBAYDERTel: 4776101Fax: 4776681

PRINCE HASAN STREET, ABBAD BIN BESHER ROAD – BLDG. # 3

Employees # 5

Tel: 5920422Fax: 5920346

PRINCE HASHEM STREET, TAJ LIFE STYLE CENTER, TAJ MALL

Employees # 7

Tel: 5818170Fax: 5859713

ALBAYDER MAIN STREET, BLDG. # 34Employees # 7

MARKA IRBID KHALDA

Tel: 4897424Fax: 4898741

KING ABDULLAH ALAWAL STR., BLDG. # 406Employees # 4

Tel: 02/7242075Fax: 02/7240107ALHOSEN STREET

Employees # 6

Tel: 5371239Fax: 5371241

AMER BIN MALEK STREET, ALZEBDEH COMPLEX – BLDG. # 8

Employees # 5

ALZARKA MADABA ALKARAKTel: 05/3983396Fax: 05/3987564ALSAADEH STREET

Employees # 6

Tel: 05/3244929Fax: 05/3240077

KING ABDULLAH ALAWAL STR. Employees # 4

Tel: 03/2351906Fax: 03/2354338ALNUZHA STREET.

Employees # 3

ALFUHAIS ALAQABA JABAL ALHUSEIN

Tel: 4710139Fax: 4710162

ALALI BIN HUSEIN STREET, ALKAIYSER PLAZA Employees # 4

Tel: 03/2015138Fax: 03/2015139

ALHAMAMAT ALTOUNISIYEH STR.Employees # 6

Tel: 4648829Fax: 4648817

KHALED BIN ALWALEED STR., BLDG. # 54Employees # 4

External branches:There are no external branches for the bank outside the kingdom. C-The bank's capital investment volume

The bank's capital investment volume amounted to JOD 1,425,711.

1) Disclosures

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Société Générale- Jordan Brokerage Company

Société Générale -Jordan Brokerage was established on 06/06/2006 as an independent company with limited Liability for Societe Generale de Banque-Jordanie (SGBJ).

The company is a wholly-owned subsidiary of Société Générale de Banque-Jordanie (SGBJ) with a capital of JOD 750,000, where the company exercises financial intermediation, sale and purchase of securities listed on the Amman Stock Exchange (ASE) on behalf of clients. As a financial brokerage arm for Société Générale de Banque- Jordanie, the companyalways puts its efforts to attract Arab and foreign investors to contribute in the Jordanianfinancial market by providing financial services, and remaining updated with regional andglobal developments. The company aims to achieve a number of key objectives to enhance the quality of providedServices for different segments of investors (individuals and institutions) at a high level ofProfessionalism and efficiency, and as a strategic objective for any successful company,Société Générale – Jordan Brokerage aims to develop and increase revenues byattracting more customers and investors dealing in ASE. Société Générale – Jordan Brokerage has a team with a wide experience in the fieldof financial brokerage and customer service, these factors are always directed to meet theneeds of the existing & potential clients in an effective and active way.

Staff and Scientific Degrees:

Scientific DegreesEmployees NumberBachelor6

Affiliated Companies

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Board of Directors

Company’s full address:

SOCIETE GENERALE JORDAN BROKERAGE COMPANYAbdali Boulevard – Ayla Street - Bldg. No.1P.O Box: 560 – Amman 11118 JordanTel: 5681651 / 5600320Mobile: 079 7110802 / 079 7110801Fax: +962 6 5681258* The company has no other branche.

General Manager:

Building strategies of the company.Preparing general policy of the company regarding financial and administrative operations.Preparing reports of company’s achievements and operations to Be submitted to management committee.Develop and execute training programs for employees.Recommendations to the Board of Directors.

Financial Manager:

Supervising the preparation of financial reports.Control over customer accounts.Financial control over the company's accounts.

Compliance Officer:

Ensure compliance of the company and its employees with law and regulations of the official parties (regulator).Preparing guide for the compliance and to be permanently updated.Follow up of instructions and laws which are issued by JSC, SDC, and ASE.Follow up anti money laundry.Permanents supervision of company’s activities

Broker:

Execution of clients orders.Follow up debts.

Accountant/Customer Service:

General accounting.Follow up company’s accounts withBank.Customer care.

Société Générale- Jordan Brokerage Company Organizational Chart

Legal Consultant

Department Brokerage Manager:

Supervising brokerage activities.Follow up clients debts with brokersMarketing issues and bringing new Clients.Execution of clients orders.

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Société Générale- Jordan Brokerage Company Organizational Chart

SGBJ Leasing Company

Legal Form and Activities:

SGBJ Leasing Company incorporated according to Central bank of Jordan and the Companies Control Department approval as an independent Private Shareholding Company, under registry No (1216), dated 20/09/2017.SGBJ Leasing Company is a 100% -owned sister company of SOCIETE GENERALE DU BANQUE- JORDANIE, capital of five million Jordanian Dinars, and specialized in Financial Leasing activities, that is financing the acquisition of fixed assets via lease-to-own approach. The company facilitates the acquisition of long-lived depreciable fixed assets for wide variety of individuals including public and private sectors employees, private business owners, professionals, freelancers, and companies of different sizes (small, medium, and large). Moreover, the company aims specially to support and develop the growth of the industrial and real estate development sectors. The company set of goals include delivering its services to wide variety of retail and corporate clients, providing efficient and professional services, diversifying and upgrading services, and introducing new products in the future as well. Moreover, and as a strategic goal of the company, it aims at expanding and growing its business through attracting a growing number of clients of different types. Finally, SGBJ Leasing Company started to attract a highly educated, experienced, and professional leasing team in order to be able to provide elite services to its targeted clients.

Staff and Scientific Degrees

Scientific DegreesEmployees NumberBachelor1Masters1

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Company Address:SGBJ Leasing Company Abdali Boulevard – AYLA Street- Bldg. N⁰ 1.Tel: 5600305Fax: 5624415P.O. Box (560), Amman (11118), Jordan

* The company has no other branches

Board of Directors

General Manager

Compliance Officer

GM Admin Assistant andCompany Receptionist

Leasing OfficerSenior Leasing Officer Accountant

SGBJ Leasing Company Organizational Chart

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Messrs. Société Générale De Banque Au Liban (SGBL)Nationality: Lebanese Chairman of the Board since 31/10/1999 to present

Head of the Board Corporate Governance Committee

Represented by: Mr. Hassan Hamdi Khalil Mango Nationality: JordanianDirector Status: A non-executive and non-independent memberRepresentation Period: 15/10/2002 to present

Date of Birth: 1938

Educational Certificates: • Master's Degree, London School of Economics, 1962.• Bachelor's Degree in Economics from the American University in Beirut, 1959.

Professional Qualifications:• General Manager of Al Hanan for Investments Company since 2004.• General Manager of Hamdi & Ibrahim Mango Company since 2002.• Head of the Management Committee of Central Gas since 2005.• Deputy Head of the Management Committee of the Jordan Construction Materials Company/

representing Hamdi & Ibrahim Mango Company since 1999. • Shareholder and Head of Management Committee of several family-owned businesses.• Deputy Chairman of the Arabian Building Materials Company / Dubai.• Board members of the Arabian Building Materials Company/ Abu Dhabi • Shareholder in the Arabian Building Materials Company / Bahrain • Board member of the Arabian Building Materials Company/ Qatar

(3) A- Introduction to Chairman and Board Members

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Messrs. Sogelease Libanالجنسية: اللبنانيةNationality: Lebanese Board member: 31/10/1999 - 25/7/2011Deputy Chairman of the Board since 26/7/2011 to present

Head of the Board Credit Committee

Represented by:

Mr. Antoun Nabil Nicolas Sehnaouiالجنسية: اللبنانية

Nationality: Lebanese Director Status: A non-executive and non-independent memberRepresentation Period: 23/6/2011 to present

Date of Birth: 1972

Educational Certificates:• Bachelor of Science in Business Administration, specialization in International Finance and Banking

from the University of Southern California, 1994.

Professional Qualifications:• Chairman & CEO of Société de Banque et d’Investissement (SBI) SAL Holding since 2010. • Member of the Board of Directors of Société Générale Bank - Cyprus Ltd. (SGBCy) since 2010. • Chairman & CEO of SGBL SAL since 2007.• Member of the Board of Directors of the Association of Banks in Lebanon since 2007. • Chairman & CEO of News Media SAL since 2003. • Chairman & CEO of Fidus SAL since 2002.• Chairman of Liberty International Limited since 2017 • Member of the Board of Directors of Sogecab Liban SAL since 2000.• Chairman and shareholder of Sehnaoui Group companies and holds multiple management

positions at the Group since 1994.

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Messrs. SGBL Insurance SALNationality: Lebanese Board member since 28/4/2010 to presentMember of the Board Risk Management Committee Member of the Board Corporate Governance Committee

Member of the Board Credit Committee

Represented by:

Miss Noha Espiridon Khalil Abou Saad

Nationality: Lebanese Director Status: A non-executive and non-independent memberRepresentation Period: 26/7/2011 to present

Date of Birth: 1965

Educational Certificates:• Master's Degree in Economics, Lebanese University, 1987.

Professional Qualifications:Held the following positions at SGBL SAL since 1988:

• Business representative and owner of the unified digital banking system product for channels management of financial and banking operations through electronic means since April 2016

• Manager of the Head Office since August 2015• Deputy of “Deputy General Manager for Strategy, Finance and General Secretariat Divisions”

since November 2009.• Human Resources Manager, 2002-2009.• Head of Organization and Quality Department, 1997- 2002.• Head of Business Analysis Department, 1995-1997. • Member of the business analysis and implementation team of the new Banking System, 1990-1995.• Member of the Private Banking Team, responsible for the implementation of tools and

procedures to sell financial instruments, 1988-1990.Also held the following positions:

• Member of the Banking Terms and Conditions Committee at the Association of Banks in Lebanon since 2013.

• Member of the Human Resources and Social Committee at the Association of Banks in Lebanon, 2003-2009.

• SGBL Representative in the “Committee for Organization, Standardization and Information Technology” at the Association of Banks in Lebanon, 1997-2002.

• Manager analyst and opportunity SAL for Financial brokerage and advisory services, 1987-1988.

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Mr. Gérard Albert Goulven Garzuel

Nationality: French Board member since 24/4/2013 to presentMember of the Board Audit Committee Member of the Board Credit CommitteeDirector Status: A non-executive and non-independent member

Date of Birth: 1949

Educational Certificates:• Degree from the Institute Technique de Banque à l’International in Paris, 1980.

Professional Qualifications:Held the following positions at SGBL SAL:

• Advisor for the Chairman of Societe Generale in Lebanon since April 2015• Delegated General Manager, Supervisor of Société Générale De Banque – Jordanie (SGBJ),

Société Générale Bank - Cyprus Ltd. (SGBCy), Sogecap Liban SAL and Sogelease Liban SAL, 2008 – April 2015.

• Assistant General Manager in charge of the General Secretariat and Risk Divisions, 2007-2008.

• Assistant General Manager in charge of the banking network in Lebanon and supervisor of SGBJ banking network, 2002-2007.

Also held the following positions at Société Générale (SG) in France: • Head of Retail & Professional Banking at SG/ Caen- France, 1996-2002.• Corporate Department Manager at SG/ Niort- France, 1992-1996.• Corporate Department Manager at SG/ Monaco- France, 1987-1992.• Project Manager at SG/ Reims- France, 1985-1987. • Assistant Manager of the Private Banking Department at SG/ Bastia- France, 1980-1985.• Branch Manager at SG-Paris, 1971-1976.

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Mr. Georges Elie Georges Saghbiniالجنسية: اللبنانية

Nationality: Lebanese Board member since 26/7/2011 to presentHead of the Board Risk Management Committee Member of the Board Nomination & Remuneration CommitteeMember of the Board Audit CommitteeMember of the Board Credit Committee Director Status: A non-executive and non-independent member

Date of Birth: 1971

Educational Certificates:• Master's Degree in Economics, Paris-Sorbonne University, 1995.• Postgraduate Studies Diploma in Money & Banking, Paris-Sorbonne University, 1995.

• Master's Degree in Econometrics, Paris-Sorbonne University, 1994.

Professional Qualifications:• Chairman of LCB Investments Holding SAL since 2013. • Member of the Board of Directors of Société d’Investissements et de Services SAL since 2011. • Member of the Board of Directors of Société Générale Bank - Cyprus Ltd. (SGBCy) since 2010.• Deputy General Manager of SGBL SAL since 2008.• Chairman of SGBL Insurance S.A.L since 2008.• Member of the Board of Directors of Liberty International Limited since 2017.• Chairman of the Real Estate Company 415 SAL since 2017• Member of the Board of Directors of Fidus SAL since 2008.• Chairman of 799 Bassatine Tripoli SAL since 2006 • Chief Financial Officer (CFO) of SGBL Group since 2001.• Head of the Financial Control Division at SGBL SAL, 1999-2001.• Employee at the Financial Control Division in SGBL SAL, 1996-1999.

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Mr. Gregoire Yves Marie Lefebvreالجنسية: الفرنسية

Nationality: FrenchBoard member since 23/9/2014 to present Member of the Board Risk Management Committee Director Status: A non-executive and non-independent member

Date of birth: 1964

Educational Certificates:• Graduate from The Paris Institute of Political Studies, Economics & Finance Department, 1988.• Engineering Degree from the Institut National Agronomique Paris-Grignon, Specialization in Food

Industry Engineering, 1986.

Professional Qualifications:• Supervisor of SG Subsidiaries in Africa, Asia and the Mediterranean Region since end of 2013.• Representative of the SG Group Head of Specialized Financial Services & Insurance, 2011-2013. • SG Group Chief Operational Risk Officer, 2007-2011. • Head of the Basel 2 program at SG Corporate & Investment Banking, 2003-2007. • Director - Head of Corporate Marketing, Cash Equity Sales & Trading Department at SG-

London, 2001-2003.• Equity Corporate Finance Director for Central & Eastern Europe, Middle East and North Africa

Region at SG-London, 2000-2001. • Equity Corporate Finance Associate Director at SG Paris, 1997-2000. • Seconded by SG to work for 1 year at the French Stock Exchange Market Authority, 1996-1997.

• Inspector at SG Head Office, 1989-1996.

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Mr. Philippe Joseph Bernard Duboisالجنسية: الفرنسية

Nationality: FrenchBoard member since 18/12/2014 to present Member of the Board Credit Committee starting 18/12/2014Director Status: A non-executive and non-independent member

Date of birth: 1968

Educational Certificates:• Master’s Degree in Management Control from ESLSCA Business School in Paris, 1990.

Professional Qualifications:• Delegated General Manager at SGBL SAL since April 2015• Assistant Delegated General Manager at SGBL SAL August 2014 – April 2015 • Member of the Board of Directors CENTRE DE TRAITEMENT MONETIQUE S.A.L.• Regional Manager, Member of the Management Committee of SG International Retail Banking

(BHFM Paris), 2009-August 2014. • Executive Director- Corporate Finance & Investment Banking at SG Serbia (Belgrade), 2006-2009. • Deputy General Manager - Head of Corporate Banking at Banque de Polynésie- SG subsidiary

in French Polynesia, 2003-2006. • Held various executive positions in SG French Retail Banking network, 1993-2003.

• • • • • • • • • • • • • •

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Dr. Ahmad Ibrahim Khalil Mango الجنسية: أردنية

Nationality: Jordanian Date of Birth: 28 April 1944, Amman, Jordan

Educational Certificates:• B.Sc. (Economics), London School of Economics and Political Science, London University, 1965.• Ph.D. (Economics), University of St. Anrdews, Scotland, 1970.

Professional Qualifications:• Member of the Board of Directors of Hamdi and Ibrahim Mango Company Limited since 1968.• Member of the Board of Directors of Household Appliances Manufacturing Company Limited since 1980.• Member of the Board of Directors of Al Hanan Investment Co since 2004.• Vice Chairman and Member of the board of Directors of Al Nisr Al Arabi Insurance Company 1989 - 2006.• Member of the Board of Directors of Societe Generale De Banque Jordanie, since 2000.• Member of the Board of directors of Al Majdal Agricultural Company since 1992.• Chairman and Member of the Board of Several Family owned Companies.• Member of The Higher Planning Committee, Ministry of Planning, 1975-1995.• Member of the Board of Trustees of the Hashemite Educational Society since 1980.• Former Member of the Board of Directors of The Central Bank of Jordan 1989 - 1992.

• Former Member of the Board of Directors of The Amman Stock Exchange 1983 - 1989.

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Mr. Mufleh Moh’d Awad Akelالجنسية: أردنية

Nationality: JordanianBoard member since 23/4/2014 to present Member of the Board Risk Management Committee Member of the Board Audit CommitteeDirector Status: A non-executive and independent member

Date of birth: 1945

Educational Certificates:• MBA, University of Dallas-Texas, USA, 1979.• Bachelor's Degree in Economics & Political Sciences, Arab University of Beirut, 1974.• Bachelors in Law, University of Damascus, 1966

Professional Qualifications:• Founder & President of Akel Consulting (Banking & Finance) since 2010. • Executive Chairman of Jordan's Social Security Investment Unit, 2005-2008. • Chairman of Jordan Dubai Islamic Bank (formerly Industrial Development Bank), 2000-2009. • Chairman and CEO of the Association of Banks in Jordan, 2004-2006. • Member of the Board of Directors of the Central Bank of Jordan, 2005-2009. • Executive Regional Manager, Arab Bank plc- Head Office, 1982-2004.• Former Member of the Board of Directors in several companies, including (Jordan Telecom Company,

Jordan Cement Factories, Arab Tunisian Bank, Hikma Pharmaceuticals, Arab Aluminum Industry, Jordan National Shipping lines, Amman Stock Exchange, Jordan Worsted Mills and Jordan Hotel and Tourism Company).

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Dr. Fawaz Hatim Sharif Zu’biالجنسية: أردنية

Nationality: Jordanian Board member since 18/1/2016 to present Head of the Board Nomination and Remuneration CommitteeMember of the Board Corporate Governance CommitteeDirector Status: A non-executive and independent member

Date of birth: 1956

Educational Certificates:• Doctorate Degree in Mechanical Engineering 1982• Master’s Degree in Mechanical Engineering 1979

• Bachelor Degree in Mechanical Engineering and Economics 1978

Professional Qualifications:• Chairman and Chief Executive Officer of Silicon Badia Global Ltd. since 2016• Chairman of the Board of Trustees of the Crown Prince Foundation since 2016• Member of the Board of Directors of the Queen Rania Foundation since 2013• Chairman and Chief Executive Officer of Accelerator Technology Holdings 2005-2016• Member of the Board of Directors of Endeavor Jordan since 2010• Member of the Board of Directors of Oasis 500 since 2016• Member of the Board of Directors of Adritec Group International, Bahrain since 1999• Member of the Board of Directors of Rubicon Group Holding since 2006• General Partner and Chief Executive for a number of venture capital funds since 2005• Minister of ICT, Jordan (2000-2004) and Minister of Administrative Development (2003-2004)• Member of the Board of Directors of the King Abdullah II Fund for Development 2000-2002• Member of the Board of Directors of Princess Sumaya University for Technology 2005-2008• Member of the Board of Directors of Arab Jordan Investment Bank 2007-2008• Member of the Economic Consultative Council 1999-2000• Founding member of the Jordan Export Association, Jordan Quality Association, and the Jordan

Entrepreneurs Association 1985 1995

• Member of Young Presidents Organization and World Presidents Association 1991-2002

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Mr. Khalil Anis Khalil Nasrالجنسية أردنية

Nationality: Jordanian Board member since 18/1/2016 to present Head of the Board Audit CommitteeMember of the Board Risk Management CommitteeMember of the Board Nomination and Remuneration CommitteeDirector Status: A non-executive and independent memberDate of birth: 1953

Educational Certificates:• Bachelor of Arts/Business Administration 1976.• Masters/Finance 1997.

Professional Qualifications:• Vice Chairman, Palestine Investment Bank since 2011• Vice Chairman, Emmar Investments & Real Estate Development Company since 2011• Board Member, Masafat for Specialized Transport since 2011• Vice Chairman , Arab Center for Pharmaceutical & Chemical Industries since 2012• Chairman, Emmar Islamic Company for Leasing & Investment Since 2011-2017• Chairman, East Amman Company for Housing & Development since 2011• Board Member, Masafat Company for Touristic Car Rental since 2015• Board Member, Orthodox Educational Society since 2012 - 2018• Board Member, Association Of Banks in Jordan 2003-2006 & 2009-2010• Chairman of Al-Mawared for Brokerage 2008-2010• Chairman of Tamkeen for Financial Leasing 2008-2010• Chairman of IMDAD for Supply Chain 2008-2010• Board Member , Arab Center for Pharmaceutical & Chemical Industries Company 2008-2009

• Board member of the International Cards Company 2009

Also held the following banking positions:• CEO/General Manager, Investbank 2007-2010• Deputy CEO, Jordan Ahli Bank 1993-2007• Alternate Board Member, Jordan International Bank-London 2000-2007• Advisor to the Chairman, Ahli International Bank-Lebanon 2001-2007• Executive Manager, Bank of Jordan 1986-1993

• Credit Facilities Manager / Second Vice President, Chase Manhattan Bank NA – Jordan Branch 1976-1986

السيد عمر خالد رشيد آغا

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Mr. Omar Khaled Rasheed Agha

Nationality: Jordanian • Board member since 18/1/2016 to present • Head of the Board Nomination and Remuneration Committee• Member of the Board Corporate Governance Committee• Director Status: A non-executive and independent member• Date of birth: 1965

Educational Certificates:• Bachelor Degree in Civil Engineer 1991• Post graduate studies in Strategic Planning & Financial Management 2014

Professional Qualifications:• Board member of Societe General Bank Jordan (SBJ), member of Audit Committee 2016 – present• Group CEO - Abdali Investment and Development Company (Jordan) - 2016 - Present• Group CEO - Al Anwa Holding for Investments (KSA) 2015 - 2016• CEO / COO Saraya Holdings (UAE-Jordan) 2007 - 2015 • Executive Vice President, Arab Bank Group (Jordan) 2002-2007• Board Member, Saraya Aqaba for Real Estate Development Company (Jordan) (a $1.5B development

company) 2010 - 2015• Board Member, Saraya Bandar Jissah (Oman) (a $600MM real estate development company).

Chairman of Saraya Realty (exclusive real estate agent – Jordan/Dubai/Oman) 2008 - 2013• Executive Committee, member of the Audit Committee 2011-2015• Chairman of Saraya Realty (exclusive real estate agent – Jordan/Dubai/Oman) 2008 - 2013• Managing Director and Vice Chairman of Saraya Development Group (development management

company) 2007- 2011• Board Member, Iskandar Holdings (JV between governments of Abu Dhabi & Malaysia) 2009-2012• Board Member, Palestinian Telecommunication Company (PalTel) 2005 – 2007• Board Member, Arabella for IT Services / subsidiary of Arab Bank (UK) 2004 – 2007• Board Member, Arab Company for Shared Company (Dubai) 2006 - 2007• Fusion (IT services start-up Dubai/Jordan) Interim CEO 2005 – 2006• Board Member, Jordan Investment Telecommunication Co. (Jordan Telecom) 2004 – 2006

39

Mr. Nadim Alexandre Farid Abawatالمدير العام

General Manager

Date of Birth: 1973

Educational Certificates:• Master's Degree in Finance, 1999.• Ecole Superieure De Commerce De Paris, 1999. • Master's Degree in Economic Sciences, 1994.• Bachelor's Degree in Economic Sciences, 1993.

Professional Qualifications:Held the following positions within Société Générale De Banque au Liban Group:

- General Manager at Société Générale De Banque – Jordanie (SGBJ) since September 2011. - Deputy General Manager and Head of Corporate Division/ SGBJ, February 2011- September 2011.- Deputy General Manager and Head of Business Development Division/ SGBJ, April 2009- February 2011.- Head of Business Development Division/ SGBJ, 2007- April 2009.- Head of Corporate and Investment Banking Department/ SGBJ, 2004-2007.- Head of Business Development Division & Assistant Manager of SGBL Group/ SGBL, 2000-2004.- Employee at SGBL SAL, 1993-2000.• Chairman of SGBJ Leasing Company since 2017.• Chairman of Société Générale - Jordan Brokerage Company since 2007.• Member of the French Chamber of Commerce and Industry in Jordan (CAFRAJ) since 2013.• Member of Citibank Micro-entrepreneurship Awards Committee/ Jordan River Foundation since 2013.• Advisor to the Foreign Trade of France since 2013. • Member of the Young Presidents' Organization (YPO) since 2013.• President of the French Foreign Trade Advisors (CCEF), 2015. • Member of the Management Committee of INJAZ since 2013, and board member since 2016.

السيد رامي

طالل حسني

(3) B- Introduction to Senior Management

40 |

Mr. Rami Talal Husni Al Khuffashنائب المدير العام ومدير إدارة الشركات والخزين

Deputy General Manager and Head of Corporate and Treasury DivisionDate of Birth: 1974

Educational Certificates:• Bachelor Degree in Business administration, 1997.

Professional Qualifications:• Held the following positions at Societe Generale de Banque- Jordanie (SGBJ):

- Deputy General Manager since 2015.- Assistant General Manager as of September, 2011 and Head of Corporate and Treasury Division as of March 2012. - Head of Recovery & Supervision Division, since 2008. - Head of Risk Management Department, 2005-2007.- Head of Strategy and Marketing Department, 2005.- Assistant Head of Corporate and Investment Banking Department, 2001-2005.- Relationship Manager, Corporate and Investment Banking Department (Société Générale Group), 2000-2001.• Vice-Chairman of SGBJ Leasing Company since 2017.• Vice-Chairman of Societe Generale - Jordan Brokerage Company since 2007.• Credit and Marketing Officer, Corporate Banking Department/ ANZ GRINDLAYS BANK, 1999-2000.• Customer Support Officer, Corporate Banking Department/ ANZ GRINDLAYS BANK, 1998-1999.• Customer Service Advisor/ ANZ GRINDLAYS BANK, 1997-1998

41

Mr.Charbel Kamil Kabalan Kabalan

Head of Retail, Private Banking and Marketing Division

Date of Birth: 1966

Educational Certificates:• Master's Degree in Finance & Accounting, 1990.• Bachelor Degree in Commercial Sciences, 1985.• Higher Diploma Certificate in Banking & Finance, 1995.

Professional Qualifications:• Held the following positions within Societe Generale de Banque au Liban Group (SGBL):

- Head of Retail, Private Banking and Marketing Division of Société Générale De Banque- Jordanie since 2015.- Assistant Regional Manager at SGBL, 2011-2014.- Manager of the Antélias branch at SGBL, 2008 – 2010.- Assistant regional manager at SGBL, 2003-2008.- Manager of Baabda branch at SGBL, 1998-2003.- Assistant Manager of Baabda at SGBL, 1993-1998.- Teller, 1990 – 1993. • Board member of SGBJ Leasing Company since 2015.

Mr. Jad Hareth Naseeb El Howayek

Head of Support and Administration Domain

Date of Birth: 1979

Educational Certificates:• Executive MBA, 2009.• Financial Regulations Certificate, 2006.• Master’s in Business Administration (MBA), 2004.

• Bachelor Degree in Business Administration, 2001.

Professional Qualifications:Held the following positions within Société Générale de Banque au Liban Group:

- Head of Support and Administration Domain in Société Générale De Banque- Jordanie since January, 2017.- Head of Internal Audit Department of Société Générale De Banque- Jordanie, From 2009 until January, 2017.- Senior Internal Auditor/ Société Générale De Banque Au Liban, 2007-2009.- Internal Auditor/ Société Générale De Banque Au Liban, 2003-2007.

- Employee/ Société Générale De Banque Au Liban, 2000-2003.

42 |

Mr. Majdi Adli Mohammed Ajaj

Head of Back Offices, Reovery and Legal affairs DomainDate of Birth: 1979

Educational Certificates:• MBA Degree in finance and Banking Studies, University of Jordan and Institute of Banking Studies, 2007.• Bachelor Degree in Financial and Banking Studies, Amman Al – Ahlia University, 2003. • Diploma in Financial and Banking Studies, Institute of Banking Studies, 2001.• Certified Anti-Money Laundering Specialist (ACAMS), 2008. • Risk in financial services Certificate, 2010. • Operational Risk Certificate, (CISI) 2011.

Professional Qualifications:Held the following positions within Societe Generale de Banque - Jordanie (SGBJ):

- Head of Back Offices Reovery and Legal Affairs Domain since November 2017 until now.- Head of Permanent Control and Legal Affairs Domain, 2015- November 2017.- Recovery and Permanent Control Manager, from 2012 - 2015. - Compliance and Permanent Control Manager, 2008 – 2012. - Compliance and Operational Risk Manager, 2006 – 2008. • Responsible in Custody and Clearing Department, HSBC Bank, 2006.• Employee at Network Service Center, HSBC Bank, 2005 – 2006.• Employee at Treasury operation, Export and Finance Bank, 2004 – 2005.

• Employee at Commercial Services, Jordan Gulf Bank, 1999- 2004.

43

Mr. Marwan Simon Gerges BOU DIB

Head of Internal Audit Department

Date of birth: 1981

Educational Certificates:• Master’s Degree in Finance and Econometrics (Paris II University (Panthéon-Assas-la Sorbonne), 2005.• Master’s Degree in Banking and Finance (Paris XII University–E.S.A (École Supérieure des Affaires), 2004.• Bachelor of Science in Applied Economics : Banking and Finance (Paris IX University (Dauphine)), 2003.• Third Year University Diploma in Economics (Saint-Joseph University (USJ), Lebanon), 2002.

Professional Qualifications:• Head of Internal Audit department of Société Générale de Banque - Jordanie (SGBJ) since January 2017.• Head of Internal Audit department of Fidus SAL – Financial institution in the Group Société Générale

de Banques au Liban (SGBL) between May 2012 and December 2016.• Senior Internal auditor at Société Générale de Banques au Liban (SGBL) between April 2006 and

April 2012.• Employee at Société Générale France and HSBC France between April 2004 and January 2006.

Ms. Aghadeer Tawfiq Shaker Abu Goshا

Finance Manager Date of Birth: 1974

Educational Certificates:• Bachelor Degree in Accounting, 1996.

Professional Qualifications: Held the following positions in Société Générale de Banque - Jordanie (SGBJ):

- Finance Manager, since June 2014.- Responsible of the Budget Control Unit, 2004-2014.- Head of section in Finance Department, 2000-2004.- Employee in Finance Department, 1999-2000.- Client advisor,1998 - 1999.

• Board member of SGBJ Leasing Company, since 2017.

44 |

Mr. Aiman Kamal Metri Hijazin

Risk Department ManagerDate of birth: 1977

Educational Certificates:• MBA in Finance and Banking- University of Jordan/ IBS -Amman, Jordan, 2007.• B.A in Economics as a Major; Accounting as a Minor, Yarmouk University, 1999.• International Certificate in Banking Risks & Regulations (ICBRR) - GARP Institute, 2012.

• CAMS (Certified Anti-Money Laundering Specialist), 2008.

Professional Qualifications: Held the following positions in Société Générale de Banque - Jordanie (SGBJ):

- Risk Départements Manager, since 2012- Credit Risk Manager, May 2008 – March 2012.• Board member of SGBJ Leasing Company, since 2017.• Housing Bank for Trade & Finance, July 2001- May 2008:• Senior Credit Analyst/Special Lending.• Major Companies Relation Manager. • Customer Service Officer.

• April 1999-July 2001: Internal Auditor in the Cairo Amman Bank, April 1999- July 2001.

Mr. Suleiman Micheal Elias Aranki

Manager of Compliance and Permanent Control departmentDate of Birth: 1978

Educational Certificates:• Bachelor Degree in Business Administration, University of Jordan, 2000. • Certified Anti-Money Laundering Specialist (ACAMS), 2012.

Professional Qualifications:• Held the following positions in Société Générale De Banque- Jordanie:- Manager of Compliance and Permanent Control Department, since November 2017- Manager of Compliance & Permanent Supervision Department, 2011 - November 2017.- Team Member in Core Banking Project, 2009-2011. - Responsible of Database Supervisory Unit, 2007-2009.

• Employee at Inward & Outward Remittances/ trade finance services/ operations in HSBC Bank, 2000 – 2007

45

Mr.Feras Taiser Dakhlalah Taamreh

Human Resources ManagerDate of Birth : 1980

Educational Certificates:• Bachelor Degree in Accounting & Commercial law - Hashemite University ,2004.• International Diploma in Human Resources Management , Cambridge International College , 2010.• CHRM (Certified Human resources Manager ) , American Certification Institute , 2015.

Professional Qualifications:Held the following positions in Société Générale de Banque - Jordanie (SGBJ):

• Human resources Manager, since 2015.• Deputy Human resources Manager 2013-2015.• Head of Payroll and Personnel, 2008 -2013.

• Human Resources Officer in Société Générale De Banque- Jordanie 2004-2008.

Mrs. Rula Wajih Elias Khoury

Secretary of the Board of Directors Date of Birth: 1970

Educational Certificates:• Bachelor Degree in Business Administration 2011

Professional Qualifications:• Secretary of the Board of Directors/ GMOF, in Société Générale De Banque- Jordanie since 2016.• Corporate Affairs Consultant, June 2014 – February 2016.• Directors of Corporate and Legal Affairs, January 2005 – January 2014.• Secretary of the Board of Directors / Accelerator Technology Holdings, January 2005 – January 2014.• Corporate Assistant to the Minister of ICT, January 2004 – December 2004.• Trademarks Manager / Nuqul Group, March 1997 – December 2003.

46 |

Mr.Mahmoud Khalil Ibrahim Alsouri

Acting Manager of Legal Affairs DepartmentDate of Birth: 1977

Educational Certificates:• Bachelor Degree in Law, 2000.

Professional Qualifications:• Acting Manager of Legal Affairs Department in Société Générale De Banque- Jordanie, 2012.• Lawyer and legal advisor in Alwasel International Group for Attorneys and legal advice- Middle East,

from June 2007 – November 2012.• Lawyer in Attorney’s International Office, from 2005 – 2007.

• Trainee/ Jordanian Bar Association, 2001 - 2004.

Mr.Saleh Abdul Wahab Saleh Khurma(Resigned in 30/9/2017)

Head of Back Offices Domain Date of Birth: 1956

Educational Certificates:• Diploma in Banking Studies, 1982

Professional Qualifications:• Head of Back Offices Domain since 2010.• Manager of Centralized operations Department of Société Générale De Banque- Jordanie since 1993. • In charge of L/CS, DBCS, transfers and L/GS in National Islamic Bank, 1983 -1993.• In charge of L/CS, DBCS, transfers and L/GS in Jordan Islamic Bank, 1980 – 1983. • Employee in bills and L/CS departments in Jordan – Gulf Bank, 1979 – 1980.

• Employee at L/CS department in Cairo Amman Bank, 1976 – 1979.

47

Mr.Maurice Elia Sleiman Karam(Resigned in 6/1/2017)

Head of Support and Administration DomainDate of Birth: 1969

Educational Certificates:• Master’s Degree in Business Administration, 2002.

• Bachelor Degree in Business Computer Science, 1993.

Professional Qualifications:• Head of Support and Administration Domain in Société Générale De Banque- Jordanie since 2010. • Held the following positions within Société Générale de Banque au Liban Group 1993 - 2010:- Information Technology: security, business continuity, disaster recovery, networking, technical studies, Incident Management, operations, operating system, database, Hotline and ETL tools.- Banking: banking application migration, banking knowledge, Bancassurance and cards system. - Managerial: setting up departments, managing teams, procedure implementation, budgeting, RFI, RFP, consultancy, user requests and project management.

48 |

Shareholders who own 5% and more from the CapitalNAME 31/DEC/2016 Shareholding

percentage 31/DEC/2017 Shareholdingpercentage

Messers Société Générale De Banque Au Liban 87,664,679 87,6647% 87,664,679 87.6647%

Shareholder who own 1% from the Capital as of 31/DEC/2017

Names Nationality Share number MortgagedShares

ShareholdingPercentage

ShareholdingPercentage

Société Générale De Banque Au Liban Lebanese 87,664,679 1,000 0 87.6647%Al Hanan for investment Jordanian 4,766,024 0 0 4.766%

Dr. Ahmed Ibrahim Khalil Mango Jordanian 2,023,377 1,000 0 2.0234%Tamam Hassan Hamdi Mango Jordanian 1,040,909 0 0 1.0409%

Ghalyah Hassan Hamdi Mango Jordanian 1,040,910 0 0 1.0409%

pledged shares for the purposes of membership board of Directors

Ultimate Beneficial OwnersFirst: Société Générale De Banque Au Liban shareholder

7. Ishac Mazen Hanna8. NSKINV Ltd9. Jean -Pierre Ducroquet10. Societe Generale - France 11. Jean - Louis Mattei12. GREGOIRE LEFEBVRE

1. Nabil Nicolas Sehnaoui 2. Antoun Nabil Nicolas Sehnaoui 3. Pierre Frederic Kamel 4. Kafinvest Holding Lebanon SAL 5. Holding APY Sehnaoui SAL 6. Nagib El SaadSecond: Al Hanan for investment ShareholderThe company owned by MANGO cultural Foundation ( Liechtenstein Nationality ) based on Switzerland which

1. Omar Ibrahim Mango

2. Adnan Ibrahim MangoThird: Dr. Ahmed Ibrahim Khalil Mango

Fourth: Tamam Hassan Hamdi Mango

Fifth: Ghalyah Hassan Hamdi Mango

(4) MAIN Shareholders AND NUMBER OF SHARES FOR EACH ONE OF THEM IN COMPARISON WITH THE YEAR 2016.

49

of total assets %of total deposits and margin accounts %of total direct credit Facilities %

2.81%3.33%2.72%

The bank launched many competitive products and campaigns during 2017:• SGBJ launched a marketing campaign for “Evolution2” product; certificates of deposit in JOD and

USD with special features.• With the aim of promoting the expatriate loans (Sogehome and Sogeland), SGBJ launched a marketing

campaign to encourage expatriates to own a house or a piece of land in Jordan with competitive rates, where the campaign was under the title” Guarantee a bright future for your children by investing in your own country”.

• There is no dependency on selected suppliers or main clients locally and globally representing 10 % or

• higher from gross purchases and/ or gross sales.

• There is no governmental support or privileges granted for SGBJ or any of its products in accordance• with laws and systems or others.• There are no patent rights or franchise rights obtained by the bank.

• No decisions were issued by the government, International organizations etc… that has a material• effect on SGBJ’s work or any of its products or competitiveness.

• International quality standards are not applied on the bank.

5) SGBJ’S SHARE IN COMPARISON WITH OTHER BANKS IN JORDAN

6) EXTENT OF Dependency ON SELECTED SUPPLIERS OR MAIN CLI-ENTS LOCALLY AND GLOBALLY.

(7) GOVERNMENTAL SUPPORT OR PRIVILEGES GRANTED FOR SGBJ ORANY OF ITS PRODUCTS IN ACCORDANCE WITH LAWS AND SYSTEMSOR OTHERS

(8) Decisions TAKEN BY THE GOVERNMENT OR INTERNATIONAL OR-GANIZATIONS OR OTHERS WHICH HAVE FINANCIAL IMPACT ON THE BANK’S BUSINESS OR PRODUCTS OR COMPETITIVE ABILITY.

50 |

(9) A

-SG

BJ O

RGAN

IZAT

ION

AL C

HAR

T

51

Tawjihi and BelowDiplomaBSc. MSc Academic Degree

18913213Males

412827Females222121420

Remuneration Policy:Remuneration policy is designed to attract, retain and reward talented staff and managers by offering a motivational compensation that is linked to employee’s performance and strengthens the Bank’s performance and competitiveness.The performance of employees is assessed through Annual Appraisal & Development interviews which uses measurable Key Performance Indicators (KPI’s) that are linked to the job requirement of each employee and to our global targets and vision in a competitive and motivational manner. The purpose of having those remuneration components is to boost everyone’s productivity and efficiency within an effective framework in order to enhance the bank’s performance, competitiveness, reputation and solvency based on the foundations of transparency, objectivity and justice and with respect to all Jordanian laws and regulations.

In order to prepare employees to perform well and provide quality services in hand with guaranteeing the continuous development of employees and managers, Human Resources Department develops an annual training and development plan in coordination with managers and staff that anticipates the development of the bank and supports the necessary changes.

Since growth and change are inherent our training plan covers all necessary trainings that an individual employee needs not only to develop their skills but to promote the overall excellence of the bank and the individual through the development of both technical and behavioral skills.

We empower employees with on job trainings, internal, external, international trainings and professional certifications to ensure the concept of learning organization. Our trainings support employees and ensure that the skills and knowledge of staff meet the needs of the group’s activities and businesses as our goal is to ensure the development of the bank by helping employees having a more effective response to organizational changes.

(9) B-EDUCATIONAL DISTRIBUTION

(9) c- Training Activities:

52 |

LocationParticipantsCourse NameTypeSGBJ Training Center31Audit Pro MonitoringInternal

29Easy Vista System622e-learning100Induction Programs29Orientation Programs7Go AML1ICBS Banking system5T24 Induction Program

53Credit Analysis16On the Job training at Credit Back Office department41Legal Aspects related to bank Cheques

6 Legal aspects related to bank Cheques and updating some data in the bankingsystem

43Advanced customer service and Selling Skills25Introduction to Jordan Loan Guarantee Corporation5Social Security Training

45Operations Risk, BCP27Operations Risk, BCP and Narval Training45Retail Policy and New Authorities

233Security awareness training44Optimizing the database of the reports sent to CBJ11Cards Training1Transfers Training

41Kinz Training21The Empowered Leadership Program42Customer Service for people with special needs43Customer Service and Product knowledge Refresher16French Course5Advanced Excel Training

84CRIF Training89Fraud detection and counterfeiting26Introduction to financial analysis and credit risk

112AML, CTF, FATCA, Whistle Blowing, Code of Conduct25Advanced Communication and Selling Skills28Communication Skills and Selling Techniques23Selling and Communication Skills with Customer Care Focus Training

LocationParticipantsCourse NameTypeTraining Centers in Amman

1 Workshop on developing agreement form for energy projects implementationagreement and management of energy consumptionLocal

1SMES Legal Awareness Workshop1Rethink your security blueprint workshop

10CRIF Workshop1Software testing Workshop1SWIFT Workshop1Hedging techniques workshop4JLGC Programs Workshop2Swift Security Workshop

TRAINING ACTIVITIES

53

1COBIT 5 Foundation7Office Control System / Individual data System2Electronic booking system1Time Management2Self assessment on anti money laundry and fraud financing1Guarantees and facilities for members of the engineering business forum1 Property Law Discussion 20151Introduction to Basel III1Internal Auditor Standards According to the Updated Version of IIA 20171Corporate Regulations Project2Instructions on anti-money laundering and counter terrorist financing1Accelerating the growth of small and medium enterprises project1Certified Information Systems Auditor3Liquidity requirements under Basel III1Dealing with cash transactions1Detection of documents and signatures counterfeit1Fraud detection and bank counterfeiting4Syndicated Loans1Ring the Bell for Gender Equality1Jordanian labor law1Social security law, labor law and income Tax law1The art of communication and dealing with others1Certified Business Analysis Professional1ICA Intl Advanced Certificate in Compliance1Board of Directors Certification Program1Certified Anti-Money Laundering Specialist (CAMS)1Corporate secretaries training program3Introduction of TOT1Compliance, anti money laundering and terrorism financing

35English Courses3Role of Economic Development Arab Fund in supporting the SMEs sector3Social Security e-fawateercom payments1Advanced Feasibility study1SMES Governance2Problem Solving and Decision Making1Launching of the new clearing and settlement cycle1Social Security Amendments discussion session1A panel discussion on facilitating the financing for leading companies1Introduction session on the project funded by USAID and OPIC7Developing Managerial Skills1Developing the executive secretaries and office managers skills1Soft Skills For Excellence1Solar Projects Financing1Information Technology in the banking sector

2Evaluation of internal control systems according to COSO concept and risk-based auditing

2Customer Service and selling skills

4 Governance instructions and its accompanying information technologymanagement

1Instructions on adaptation with cyber risks for banks and financial institutions4 CBJ instructions of important systematic banks

TRAINING ACTIVITIES

54 |

2Stress Testing Instructions for Banks in Jordan1Filling AML Surveys

1 Developing and Upgrading Anti-Money Laundering and Combating theFinancing of Terrorism AML/CFT

2Development of Credit Guarantee System in Jordan2Network Payments: Taking ePayments forward for a better tomorrow1Stress Testing2Organizational Structure, Design & Job Description training1Experience the Power of True Next Generation Security1Commercial Credit Risk Insurance1Fundamentals of Human Resources2Business Process Reengineering1Managing and documenting banking contracts and credit implementation1IT Risk Management1Management of procurement, warehouses and logistics contracts1Enterprise Risk Management2Most important legal points relating to the Mandate form in the ACH project1Deposits and banking services2Effective Supervisory Skills1Arab Third Forum for Renewable Energy

1 Anti-Money Laundering, Counter Terrorism Financing & Tax Evasion AnnualForum

2Financial Instruments (9) IFRS1Effective knowledge, skills and tools for new auditors3Business Writing Skills1Bank Guarantees1The Art and Science of Talent Acquisition

1 Opportunities and challenges facing the development of the renewable energysector in Jordan

1Internal banking operations1Cryptocurrencies and Bitcoin and their impact on the economy2Occupational health and safety4Training of Trainers TOT3Electronic connection between the Ministry of Finance and banks1Bad debts management and ways of collection1SMES Diploma2Next Generation IT Security1E-communication between business empowerment and Banks2Excellence in Customer Service and selling techniques2Excellence in Customer Service2Banking Finance and Credit Risk Analysis1Strategic Thinking for Business Results using Simulation1CBJ Instructions on financing individuals and SMES

1Instructions issued by CBJ on dealing with customer complaints relating to finan-cial and banking services providers

2New Implementation of IFRS 92Advanced Content Marketing by Neil Patel1Business Credit facilities from a legal point of view1Training module - MenaHR1Basic and technical analysis for forecasting financial markets movements3Fundamental Analysis3International Trade5Leasing Training4Data related to sales channels and tools1Cards and e-banking services1Green Financing in Jordan

55

1Letters of Credit and Incoterms1Compliance, anti money laundering and terrorism financing1The procedure of Jordanian banks in collecting and delivering stamps fees1LCs for marine insurance1Questionnaire on Sector Survey perception1Smart Recruitment & Selection4Launch of Beyond Capital2Strategies on how to maintain and win new customers2Utilizing Emotional Intelligence for Effective Leadership4Office control system / customers card system Meeting2Meeting with Investment Organization1General Assembly Meeting for SDC1 Meeting to discuss the counterfeit cash in payments deposited through ATMs2Jordan Loan Guarantee Corporation Meeting1Wolves of Amman Executive Workshop

4MS Project3ITIL Foundation1Corporate Governance2CISCO Networks Workshop2IFRS9 Workshop2The new City Business Case for Public Engagement

LocationParticipantsCourse NameType

International

France1CCEF & economic services south-Mediterranean - money orientLebanon1Cisco Live EventLebanon3IFRS9 - LIC Training

France1Support and Administration OrientationLebanon1Meeting at SG ParisLebanon7Leasing On-the-Job TrainingLebanon1Mobile BankingLebanon1Operational Risk TrainingLebanon1Risk analysis of the leasing filesLebanon1Animation and Call Center General Overview at SGBLLebanon1Leasing Training at SGBL

Abu Dhabi1CSC Lebanon VisitLebanon1Second Market Participants Forum on the Arab Regional Payment System ProjectGermany1AML and T24Lebanon1Global view of RISK Department at SGBL

• Credit Risk• Credit Risk• Operational Risk• Market Risk• Interest Rate Risk• Liquidity Risk• Non-compliance RiskNoting that the bank does not expect to face any substantial effect during the coming year.

10) Risks encountered by the bank:

56 |

• Total assets reached 1,352 billion JD, as increased at end of 2017 by JD 48.9 million compared to year 2016 with a growth of 3.8%.

• Direct credit facilities increased at end of year 2017 by JD 82.4 million compared to 2016 with a growth of 14.5%.

• Customers’ deposits and margin accounts reached 1,17 billion JD, as increased at end of 2017 by JD 81.3 million compared to year 2016 with a growth of 7.5%.

• The bank distributed cash dividends to the shareholders for year 2016 with total amount of 7 million JOD represents 7% of its paid in capital .

• Total liabilities reached 1.218 billion JD attend of 2017, Increased by JD 48.2 million compared to year 2016 with a growth of 4.1%.

• Total equity increased by 0.5% compared to the previous year.

Bank’s achievements in other fields: • SGBJ signed a financing agreement with Ministry of Energy and Mineral Resources/

Renewable Energy and Energy Saving Fund with the aim of supporting renewable energy various programs implemented by the Fund, including individuals as well as SME’s , especially industrial and tourism fields as well as governmental institutions with the support of the Central Bank of Jordan.

• The bank was awarded “Innovation and Excellence Award in Customer Service” by the Union of Arab Banks.

• SGBJ organized, in collaboration with Societe Generale Bank and Trust Luxembourg, a conference under the theme ” The Bigger Picture” which was presented by Chief Economist - Strategist of Societe Generale Private Banking, Mr. Xavier Denis.

• SGBJ organized a joint event with Ayla Company which took place at the bank’s Head Office where selective existing and potential clients were invited. A reception was held with the aim of reinforcing the partnership between the two parties through a cooperation agreement which will give clients the opportunity to purchase residential units at Ayla project through financing programs with preferential rates and facilitated conditions.

• SGBJ launched a marketing campaign for “Evolution2” product; certificates of deposit in JOD and USD with special features.

• SGBJ signed an agreement with The Jordanian French Insurance Company (JOFICO) for bancassurance.

• SGBJ announced the winners’ names in the prizes of Ghena saving account; gold lires daily, JOD 5,000 monthly, Mercedes-Benz E200/2017 and JOD 100,000.

• SGBJ signed an agreement with Sawt Al Ghad for renewing the partnership for 3 years for sponsoring the daily morning show.

• Periodic draws were held during 2017 for Fawzi Fawri clients, whereby there were a number of winners who won the prize of doubling their account balance by 100% or 200% depending on the holding period, as well as the winners of the 3 grand prizes of JOD 7,500 each.

• With the aim of promoting the expatriate loans (Sogehome and Sogeland), SGBJ launched a marketing campaign to encourage expatriates to own a house or a piece of land in Jordan with competitive rates, where the campaign was under the title” Guarantee a bright future for your children by investing in your own country”.

• As part of the marketing plan for the kids’ saving account “Swing”, representatives

11) THE BANK’S ACHIEVEMENTS DURING THE FINANCIAL YEAR (SUMMARY OF THE COMPANY’S PERFORMANCE FOR THE LAST FISCAL YEAR)

57

from SGBJ branches visited a number of educational institutions covering different areas of the Kingdom with the aim of raising awareness about this product and distributing relevant flyers and giveaways.

• In line with the bank’s policy aiming at developing the human resources to excel at the level of offered services, SGBJ held a number of workshops and training programs inside and outside Jordan during 2017, with a focus on customer service and the quality of the services offered.

• SGBJ cooperated with GAA Jordan, VOLVO car agents in Jordan, for financing the purchase of XC60 and S60 cars with facilitated conditions.

• As part of the strategic partnership with AZADEA Group, SGBJ participated in their annual event by partially contributing in purchasing SUZUKI 2017 car, whereby a draw took place during the annual party which was held at the company’s Head Office.

• SGBJ held its employees’ annual party at the Four Seasons Hotel Amman, whereby the 2018 future plan was overviewed. The party focused on the group’s four values: Responsibility, Team Spirit, Innovation and Commitment and trophies were handed to the winners based on the set criteria.

• In line with its expansion strategy aiming at getting close to its customers, SGBJ inaugurated its Zarqa branch in its new location in Saadeh Street/ Istatieh Building next to Electricity Company.

There is no financial impact of transactions with non-recurring nature which took place during the financial year and are not included in the bank’s main activity.

20132014201520162017Years

7,001,6209,200,99210,009,22610,908,0357,810,209Achieved profits (losses)

--4,000,0005,000,0007,000,000Cash Dividends112,313,060121,517,802127,587,028133,440,813134,092,021Net Equities

0.891.071.010.951.10 Closed share price

12) FINANCIAL IMPACT OF TRANSACTIONS WITH NONRECURRING NATURE WHICH TOOK PLACE DURING THE FINANCIAL YEAR AND ARE NOT INCLUDED IN THE BANK’S MAIN ACTIVITY:

13) PERIODIC CRITERIA OF ACHIEVED PROFITS, THE CASH DIVIDENDS, NET EQUITIES AND SHARE PRICE FOR THE PREVIOUS FIVE YEARS:

Net income

Cash Dividend

Net Equity

58 |

• Financial position1. Direct credit facilities (Net)

*Direct credit facilities increased at end of year 2017 by JD 82.4 million compared to 2016

with a growth of 14.5%

2. Total assets* Total assets increased at end of 2017 to 1.352 billion dinars by JD 48.9 million compared to year 2016 with a growth of 3.8%.

(14) FINANCIAL ANALYSIS OF FINANCIAL POSITION ANDTHE BUSINESS RESULTS OF THE YEAR

Direct credit facilities

Total assets

59

3. Customers’ Deposits and Margin accountsCustomers’ deposits and margin accounts increased at end of 2017 to 1.17 billion dinars by JD 81.3 million compared to year 2016 with a growth of 7.5%

4.Total liabilities* Total liabilities reached 1.218 billion JD at end of 2017, as increased by JD 48.2 million compared to year 2016 with a growth of 4.1%.

5.Total EquityTotal equity increased at end of 2017 with a growth of 0.5% compared to year 2016.

Customers’ deposits and margin accounts

Customers’ deposits and margin accounts

Total equity

60 |

Business ResultsNet interest and commission incomeNet interest and commission income decreased by 9.6% during year 2017 compared to year 2016.

Gross IncomeGross income decrease at the end of year 2017 by 12.9% compared to year 2016.

Profit for the year ( before Income Tax)The profit before tax for year 2017 decreased by 28.4% compared to year 2016.

Net interest and commission income

Gross income

Profit for the year

61

The below table shows the major financial ratios for the year 2017 compared to year 2016

20162017Financial ratioNo

0.87%0.59%Return on assets1

8.72%6.01%Return on equity222,61%19.39%Capital adequacy3

43%53%Total expenses / Gross Income4147%118%Legal Liquidity ratio5

A REPORT ON THE BANK’S SHARES Traded DURING 2017

Numberof trans

Number of Shares

Value traded JD

in 2017

AVG Price in

2017

Lowest Price in

2017

High Price in 2017

MarketCodeCompany

108400,131434,950.291,090,961.151SGBJ Societe Generale DeBanque – jordanie

(15) Important future developments and the bank’s future planThe bank will continue to implement its strategy and achieve its goals aiming at reinforcing its fi-nancial position for the year 2018; additionally SGBJ will be keen on excelling in offering the prod-ucts and services that suit the various needs of existing clients as well as attracting new clients according to the vision of Societe Generale Group through:

• Developing the quality level of the offered products and services as well as offering new prod-ucts to cope with the market changes.

• Reinforcing the bank’s geographical presence through opening new branches and renovating the old ones.

• Achieving higher growth rates in the main banking activities more than the previous years.

• The bank will work to reduce the percentage of non-performing debts and developing the quality of the credit portfolio with continuing to focus on the retail, corporate and net worth management.

• Developing employees’ skills through continuous internal and external training plans which help in increasing efficiency levels at work.

• Contributing more in the local community activities and cultural events as well as sports and economic various activities.

Board of Directors' Predictions for the Results of the Company

In view of the Bank's future vision of developing the level of banking services and products it offers, and increasing its market share by focusing on the retail, corporate and SME sectors, the Bank seeks to achieve growth in total assets and growth in net credit facilities in 2018. Total customer deposits, with a focus on managing the sources and uses of funds more efficiently in order to maximize the profit margin taking into account the risk ratio.

16) SGBJ AND AFFILIATED COMPANY’S AUDIT FEES AMOUNT AND ANY FEES FOR OTHER SERVICES RECEIVED BY THE AUDITOR AND OR ANY OTHER INCURRED AMOUNTSThe bank’s audit fees amounted to 140,940 JOD whereas they amounted to 4,900 JOD forthe affiliated company noting that no fees were paid for the external auditor or any other.

62 |

17) NUMBER OF SECURITIES OWNED BY THE CHAIRMAN AND MEMBERS OF THE BOARD OF DIRECTORS:

Shareholdingpercentage

31/12/2017 Shareholding

percentage31/12/2016NationalityTitlesBoard Member as of

31/12/2017

87,6647%87,664,67987,6647%87,664,679LebaneseChairmanMessers Société Générale De Banque Au Liban/ Represented by Mr. Hassan Hamdi Khalil Mango*

2,0234%2,023,3772,0234%2,023,377JordanianMember Dr. Ahmed Ibrahim Khalil Mango

0,0020%1,9850,0020%1,985LebaneseViceMessers Sogelease Liban/ Represented by Mr. Antoun Nabil Nicolas Sehnaoui**

0,0050%5,0000,0050%5,000Jordanian Member Mr.Khalil Anise Khalil Nasr

0,0010%1,0000,0010%1,000JordanianMember Mr. Fawaz Hatim Sharif Zu’bi

0,0010%1,0000,0010%1,000Jordanian Member Mr. Mufleh Mohammad Awad Akel

0,0013%1,3230,0013%1,323FrenchMember Mr. Gérard Albert Goulven Garzuel

0,0013%1,3230,0013%1,323LebaneseMember Messers Sogecap Liban/ Represented by Miss Noha Espiridon Khalil Abou Saad ***

0,0013%1,3230,0013%1,323Lebanese Member Mr. Georges Elie Georges Saghbini

0,0010%1,0000,0010%1,000FrenchMember Mr. PHILIPPE JOSEPH BERNARD DUBOIS

0,0010%1,0000,0010%1,000French Member Mr. GREGOIRE YVES MARIE LEFEBVRE

0,0010%1,0000,0010%1,000Jordanian Member Mr. Omar Khalid Rashid Agha

Shareholding

Percentage31/12/2017

Shareholding

Percentage31/12/2016

Board

Member's nameNames

0,0000%00,0030%2,896 Messers Société Générale De

Banque Au Liban

Mr. Hassan * Hamdi Khalil

Mango0,0020%1,9850,0020%1,985 Messers Sogelease

Liban Mr. Antoun ** Nabil Nicolas

Sehnaoui0,0000%00,0000%0 Messers Sogelease

Liban Miss Noha***

Espiridon KhalilAbou Saad

Board Members, Relatives, Shares Shareholding"

"Percentage31/Dec/2017 Shareholding""Percentage31/Dec/2016Board

Member's nameRelationNames

0,6487%648,7350,6487%648,735Dr. Ahmad IbrahimMango Wife Mrs. Dorothy Margarita

Arikson / Jordanian

0,0000%00,2838%283,768 Mr. Hassan Hamdi KhalilMangoWife

Mrs. Samya Momtaz Abd Al Raheem AlSoloh / Jordanian

63

NUMBER OF SECURITIES OWNED BY senior management and their relatives

Shareholding""Percentage31/Dec/2017 Shareholding"

"Percentage31/Dec/2016Titles Names

0.0013%1,3230.0013%1,323 General Manager Mr. Nadim Alexandre

Farid Abawat /Lebanese

0.0000%00.0000%0

Deputy General Manager and Head of Corporate & Treasury

Division

Rami Talal Husni AlKhuffash / Jordanian

0.0000%00.0000%0Head of Back Offices,

Reovery and Legal affairs Domain

Majdi Adli Mohd Ajaj /Jordanian

0.0000%00.0000%0

Manager of compliance &

Permanent Control Department

Suleiman Michel Elias Aranki / Jordanian

0.0000%00.0000%0 Head of Support

and AdministrationDomain

Jad Hareth Naseeb ElHowayek / Lebanese

0.0000%00.0000%0Finance Manager Aghadeer Tawfeek

Shaker Abu Ghosh /Jordanian

0.0000%00.0000%0 Risk DepartmentManager

Aiman Kamel MetriHijazin / Jordanian

0.0000%00.0000%0 Head of the AudiDepartment

Marwan Simon BouDib / Lebanese

0.0000%00.0000%0 Head of Retail

,Private Banking &Marketing Division

Charbel Kamal Kabalan/ Lebanese

0.0000%00.0000%0 Acting Manager of Legal Affairs

Department

Mahmoud Khalil Ibrahim Al souri /

Jordanian

0.0000%00.0000%0 Human ResourcesManager

Feras Taiser DakhlalahTaamreh / Jordanian

0.0000%00.0000%0 Responsible forResearch and Studies

Heba Marwan IbrahimAllaf / Jordanian

0.0000%00.0000%0 Secretary of theBoard of Directors

Rula Wajih Elias Khoury/ Jordanian

There are no shares owned by high managements' relatives .* The bank has no shares for companies controlled by board members or any of their relatives except the following :

Shareholding""Percentage31/Dec/2017 Shareholding"

"Percentage31/Dec/2016Names

4.766%4,766,0244.7551% 4,755,139 Al Hanan for investment (controlled by Ahmed

(Ibrahim Khalil Mango,Hassan Hamdi Khalil Mango

0.5185%518,4810.5185%518,481

Hamdy and Ibrahim (controlled by Ahmed Ibrahim" Khalil Mango,Hassan Hamdi Khalil Mango) Mango

"Company

The bank has no shares for companies controlled by other Jordanian Banks.

There are no companies controlled by senior management or any of their relatives.

64 |

TotalIndirectDirectClient/Group

439,100439,100Societe Generale Bank - Lebanon

64,10064,100Fawwaz Hatem Sharif Al-Zu'bi

271,600271,600Omar Khalid Rasheed Agha

Hassan Mango Group:

10,00010,000Hassan Hamdi Mango 198,100198,100Jordan Construction Materials Co.

20,30020,300Middle East Regional Development Enterprises

12,00012,000Alia Kamal Hamdi Mango

4,322,3003004,322,000Tamam Hassan Mango and Ghalia Hassan Mango

00Suzan Kamal Hamdi Mango

721,400721,400Suzan Kamal Hamdi Mango & Saif Al-Dein Mohammad Saif Al-Dein Taher

129,800129,800Aiman Jawad Jawdat Al-Azah11,60010,3001,300Hamdi & Ibrahim Mango Co.*

9,0009,000Hassan Hamdi Mango &/or Samia Mumtaz Al-Soloh

5,434,50040,9005,393,600TotalAhmad Mango Group:

808,4007,000801,400Istikbal Investment Co.

22,90022,900 Ameenah Ahmad Mango18,40018,400Hussien Ahmad Mango

240,100240,000100Omar Ibrahim Khalil Mango11,60010,3001,300Hamdi & Ibrahim Mango Co.*5,2002,0003,200Faisal Shaher Ahmad Al-Tabbaa'

500500Hend Ibrahim Khalil Mango

5,5005,500Hamza Ahmad Ibrahim Mango

1,112,600259,800852,800TotalKhalil Anees Nasr Group

496,900496,900Khalil Anees Khalil Nasr

225,800225,800Muna Jac George Khayyat

722,7000722,700Total* Hamdi & Ibrahim Mango Co. were added to Ahmad Mango's Group given that Mr. Ahmad Mango is an authourized signatory

Credit Facilities (Direct / Indirect) Granted to Board Members

65

Credit Facilities

(18) CHAIRMAN AND BOARD’S PREMIUMS AND BENEFITSDURING YEAR 2017

Total

Benefits Yearly

PremiumsYearly

TransportationAllowance

Date of joiningPositionName

56,16353,763 2,400 31/10/1999 Chairman SGBL Presented by Mr. HassanHamdi Khalil Mango1

4,5432,143 2,400 31/10/1999 Deputy ChairmanMessers Sogelease Liban

presented by: Mr. Antoun Nabil Nicolas Sehnaoui

2

5,971 3,571 2,400 28/4/2010 Member of boardSogecap-Liban presented by

Miss.Noha Espiridon Khalil Saad

3

3,8291,429 2,400 24/4/2013Member of boardMr. Gérard Albert Goulven Garzuel4

4,5432,143 2,400 23/9/2014Member of board Mr. GREGOIRE YVES MARIELEFEBVRE5

5,9713,571 2,400 31/10/1999Member of boardDr. Ahmad Ibrahim Khalil Mango614,2864,28610,000 23/4/2014Member of boardMr. Mufleh Mohammad Awad Akel75,9713,5712,400 26/7/2011 Member of boardMr. Georges Elie Georges saghbini8

3,8291,4292,400 18/12/2014Member of board Mr. PHILIPPE JOSEPH BERNARD DUBOIS9

14,286 4,28610,00018/01/2016Member of boardMr. Omar Khaled Rasheed Agha1015,0005,00010,00018/01/2016Member of boardMr. Khalil Anis Khalil Nasr1114,2864,28610,00018/01/2016Member of boardDr. Fawaz Hatim Sharif Zau'bi12

148,67889,47859,200 Total

66 |

EXECUTIVE MANAGEMENT PREMIUMS AND BENEFITS DURING YEAR 2017 Total Yearly

Benefits Other

Benefits Yearly Traveling

Expenses Yearly

Premiums

Yearly Transportation

Allowance

Total YearlySalary

PositionName

276,123- - -276,123General Manager Nadim AlexandreFarid Abawat

1

158,600 19,400 139,200 Deputy General Manager and Head of Corporate

and Treasury Division

Rami Talal HusniAlkhuffash

2

130,777-14,180 -116,597 Head of Retail, Private Banking and Marketing

Division

Charbel Kamil Kabalan Kabalan

3

18,803 17,725 -1,078Head of Support and Administration Domain

06/01/2017

Maurice EleyaSulaiman karam

4

44,886 3,500 41,386 Head of Back Offices Domain until

30/09/2017

Saleh abdalwahabSaleh Khurma

5

79,925 24013,000 66,685 Head of Back Offices, Reovery and Legal

affairs Domain

Mr. Majdi AdliMohammed Ajaj

6

125,991-10,635 115,356 Head of Support andAdministration Domain

Jad Hareth NasibHowayak

7

50,7602407,000 43,520Finance Manager Aghadeer TawfeekShaker Abu ghosh

8

48,621 2406,400 41,981 Risk DepartmentManager

Aiman Kamal Metri Hijazin

9

29,966 29,966 Secretary of the BoardDirectors

Rula Wajih EliasKhoury

10

82,008 - 82,008 Head of Internal AuditDepartment

Marwan SimonBou Dib

11

36,9842404,23032,514 Head of Recovery andPermanent Supervision

Suleiman Michel EliasAranki

12

34,890 2404,500 30,150 Human ResourcesManager

Feras TaiserDakhlalah Taamreh

13

20,079971,750 18,232Bank's Internal Lawyer Mahmoud Khalil Ibrahim Alsouri

14

1,138,4131,297102,3201,034,796Total

Tangible BenefitsHousing + CarGeneral Manager

Housing Head of Retail and Marketing and Private Banking HousingHead of Support and Administration HousingHead of Internal Audit

67

(19) GRANTS AND DONATIONS PAID THROUGH THE YEAR 2017

التبرعات التي دفعها البنكAmount in JOD Name of Benefited Association

15,000 Support fund for families of martyrs of the armed Forces

30,259Jordanian Hashemite fund for human development

7,090Initiative for air conditioning in public schools in Jordan Valley

52,349Total

There were no Contracts, projects and binds signed by the bank with affiliated companies, chairman, board members, General Manager, or any of the bank’s employees or relatives.

As a result of SGBJ’s belief that corporate social responsibility plays a vital role in improving the community, the bank continuously assures that it continues its contributions to different causes and• Foundations in different industries and activities that aim to improve the community:

SGBJ offered 50 children from SOS Villages/ Amman the chance to watch “Snow White on Ice” which was organized by Friends of Jordan Festivals and took place at the Cultural Palace which aimed at spreading joy among those children.

• SGBJ renewed its partnership with Tkiyet Um Ali for the fourth consecutive year with the aim of sponsoring its activities and programs, whereby the bank supported eleven families who live under the poverty line through offering them monthly food packages for one year.

• SGBJ sponsored the renovation of the Media Library of Institut Francais, as part of its con-tinuous support for the Institut.

• For the 9th consecutive year, SGBJ sponsored “Les Créateurs Libanais” in the presence of a number of Jordanian artists , whereby the bank was present through a booth and offered the exhibition’s visitors the chance to purchase using VISA, MasterCard and AMEX cards in addition to displaying flyers about the bank’s various products and services .

• SGBJ sponsored “The Image Festival” in cooperation with Institut Francais.• SGBJ participated in sponsoring the charity dinner organized by Mar Charbel Center,

whereby the dinner’s proceeds were directed for establishing a cooling and heating system inside the church as well as building a wall around the church.

• SGBJ supported CIIN Magazine Movember campaign for raising awareness for Prostate Cancer, whereby supporting men release their mustaches during the month of November; around thirty Arab celebrities from both genders took pictures wearing fake mustaches as an expression of supporting this noble cause; their pictures were communicated on the different social media platforms.

• As part of the three-year agreement with Queen Rania Foundation which started in 2017, SGBJ sponsored the 2017 winter camp at the Children’s Museum in addition to sponsoring Jordan River Foundation’s annual exhibition.

• SGBJ renewed its partnership with Family Flavours Magazine and Nakahat Ailiyeh Magazine for the 5th consecutive year; the only magazines specialized in parenting in Jordan.

• SGBJ participated in the French Embassy’s celebrations on the 14th of July whereby a cel-ebration took place at His Excellency the French Ambassador David Bertolotti residence.

• SGBJ sponsored “Ramset Hayat” festival which took place at the Royal Jordanian Bikes Club, whereby this festival contributed in offering treatment for cancer disease for the or-

(20) CONTRACTS, PROJECTS AND BINDS SIGNED BY THE BANK WITH AFFILIATED COMPANIES, CHAIRMAN, BOARD MEMBERS,GENERAL MANAGER, OR ANY OF THE BANK’S EMPLOYEES OR RELATIVES.

21) A- SGBJ’s Contribution to the Local Community

68 |

phans and under-privileged children in coordination with King Hussein Cancer Center. • For the 2nd time, SGBJ participated in “Le French Marche” which was held at Abdali Boulevard, whereby

there were commercial, economic, educational and cultural activities.• SGBJ continues its support for King Hussein Cancer Foundation and Al Aman Fund for the Future of Or-

phans through placing donation boxes inside its branches.• SGBJ supported King Hussein Cancer Foundation through purchasing greeting cards from the drawings of

the pediatric patients at the Center, as part of the support for the foundation and its good cause.• SGBJ offered financial support for covering the tuition fees for one student of Elia Nuqul Foundation at one

of the public universities.

The bank obtained the “Smoke-Free zone” certificate at an event hosted by the King Hussein Cancer Center and Foundation. This certificate recognizes the banks effort in prohibiting smoking in its administrative building as well as all its branches in order to raise awareness regarding the importance of providing a healthy and smoke-free working environment for its employees.Customers Complaints:During the year 2017; the bank received ( 180) complaints, for which; all needed actions were taken to solve them all, mentioning that according to Central Bank of Jordan instructions concerning “ Transparency & Jus-tice” number 56/2012; the bank has created an independent unit, linked to Compliance Department for treat-ing customers complaints, moreover; the bank had implemented CBJ instructions number 1/2017 concerning the “ Internal Procedures for Dealing with Customers Complaints”Number of Board of Directors and its Committees’ MeetingsThe Bank’s Board of Directors held 7 meetings during the year 2017. The Committees of the Board also con-vened as follows:1- The Board Audit Committee: Six times2- The Board Nomination & Remuneration Committee: Twice3- The Board Risk Management Committee: Four times4- The Board Corporate Governance Committee: TwiceNoting that the Board Credit Committee has made its decisions by means of circulation.

The total number of meeting held during 2015

Board of Directors

Audit Committee

Nomination and

Remuneration Committee

Risk Management

Committee

Corporate Governance Committee

7 6 2 4 2

1 Messrs. Société Générale De Banque Au Liban/ Represented by Mr. Hassan Hamdi Khalil Mango

7 - - - 2

2 Messrs. Sogelease Liban/ Represented by Mr. Antoun Nabil Nicolas Sehnaoui

3 - - - -

3 Messrs. Sogecap Liban/ Represented by Miss Noha Espiridon Khalil Abou Saad

5 - - 3 2

4 Mr. Gérard Albert Goulven Garzuel 2 2 - - -5 Mr. Gregoire Yves Marie Lefebvre 3 - - 2 -6 Dr. Ahmad Ibrahim Khalil Mango* 5 - - - -7 Mr. Omar Khaled Agha** 6 5 2 - 28 Mr. Mufleh Moh’d Awad Akel* 6 6 - 3 29 D. Fawaz Hatim Zu’bi 6 - 2 - 210 Mr. Georges Elie Georges Saghbini 5 5 2 2 -11 Mr. Philippe Joseph Bernard

Dubois 2 - 2 - -

12 Mr. Khalil Anis Nasr 7 6 2 4 -

21) B- The Banks Contribution Towards Protecting The Environment:

*Independent Director Non committee member69

BOARD MEMBERS DeCLARATIONS

1) The Bank’s Board members declare that none has received any benefits during his work at the bank that has not been disclosed, whether such benefits were in the form of cash or in-kind, and whether it was granted to him personally or to any of his affiliated parties, during the year 2017. 2) The Bank’s Board of Directors declares that there are no material affairs that could affect the Bank’s continuity during the financial year 2018.3) The Board of Directors assumes responsibility for the preparation of the financial statements and for providing an effective control system at the Bank.Chairman of the Board: Messrs. Société Générale De Banque Au Liban/Represented by Mr. Hassan Hamdi Khalil Mango

Deputy Chairman of the Board: Messrs. Sogelease Liban/Represented by Mr. Antoun Nabil Nicolas Sehnaoui

Board Member: Messrs. SGBL Insurance SAL/Represented by Miss Noha Espiridon Khalil Abou Saad

Board Member: Mr. Gérard Albert Goulven Garzuel

Board Member: Mr. Gregoire Yves Marie Lefebvre

Board Member: Dr. Ahmad Ibrahim Khalil Mango

Board Member: Dr. Fawaz Hatim Sharif Zu’bi

Board Member: Mr. Mufleh Moh’d Awad Akel

Board Member: Mr. Omar Khaled Rasheed Agha

Board Member: Mr. Georges Elie Georges Saghbini

Board Member: Mr. Philippe Joseph Bernard Dubois

Board Member: Mr. Khalil Anis Nasr

4) We the undersigned assume responsibility for the correctness, accuracy and completeness of all information and statements stated in the Annual Report for 2017.

Chairman of the Board General Manager Finance Department Aghadeer Tawfiq Shaker

Abu GhoshHassan Hamdi Khalil

Mango

Nadim Alexandre

Farid Abawat

70 |

ConsolidatedFinancial Statements

ConsolidatedFinancial Statements

72 |

INDEPENDENT AUDITOR'S REPORTTo the Shareholders of Societe Generale De Banque-JordanieAmman-Jordan

73

OpinionWe have audited the consolidated financial statements of Societe Generale De Banque - Jordanie (a public shareholding company) (“the Bank”) and its subsidiaries (the “Group”), which comprise the consolidated statement of financial position as at 31 December 2017, and the consolidated statement of profit or loss, con-solidated statement of other comprehensive income, consolidated statement of changes in equity and con-solidated statement of cash flows for the year then ended,and noies to the consolidated financial statements, including a summary of significant accounting policies.In our opinion, the accompanying consolidated finan-cial statements present fairly, in all material respects, the financial position of the Group as at 31 December 2017, and its financial performance and cash flows for the year then ended in accordance with International Financia Reporting Standards (IFRSs).

Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards, are further described in the Auditor’s Responsibilities for the Audit of the consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Inter-national Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the consolidated financial statements ¡n Jordan, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other MatterThe consolidated financial statements for the year ended 31 December 2016 were audited by Ernst & Young — Jordan as the sole auditor of the Bank for the year 2016. An unqualified opinion was issued on the con-solidated financial statements for the year ended 31 December 2016 on 23 February 2017. Deloitte & Touche (Middle East) and Ernst & Young — Jordan were appointed as joint auditors for the Bank for the year ended 31 December 2017 in accordance with Central Bank of Jordan regulations for corporate governance. The accom-panying consolidated financial statements are a translation of thA original consolidated financial statements in the Arabic language to which reference should be made.

Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most significance In our au-dit of the consolidated financial statements for the year ended 31 December2017. These matters were ad-dressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our de-scription of how our audit addressed the matter provided in that context We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our

assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statement5.

Other Information Included In The Group’s 2017 Annual ReportOther information consists of the information included ¡n the Groups Annual Report other than the consolidated financial statements and our auditor’s report thereon. Management is responsible for the other information. The Group’s Annual Report is expected to be made available to us after the date of this auditor’s report.

Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our respon-sibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained ¡n the audit or otherwise appears to be materially misstated.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial StatementsManagement is responsible for the preparation and fair presentation of the consolidated financial statements in accord-ance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of con-solidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going con-cern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial StatementsOur objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.Reasonable assurance ¡s a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when ¡t exist. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of us-ers taken on the basis of these consolidated financial statements.

1. Impairment of loans and advances to customers

2. Suspension of interest on non-performing loans

Key Audit matter

Impairment of loans and advances is one of the most significant matters that impact the reported results of the Group, in addition of being an area that re-quires a considerable amount of judgment for deter-mining impairment event and the measurement of impairment loss. Judgment is applied to the inputs of the measurement process of impairment includ-ingvaluation of collateral and determining the de-fault date, and as a result, impairment is calculated from that date. As at 31 December 2017, the gross loans and advances amounted to JD 674,620,731 against whichaccumulated loan loss provision of JD 10,282930 was recorded.

Key Audit matter

Interest is suspended after 90 days from impairment event (default date) in accordance with Central Bank of Jordan regulations. Judgment ¡s applied as to de-termining when the default date occurred which af-fects the amount of interest to be suspended.

how the key audit matter was addressed in the audit

Our audit procedures included selecting a sample from the schedules of non-performing loans and interest in suspense, and tested suspended interest including recalculation in accordance with CBJ regu-lations, and assessing the criteria used by manage-ment for determining the impairment event. Refer to the note (7) on the consolidated financial statements.

How the key audit matter was addressed in the audit

Our audit procedures included obtaining the non-performing and watch list loans schedules, samples were selected to test impairment which included collateral valuation and assessing the provision re-quired based on the date of detault. We also select-ed a sample from the performing loans to determine whethermanagement had identified all impairment events. Refer to the note (2), (7) on the consolidated financial statements.

74 | 75

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresenta-tions, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are ap-propriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

• Evaluable Lilt appropriateness of accounting policies used and the rea3Ofl8blCflC3 of accounting estimates and re-lated disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exist, we are required to draw attention ¡n our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However futureevents or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the dis-closures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to comniunicate with them all relationships and other matters that may rea-sonably be thought to bear on our independence and where applicable, related safeguards. From the matters communi-cated with those charged with governance, we determine those matters that were of most significance in the audit nf the consolidated financial statements of the current period, and are therefore the key audit matters. We describe these mat-ters in our auditor’s report, unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonable be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory RequirementsThe Group maintains proper books of accounts which are in agreement with the consolidated financial statements.Amman — Jordan

27 February 2018

JordanDeloitte & Touch (Middle East) - JordanErnst&Young

20162017JDJDNotes LIABILITIES

44,392,86414,815,15713Banks and financial institutions’ deposits1,001,027,2111,081,981,98614Customers’ deposits

88,168,88088,545,91615Margin accounts17,307,12315,216,31216Loans and borrowings

73,06446,50017Other provisions5,235,1922,808,92318Income tax provision

264,311404,95918 Deferred tax liabilities13,266,15714,139,54919Other liabilities

1,169,734,8021,217,959,302TOTAL LIABILITIES

SOCIETE GENERALE DE BANQUE - JORDANIECONSOLIDATED STATEMENT OF FINANCIAL POSITIONAT 31 DECEMBER 2017

20162017JDJDNotesASSETS

142,927,198104,736,0464 Cash and balances at central bank96,822,68863,860,3935Balances at banks and financial institutions15,215,19633,252,1616Deposits at banks and financial institutions

568,214,647650,649,4487Direct credit facilities – net478,779521,3928Financial assets at fair value through other comprehensive income

314,489,658273,310,1119Financial assets at amortized cost126,403,000187,090,0009Pledged financial assets22,346,82322,492,72010Property and equipment – net1,355,2561,279,57111Intangible assets – net

1,358,6871,134,76418Deferred tax assets13,563,68313,724,71712Other assets

1,303,175,6151,352,051,323TOTAL ASSETS

LIABILITIES AND EQUITY

EQUITY ATTRIBUTABLE TO THE BANK’S SHAREHOLDERS20162017

JDJDNotes100,000,000100,000,00020Issued and paid up capital10,411,06411,627,57721Statutory reserve

100,000100,00021Voluntary reserve4,167,7944,965,27221General banking risk reserve

(53,000)(212,001)22Fair value reserve - net18,814,95517,611,17323Retained earnings

133,440,813134,092,021TOTAL EQUITY1,303,175,6151,352,051,323TOTAL LIABILITIES AND EQUITY

The accompanying notes from 1 to 43 represent an integral part of these consolidated financial statements and should be read with them.

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20162017JDJDNotes

55,932,43364,764,86524Interest income(35,240,224)(45,098,944)25Interest expense20,692,20919,665,921Net interest income

2,665,8091,457,10026Net commission income

23,358,01821,123,021Net interest and commission income

928,835921,39927Gain from foreign currencies3,129,8531,341,2759Gain on sale of financial assets at amortized cost

(64,418)17,117 Gain (loss) on sale of financial assets at fair value through profit or loss

18,75013,0008Dividends income from financial assets at fair value through other comprehensive income

1,915,8972,079,78928Other income29,286,93525,495,601Gross income

(5,637,153)(5,977,773)29Employees expenses(1,222,193)(1,354,927)11, 10Depreciation and amortization(4,652,868)(5,112,000)30Other expenses

(648,719)(1,172,662)7Impairment loss on direct credit facilities(12,662)25,77217Recovered from (charged to) other (provisions)

(444,115)130,00612Recovered from (charged to) provision against seized assets(109,500)-9Impairment loss on financial assets at amortized cost

(12,727,210)(13,461,584)Total expenses

16,559,72512,034,017Profit before income tax(5,651,690)(4,223,808)18Income tax expense10,908,0357,810,209Profit for the year

JD/FilsJD/Fils0/1090/07831Basic and diluted earnings per share for the year

SOCIETE GENERALE DE BANQUE - JORDANIE CONSOLIDATED STATEMENT OF PROFIT OR LOSSFOR THE YEAR ENDED 31 DECEMBER 2017

The accompanying notes from 1 to 43 represent an integral part of these consolidated financial statements and should be read with them.

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20162017JDJD

10,908,0357,810,209Profit for the year

Add: Other comprehensive income items which will not be reclassified to profit and loss at subsequent periods

(54,250)(159,001)Change in fair value reserve, net of tax 10,853,7857,651,208Total comprehensive income for the year

SOCIETE GENERALE DE BANQUE - JORDANIECONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2017

The accompanying notes from 1 to 43 represent an integral part of these consolidated financial statements and should be read with them.

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Retained earnings include JD 1,134,764 as at 31 December 2017 (2016: JD 1,358,687) which represents deferred tax assets. According to the Central Bank of Jordan’s regulations, this balance is restricted.

The general banking risk reserve includes JD 4,965,272 as at 31 December 2017 which is restricted from use without prior approval of the Central Bank of Jordan.

Retained earnings include an amount of JD 48,831 which represents the effect of the early adoption of IFRS 9 which cannot be used except for the amounts realized through the actual selling including capitalization and distribution of the respective assets.

* The negative fair value reserve of JD 212,001 as at 31 December 2017 which is restricted from use as per the directives of Jordan Securities Commission .* In its ordinary meeting held on 26 April 2017, the general assembly approved the distribution of cash dividends for the year 2016 with a percentage of 7% from paid in capital .

SOCIETE GENERALE DE BANQUE - JORDANIE CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2017

Reserves

TotalEquity

Retainedearnings

Fair valueGeneral

bankingrisk

VoluntaryStatutoryIssued and

paid incapital 2017

JDJDJDJDJDJDJD

133,440,81318,814,955(53,000)4,167,794100,00010,411,064100,000,000Balance as at 1 January 2017

7,810,2097,810,209-----Profit of the year

(159,001)-(159,001)----Change in fair value reserve, net of tax

7,651,2087,810,209(159,001)----Total comprehensive income

(7,000,000)(7,000,000)-----Cash dividends*

-(2,013,991)-797,478-1,216,513-Transfers to reserves

134,092,02117,611,173(212,001)4,965,272100,00011,627,577100,000,000Balance as at 31 December 2017

2016

127,587,02815,354,418(1,250)3,385,332100,0008,746,028100,000,000Balance as at 1 January 2016

10,908,03510,908,035-----Profit of the year

(54,250)-(54,250)----Change in fair value reserve, net of tax

10,853,78510,908,035(54,250)----Total comprehensive income

(5,000,000)(5,000,000)-----Cash dividends

-(2,447,498)-782,462-1,665,036-Transfers to reserves

133,440,81318,814,955(53,000)4,167,794100,00010,411,064100,000,000Balance as at 31 December 2016

The accompanying notes from 1 to 43 represent an integral part of these consolidated financial statements and should be read with them. 79

CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2017

The accompanying notes from 1 to 43 represent an integral part of these consolidated financial statements and should be read with them.

20162017JDJDNotesOPERATING ACTIVITIES

16,559,72512,034,017Profit before income taxNon-cash adjustments for

1,222,1931,354,92710,11Depreciation and amortization648,7191,172,6627Impairment losses on direct credit facilities109,500-Impairment loss on financial assets at amortized cost64,418(17,117)(Gain) loss from sale of financial assets at fair value through profit or loss

(3,129,853)(1,341,275)9Gain from sale of financial assets at amortized cost157(4,192)(Gain) losses from sale of property and equipment

12,662(25,772)17Other provisions(672,931)(652,834)Effect of exchange rate differences on cash and cash equivalent

14,814,59012,520,416Profit before changes in assets and liabilities

Changes in assets and liabilities -

(3,545,000)-Restricted balances2,243,937(18,036,965)Decrease in deposits at banks and financial institutions

(137,269,332)(83,607,463)Direct credit facilities(2,461,145)(161,034)Other assets84,329,98080,954,775Customers’ deposits

(11,429,489)377,036Margin accounts

1,603,549873,392Other liabilities-(3,987,126)Banks and financial institutions deposits (with maturities over three months)

(792) (158,384)Other provisions (51,871,294)(11,067,761)Net cash flows (used in) from operating activities before income tax paid(4,648,751)(6,285,506)18Income tax paid

(56,520,045)(17,353,267)Net cash flows (used in) operating activities

INVESTING ACTIVITIES(220,738,010)(88,274,805)Purchase of financial assets at amortized cost

64,834,05532,866,901Redemption of financial assets at amortized cost

(282,694)(201,614)Purchase of financial assets at fair value through other comprehensive income-(4,074,928)Purchase of financial assets at fair value through profit and loss

31,787,6444,092,045Proceeds from sale of financial assets at fair value through profit or loss 38,164,04937,241,726Proceeds from sale of financial assets at amortized cost

7,1724,764Proceeds from sale of property and equipment(296,746)(496,209)Purchase of property and equipment(722,803)(843,013)Advances on purchase of property and equipment(32,012)(86,489)Purchase of intangible assets

(87,279,345)(19,771,622)Net cash flows (used in) investing activities

FINANCING ACTIVITIES

4,686,1093,810,214Proceeds from loans and borrowings

(8,234,495)(5,901,025)Repayment of loans and borrowings

(5,000,000)(7,000,000)Cash dividends

(8,548,386)(9,090,811)Net cash flows (used in) financing activities

(152,347,776)(46,215,700)Net (decrease) in cash and cash equivalents

672,931652,834Effect of exchange rate differences on cash and cash equivalents

348,486,867196,812,022Cash and cash equivalents at 1 January196,812,022151,249,15618Cash and cash equivalents at 31 December

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1. GENERAL INFORMATIONThe Bank was established as a financial real estate investment company on 22 April 1965 in accordance with Jordanian Companies Law No (55), and it was transferred to investment bank during 1993 in accordance with companies law No. (1) for the year of 1989.The Bank provides its banking services through its 17 branches located in the Kingdom of Jordan. The Bank has no branches outside the Kingdom. The Bank owns two subsidiary companies.As at 31 December 2017, the paid in capital amounted to JD 100,000,000 allocated over 100,000,000 shares each having a par value of JD 1.The Bank's shares are listed on Amman Stock Exchange.The consolidated financial statements were authorized for issuance by the Bank’s Board of Directors in their meeting no. (1/2018) held on 21 February 2018 and they are subject to the approval of central Bank and General Assembly of shareholders.

2-1. Basis of preparation of the consolidated financial statementsThe consolidated financial statements of the Bank and its subsidiary have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations (IFRICs) as issued by the Internal and Accounting Standards Board (IASB), and in conformity with the applicable laws and regulations of the Central Bank of Jordan.

The consolidated financial statements are prepared under the historical cost basis, except for financial assets at fair value through profit or loss and other comprehensive income which are presented at fair value as of the date of the consolidated financial statements.

The consolidated financial statements have been presented in Jordanian Dinars (JD) which is the functional currency of the Bank.

2-2. Changes in accounting policiesThe accounting policies used in the preparation of the financial statements are consistent with those used in the preparation of the annual financial statements for the year ended 31 December 2016 except for the followings:

Amendments to IAS 7 Statement of Cash Flows: Disclosure Initiative

Limited amendments which require entities to provide disclosures about changes in their liabilities arising from financing activities, including both changes arising from cash and non-cash changes (such as foreign exchange gains or losses). However, the adoption of these amendments had no impact on the Bank’s consolidated financial statements.

Amendments to IAS 12 Income Taxes: Recognition of Deferred Tax Assets for Un-recognised Losses

Limited amendments to clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference and some other limited amendments, the adoption of these amendments have no impact on the Bank’s consolidated financial statements.

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

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2-3. Basis of consolidationThe consolidated financial statements comprise the financial statements of the Bank and its subsidiaries (“The Group”). Control is achieved when the Group is exposed, or has rights, to variable returns from it’s involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. Inter-company balances and transactions are eliminated between the bank and the subsidiary:

Societe Generale Brokerage Company (“The Subsidiary”), which is fully owned by the Bank with paid in capital of JD 750,000 as of 31 December 2017, was established on 6 June 2006. The Company’s main objective is providing brokerage services.Societe Generale Leasing Company (“The Subsidiary”), which is fully owned by the Bank with paid in capital of JD 5,000,000 as of 31 December 2017, was established on 20 September 2017. The Company’s main objective is providing leasing services.The financial statements of the subsidiary are prepared for the same reporting year as that of the Bank, using consistent accounting policies. If the subsidiary has a different accounting policy than the bank, necessary adjustments will be reflected to match the bank’s accounting policies. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. The results of operations of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss from the date the Bank gains control until the date the Group ceases to control the subsidiary.Non- controlling interest represents the portion of equity in the subsidiaries owned by others.If standalone financial statements are prepared for the Bank, the investment in subsidiary will be shown at cost in the statement of financial position.

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

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2-4. Significant accounting policiesSegmental reportingBusiness segments represent distinguishable components of the Bank that are engaged in providing products or services that are subject to risks and rewards that are different from those of other segments and reported based on the reports that are used by the Bank’s chief executive decision maker.Geographical segments are associated to products or services provided within a particular economic environment, which are subject to risks and rewards that are different from those of other economic environments.

Direct credit facilities Direct credit facilities are financial assets with fixed installments initially granted or acquired by the Bank and has no market value in active markets. Direct credit facilities are measured at amortized cost.Provision for impairment of direct credit facilities is recognized when there is an objective event occurring after the initial recognition of the facility, that has a negative impact on the estimated future cash flows of the facilities and that can be reliably estimated. The impairment is charged to the consolidated statement of profit or loss.Interest and commission on non-performing facilities provided for customers are suspended according to the directives of the Central Bank of Jordan.Loans and the related provision for impairment are written off, when collection procedures become ineffective. The excess in the allowance of possible loan losses, if any, is transferred to the consolidated statement of profit or loss, and cash recoveries of loans previously written - off are credited to income.

Financial assets at fair value through other comprehensive income Represent equity investments being held for sale in the long term.These financial instruments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value. Gains or losses arising on subsequent measurement of these equity investments including the change in fair value arising from non-monetary assets in foreign currencies are recognized in other comprehensive income in the consolidated statement of changes in equity. The gain or loss on disposal of the asset is recorded in the consolidated statement of other comprehensive income and the related fair value reserve balance reclassified from fair value through other comprehensive income reserve directly to retained earnings and not through the consolidated income statement.These financial assets are not subject to impairment testing.

Dividend income is recognized in the consolidated statement of profit or loss.

Financial assets at fair value through profit or loss

- Financial assets which are purchased with the aim of resale in the near future in order to generate profit from the short-term market prices fluctuation or the trading profit margins.- Investments in equity instruments are initially measured at fair value through profit or loss, unless the Bank classified the financial investments as not for trading at fair value through other comprehensive income at the purchase date.

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Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

- These financial assets are initially stated at fair value at acquisition date (acquisition costs are charged to expense at the date of purchase). Subsequently, these assets are revalued at fair value. Gains or losses arising on subsequent measurement of these financial assets including the change in fair value arising from non-monetary assets in foreign currencies are recognized in the statement of profit or loss. When these assets or portion of these assets are sold, the gain or loss arising are recorded in the consolidated statement of profit or loss . - Dividend and interest income are recorded in the consolidated statement of profit or loss.- Reclassification of financial assets from or to this item is prohibited expect for the cases outlined in the financial reporting standards.- Financial assets without quoted prices or active trading in active markets cannot be classified under this item. Active trading means that the financial instrument have been traded within three months from the date of acquisition.

Financial assets at amortized cost Financial assets are measured at amortized cost only if these assets are held within a business model whose objective is to hold the asset to collect their contractual cash flows which comprise payment of original principal and interest on the outstanding principal amount.These financial assets are initially measured at cost plus transaction costs. Subsequently, premiums or discounts are amortized using the effective interest rate method, less allowance for impairment and included in finance income/ expenses in the consolidated statement of income. The losses arising from impairment are recognized in the consolidated statement of income.The amount of the impairment consists of the difference between the book value and present value of the expected future cash flows discounted at the original effective interest rate.Reclassification from / to this caption is not allowed except for the cases outlined in IFRS (in case of sale of any of these assets before maturity, results will be separately disclosed in the statement of income as specifically required by IFRS).

Fair valueThe Bank measures the financial instruments, such as derivatives, financial, and non-financial assets, at fair value at the date of the consolidated financial statements. The fair value of the financial instruments at amortized cost is shown in Note 35.The fair value represents the price that will be obtained when selling the assets or the amount that will be paid to transfer the commitment of the regulated transaction between the participants in the market at the date of measurement.Fair value is measured based on the assumption that the process of selling assets or transferring commitments is done through the primary markets for those assets and liabilities.In the absence of the primary market, the most suitable market will be used to trade the assets and liabilities. The bank needs the opportunities to reach the primary or most suitable markets.A fair value measurement of a non–financial assets takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.The Bank uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

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observable inputs and minimizing the use of unobservable inputs.The Bank uses the following valuation techniques in setting the fair value of the financial instruments:All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities.Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.Level 3 –Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, the Bank determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.For the purpose of the fair value note, the Group classifies the assets and liabilities according to its nature and the risks of the assets and liabilities, and the level of the fair value.

Impairment of financial assetsThe Bank assesses at each consolidated financial position date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. In such evidence exists, the recoverable amount is estimated in order to determine the amount of impairment loss.Impairment is determined as follows:- For financial assets carried at amortised cost: impairment is based on the difference between the carrying value and the estimated cash flows discounted at the original effective interest rate.The impairment in value is recorded in the consolidated statement of income . any surplus in the subsequent period resulting from previous declines in the fair value of financial assets is taken to the consolidated statement of income except for the impairment of financial assets at fair value through the statement of comprehensive income, in which case the impairment is recovered through the fair value reserv

Property and equipmentProperty and equipment are measured at cost less accumulated depreciation and any accumulated impairment in value. Depreciation is calculated using the straight-line method, (except for lands), to write down the cost of property and equipment to their residual values over their estimated useful lives, when the assets become ready to use. Depreciation rates used are as follows:

%

5 - 15Equipment and furniture15Vehicles20Computers2Buildings

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Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

When the expected recoverable value is less than the carrying value, the assets are written down to their recoverable amount, and the impairment is recorded in the consolidated statement of income.Useful lives of property and equipment are reviewed at the end of each year. If the expectations of useful lives are different from the previous estimates, the change is accounted for as changes in estimate in future periods.An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal.

ProvisionsProvisions are recognized when the Bank has a present obligation arising from a past event and the costs to settle the obligation are both probable and able to be reliably measured.

Income taxTax expense comprises current tax and deferred taxes.Current tax is based on taxable profits, which may differ from accounting profits published in the consolidated financial statement. Accounting profits may include non-taxable profits or tax non-deductible expenses in the current year or accumulated losses that are acceptable as tax deductions or items that are non taxable or not deductible for tax purpose.Tax is calculated based on tax rates in laws and regulations that are applicable in the Hashemite Kingdom of Jordan. Deferred tax are taxes expected to be paid or recovered as a result of temporary timing differences between the value of the assets and liabilities in the consolidated financial statements and the value of the taxable income. Moreover, deferred taxes (if any) are calculated according to the statement of financial position liability method and based on the tax rates expected to be applied at the tax settlement date or the realization of the deferred tax assets or liabilities.The carrying values of deferred income tax assets and liabilities are reviewed at each consolidated financial position date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.

Fiduciary assets Assets held in a fiduciary capacity are not recognized as assets of the Bank. Fees and commissions received for administering such assets are recognized in the consolidated statement of income. A provision is recognized for decreases in the fair value of guaranteed fiduciary assets below their original principal amount.

OffsettingFinancial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position only when there is a legally enforceable right to set off the recognized amounts and the Group intends to either settle on a net basis, or to realize the asset and settle the liability simultaneously.

Revenue and expense recognition Interest income is recorded using the effective interest rate method except for interest on non performing facilities, on which interest is transferred to the interest in suspense account and not recognized in the consolidated statement of income.

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

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Expenses are recognized on an accrual basis.Commission income is recognized upon the rendering of services. Dividend income is recognized when the right to receive payment is established (when they are approved by the general assembly of the shareholders).

Financial assets recognition Purchases and sales of financial assets are recognized on the trade date (the date on which the Bank commits to sell or purchase the financial assets).

Financial Derivatives and Hedge AccountingHedged Financial Assets

For hedge accounting purposes, the financial derivatives are stated at fair value. Hedges are classified as follows:- Fair value hedge: hedge for the change in the fair value exposures of the Bank's assets and liabilities.When the conditions of effective fair value hedge are met, the resulting gain or loss from re-measuring the fair value hedge as well as change in the fair value of hedged assets and liabilities is recognized in the consolidated statement of income. When the conditions of effective portfolio hedge are met, the gain or loss resulting from the revaluation of the hedging instrument at fair value as well as the change in the fair value of the assets or liabilities portfolio are recorded in the consolidated statement of income for the same period. - Cash flow hedge: hedge for the change in the current and expected cash flows’ exposures of the Bank's assets and liabilities.When the conditions of effective cash flow hedge are met, the gain or loss of the hedging instruments is recognized in the consolidated statement of comprehensive income and shareholders’ equity. Such gain or loss is transferred to the consolidated statement of income in the period in which the hedge transaction impacts the consolidated statement of income.- Hedge for net investments in foreign entities: When the conditions of the hedge for net investment in foreign entities are met, fair value is measured for the hedging instrument of the hedged net assets. In case of an effective relationship, the effective portion of the loss or profit related to the hedging instrument is recognized in the consolidated statement of comprehensive income and shareholders’ equity. On the other hand, the ineffective portion is recognized in the consolidated statement of income. The effective portion is recorded in the consolidated statement of income when the investment in foreign entities is sold.- When the conditions of the effective hedge do not apply, gain or loss resulting from the change in the fair value of the hedging instrument is recorded in the consolidated statement of income in the same period.

Financial Derivatives for TradingThe fair value of financial derivatives for trading (such as forward foreign currency contracts, future interest rate contracts, swap agreements and foreign currency options) is recorded in the consolidated statement of financial position. Fair value is measured according to the prevailing market prices, and if not available, the measurement method should be disclosed. The change in fair value is recognized in the consolidated statement of income.

Repurchase and resale agreementsAssets sold with a simultaneous commitment to repurchase at a specified future date (repos) will continue to be recognized in the Bank’s consolidated financial statements due to the Bank’s continuing exposure to the risks and rewards of these assets using the same

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Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

accounting policies (and in case the buyer have the right to sell or re-pledge these assets, it should be reclassified as financial assets pledged as collateral).The proceeds of the sale are recorded under loans and borrowings. The difference between the sale and the repurchase price is recognized as an interest expense over the agreement term using the effective interest method.Assets purchased with a corresponding commitment to resell at a specified future date (reverse repos) are not recognized in the Bank’s consolidated financial statements since the Bank is not able to control these assets and any risk or benefits associated with it are not related to the bank. The related payments are recognized as part of deposits at banks and financial institutions or direct credit facilities as applicable, and the difference between purchase and resale price is recognized in the consolidated statement of profit or loss over the agreement term using the effective interest method.

Financial assets pledged as collateralThe assets pledged by the Bank are for the purpose of providing collateral for the counter party to the extent that counter party is permitted to sell and /or re-pledge the assets. The method of valuation is related to the financial policies for its basic classification.

Assets seized by the BankAssets seized by the Bank are shown in the consolidated statement of financial position under “Other assets” at the lower of their carrying value or fair value. Assets are revalued at the statement of financial position date on an individual basis and impairment losses are recognized in the consolidated statement of income, while revaluation gains are not recognized as income. Reversal of previous impairment losses shall not result in a carrying value that exceeds the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years.

Intangible assetsIntangible assets acquired through basiness combination are stated at fair value at the date of acquisition, while other intangible assets acquired otherwise are recorded at cost.Intangible assets not acquired through business combination are measured on initial recognition at cost. Intangible assets are classified based on whether it has a finite or indefinite life.Intangible assets with finite lives are amortized over the useful economic life, while intangible assets with indefinite useful lives are assessed for impairment at each reporting date or when there is an indication that the intangible asset may be impaired. The amortization and the impairment expenses are recorded in the consolidated statement of income.Internally generated intangible assets are not capitalized and are expensed in the consolidated statement of income in the same period.Indications of impairment of intangible assets are reviewed and their useful economic lives are reassessed at each reporting date. Adjustments are reflected in the subsequent periods. Intangible assets include computer software and programs and participation fees Bank’s Management estimate the economic useful lives of each item and amortize it using the straight line method, where computer software and programs and participation fees are amortized by 20% and 5% respectively.

Foreign currencies Transactions in foreign currencies are recorded at the exchange rates ruling at the date of the transaction.Monetary assets and liabilities in foreign currencies are translated into respective functional currencies at exchange rates prevailing at the consolidated financial position date as issued by Central Bank of Jordan. Any gains or losses are taken to the consolidated statement of income.Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

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Exchange differences for non-monetary assets and liabilities in foreign currencies (such as equity instruments) are recorded as part of the change in fair value.

Cash and cash equivalents Cash and cash equivalents comprises cash on hand and cash balances with central bank and financial institutions that have original maturities of three months or less, net of banks and financial institutions deposits that have original maturities within three months and restricted balances.

3. USE OF ESTIMATES The preparation of the consolidated financial statements requires the Bank’s Management to make estimates and assumptions that affect the reported amounts of financial assets and liabilities and disclosure of contingent liabilities. These estimates and assumptions also affect the revenues and expenses and the resultant provisions as well as fair value changes reported in equity. In particular, considerable judgement by Management is required in the estimation of the amount and timing of future cash flows. Such estimates are necessarily based on assumptions about several factors involving varying degrees of judgement and uncertainty and actual results may differ resulting in future changes. The Management of the Bank believe that their estimates within the consolidated financial statements are reasonable and are as follows:- Provision for impairment in direct credit facilities: the Bank reviews its credit facilities according to the regulations of the Central Bank of Jordan as a minimum, and according to International Financial Reporting Standards (IFRS). - Impairment losses on seized assets are based on recent assets revaluation reports issued by reliable valuation experts for the purpose of determining the impairment in their carrying value. The impairment is reviewed periodically.-Income tax provision: income tax expense is charged according to the laws, regulations and accounting standards. Income tax liability and deferred income tax assets and liabilities are properly calculated and recognized.- Management periodically reassesses the economic useful lives of tangible and intangible assets for the purpose of calculating annual depreciation and amortization based on the general condition of these assets and the assessment of their expected useful economic lives in the future. Impairment loss (if any) is taken to the consolidated statement of income.- Management reviews the carrying values of financial assets held at cost, and any identified impairment is recorded in the consolidated statement of income.

- Legal provision is calculated for any legal liabilities according to the Bank’s legal counsel opinion.

4. CASH AND BALANCES AT CENTRAL BANK The details are as follows:

2016 2017JD JD

9,024,685 5,735,088Cash on hand Balances at Central Bank of Jordan:

19,963,685 4,434,519Current accounts and demand deposits 50,000,000 -Term and notice deposit

- 24,500,000Certificates of deposit 63,938,828 70,066,439Statutory cash reserve

142,927,198 104,736,046Total

There are no restricted balances other than the statutory cash reserve as at 31 December 2017 and 2016.There are no balances with maturities over three months as at 31 December 2017 and 2016.

89

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

5. BALANCES AT BANKS AND FINANCIAL INSTITUTIONSThe details are as follows:

TotalForeign Banks and Financial Institu-tions

Local Banks and FinancialInstitutions

201620172016201720162017JDJDJDJDJDJD

1,223,7638,345,7941,223,7638,345,794--Current and demand deposits

95,598,92555,514,59979,598,92544,187,59916,000,00011,327,000Deposit maturing within or less than 3 months

96,822,68863,860,39380,822,68852,533,39316,000,00011,327,000TotalNon-interest bearing balances at banks and financial institutions amounted to JD 8,345,794 as at 31 December 2017 (2016: JD 1,223,763).- The restricted balances amounted to JD 3,545,000 as at 31 December 2017 to JD 3,545,000 as at 31 December 2016.

6. DEPOSITS AT BANKS AND FINANCIAL INSTITUTIONSThe details are as follows:

2016 2017 JDJDDeposits mature within:

13,088,196 13,400,161 3 to 6 months2,127,0002,127,000More than 6 to 9 months

--More than 9 to 12 months-17,725,000More than 12 months

15,215,19633,252,161TotalThere are no restricted deposits balances as at 31 December 2017 and 31 December 2016.

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

90 |

7. DIRECT CREDIT FACILITIES - NET The details are as follows:

2016 2017JD JD

Consumer (retail) 71,179,185 69,272,992 Loans and bills * 1,822,977 1,892,459 Credit cards

107,307,621 134,308,035 Real estate loans

Corporate

53,845,063 76,494,120 Overdrafts 171,743,858 214,933,265 Loans and bills *

Small and medium enterprises (“SMEs”)

14,069,867 14,754,986Overdrafts 41,606,777 35,138,016 Loans and bills *

126,978,775 127,826,858 Government and public sector 588,554,123 674,620,731 Total

11,226,426 13,688,353 Less: Interest in suspense 9,113,050 10,282,930 Less: Provision for impairment of direct credit facilities

568,214,647 650,649,448 Direct credit facilities, net

Net of interest and commissions received in advance of JD 722,133 as at 31 December 2017 (2016: JD 336,367).

• Credit facilities guaranteed by the Jordanian Government amounted to JD 127,826,858 representing 18,95% of total direct credit facilities as at December 2017 (126,978,775 representing 21.57% % of total direct credit facilities as at December 2016).

• Non-performing credit facilities amounted to JD 28,253,235 representing 4,19% of

total direct credit facilities as at 31 December 2017 (JD 23,954,816 representing 4.07% of total direct credit facilities as at 31 December 2016).

• Non performing credit facilities net of interest in suspense amounted to JD 14,564,882

representing 2.20% of total direct credit facilities net of interest in suspense as at 31 December 2017 (JD 12,728,390 representing 2.20% of total direct credit facilities net of interest in suspense as at 31 December 2016).

• No interest in suspense against performing credit facilities as at 31 December 2017

and 31 December 2016.

91

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

Provision for impairment of direct credit facilities

TotalSMEsCorporate

Real estate loansConsumer

JDJDJDJDJD20179,113,0503,158,63045,747873,3745,035,299At 1 January

1,172,662582,069(20,956)180,610430,939Charges / (Recoveries) for the year

(2,782)---(2,782)Amounts written off

10,282,9303,740,69924,7911,053,9845,463,456At 31 December

9,969,7643,676,027-965,9035,327,834Individual impairment provision

313,16664,67224,79188,081135,622 Collective impairment provision for watch list debts

10,282,9303,740,69924,7911,053,9845,463,456Total

2016

8,471,0022,793,533438,782825,8534,412,834At 1 January

648,719365,097(393,035)47,521629,136Charges / (Recoveries) for the year

(6,671)---(6,671)Amounts written off

9,113,0503,158,63045,747873,3745,035,299At 31 December

8,865,4843,150,542-836,5864,878,356Individual impairment provision

247,5668,08845,74736,788156,943 Collective impairment provision for watch list debts

9,113,0503,158,63045,747873,3745,035,299Total

Provisions that are no longer needed due to settlement or debt repayments and were transferred against other debts amounted to JD 2,970,180 as at 31 December 2017 (2016: JD 1,735,439)

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

92 |

Interest in suspenseThe movement of interest in suspense is as follows:

TotalSMEs

Real estate

loansConsumerJDJDJDJD2017

11,226,4263,328,3271,276,2936,621,806At 1 January

3,591,0371,335,760271,5091,983,768Add: Suspended interest during the year

(727,578)(174,894)(1,900)(550,784)Less: Interest transferred to income

(401,532)(820)-(400,712)Less: interest in suspense written off

13,688,3534,488,3731,545,9027,654,078At 31 December

2016

8,927,9382,251,7761,099,3745,576,788At 1 January

2,854,8111,076,551205,0411,573,219Add: Suspended interest during the year

(309,615)-(28,122)(281,493)Less: Interest transferred to income

(246,708)--(246,708)Less: interest in suspense written off

11,226,4263,328,3271,276,2936,621,806At 31 December

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOMEThe details are as follows:

2016 2017JD JD

354,694195,694Quoted shares

124,085325,698Unquoted shares

478,779521,392 Total

Dividends distribution on the aforementioned financial assets amounted to JD 13,000 as at 31 December 2017 (2016: 18,750).

93

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

9. FINANCIAL ASSETS AT AMORTIZED COST 2016 2017

JD JD

Unquoted financial assets

24,856,753- Treasury bills

280,022,353 263,705,829Treasury bonds

10,261,852 10,113,782Corporate bonds

315,140,958 273,819,611Total unquoted financial assets

(651,300) (509,500)Allowance for impairment losses

314,489,658 273,310,111Total financial assets at amortized cost

314,489,658 273,310,111Analysis of bonds and bills Fixed income

• The financial bonds mature between the years 2018 to 2032.• Allowance for impairment loss of corporate bonds amounted to JD 509,500 as at 31

December 2017 (2016: JD 651,300 )• During 2017 the Bank sold financial assets at amortized cost for JD 35,900,451 which

resulted in a gain on sale of financial assets at amortized cost of JD 1,341,275.• During 2016 the Bank sold financial assets at amortized cost for JD 35,034,196 which

resulted in a gain on sale of financial assets at amortized cost of JD 3,129,853.• The movement on the allownce for impairment losses:

2016 2017JD JD

541,800651,300At 1 January

109,500-Additions

-(141,800)Disposal

651,300509,500At 31 December

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

94 |

PLEDGED FINANCIAL ASSETSThe details are as follows:

20162017

Related liabilities Pledged

financial assetsRelated liabilities Pledged financial

assetsJDJDJDJD

111,204,031126,403,000131,595,749187,090,000Financial assets at amortized cost

111,204,031126,403,000131,595,749187,090,000Total

The below bonds have been pledged against the following: Pledged against Maturity

DateBond Balance IssuanceNumberBond

Borrowing from Central Bank05/10/20261,090,00044/2016Treasury Bonds

Deposit for the Social Security Corporation22/09/202613,000,00040/2016Treasury Bonds

Deposit for the Social Security Corporation01/03/202615,000,0008/2016Treasury Bonds

Deposit for the Social Security Corporation19/09/202622,000,00038/2016Treasury Bonds

Deposit for the Social Security Corporation15/03/202325,000,00011/2016Treasury Bonds

Deposit for the Social Security Corporation20/08/202233,000,00023/2016Treasury Bonds

Deposit for the Social Security Corporation26/10/202228,000,00035/2015Treasury Bonds

Deposit for the Social Security Corporation23/11/202250,000,00044/2015Treasury Bonds

187,090,000Total

95

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

10. PROPERTY AND EQUIPMENT, NETThe details are as follows:

TotalComputersVehiclesFurniture

andFixtures

Buildings2017

JDJDJDJDJDCost:23,015,6603,931,289227,5275,147,52513,709,319At 1 January

496,209118,07823,724354,407-Additions

4,298,74921,292-909,9083,367,549Transfer from advance on purchasing property and equipment

(42,575)--(42,575)-Disposals

27,768,0434,070,659251,2516,369,26517,076,868At 31 December

Accumulated depreciation

7,723,1213,278,695143,8203,497,486803,120At 1 January

1,094,445275,31824,986453,886340,255Depreciation charged during the year

(42,003)--(42,003)-Disposals

8,775,5633,554,013168,8063,909,3691,143,375At 31 December

18,992,480516,64682,4452,459,89615,933,493Net book value of property and equipment

3,500,240257,202-26,9133,216,125Advance on purchasing property and equipment

22,492,720773,84882,4452,486,80919,149,618Net book value of property and equipment at 31 December

TotalComputersVehiclesFurniture

andFixtures

Buildings2016

JDJDJDJDJDCost:22,565,9513,854,923227,5274,774,18213,709,319At 1 January

296,74655,418-241,328-Additions

323,65426,952-296,702-Transfer from advance on purchasing property and equipment

(170,691)(6,004)-(164,687)-Disposals

23,015,6603,931,289227,5275,147,52513,709,319At 31 December

Accumulated depreciation

6,883,5602,954,046121,2963,279,284528,934At 1 January

1,002,923330,65322,524375,560274,186Depreciation charged during the year

(163,362)(6,004)-(157,358)-Disposals

7,723,1213,278,695143,8203,497,486803,120At 31 December

15,292,539652,59483,7071,650,03912,906,199Net book value of property and equipment

7,054,28476,790-393,8216,583,673Advance on purchasing property and equipment

22,346,823729,38483,7072,043,86019,489,872Net book value of property and equipment at 31 December

- Property and equipment includes fully depreciated assets amounting to JD 5,206,513 as at 31 December 2017 (2016: JD 4,958,373) and are still in use as at the date of the consolidated financial statement.

- The estimated cost to complete the projects under progress amounted to JD 3,563,701 as at 31 December 2017.

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

96 |

11. INTANGIBLE ASSETS, NETThe details are as follows:

Computer programs,software, key money, and participation fees

2016 2017

JD JD

935,5591,355,256At 1 January

32,01286,489Additions

606,95598,308Transfer from advance on purchasing property and equipment

(219,270)(260,482)Amortization charge for the year

1,355,2561,279,571At 31 December

- Intangible assets include fully amortized assets amounted to JD 1,475,869 as at 31 December 2017 (2016: JD 1,257,391) and are still in use up to date.

12. OTHER ASSETSThe details are as follows:

2016 2017JD JD

7,790,927 8,765,490 Accrued interest and revenue

443,401 806,164Prepaid expenses

2,938,357 2,887,823Assets seized by the Bank*

2,390,998 1,265,240Others

13,563,683 13,724,717 Total

According to Central Bank of Jordan regulations, assets seized by the Bank must be disposed off within two years from the seizing date.

97

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

The movement on assets seized by the Bank during the year is as follows:

2016 2017JD JD

3,214,043 2,938,357 At 1 January

342,203 110,699Additions

(170,298) (294,715)Disposals

(444,115) (189,734)Provision against seized assets*

- 319,740Recovery against seized assets

(3,476) 3,476(Provision) recovery of Impairment loss

2,938,357 2,887,823At 31 December

* This provision was provided for in accordance with the central bank of Jordan regulations against seized assets.

13. BANKS AND FINANCIAL INSTITUTION’S DEPOSITSThe details are as follows:

TotalOutside JordanInside Jordan2017

JDForeignJDForeignJD872,07320,677851,396--Current and demand deposits

13,943,0848,676,210-5,266,874-Time deposits

14,815,1578,696,887851,3965,266,874-Total

TotalOutside JordanInside Jordan2016

JDForeignJDForeignJD

549,34912,511536,838--Current and demand deposits

43,843,5156,220,215-32,623,3005,000,000Time deposits

44,392,8646,232,726536,83832,623,3005,000,000Total

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

98 |

14. CUSTOMERS’ DEPOSITSTotal Government and

public SectorsSMEsCorporateRetail2017

JDJDJDJDJD

99,855,78525,670,0625,424,91842,130,04226,630,763Current and demand deposits

36,059,46511,3511,527,42640,25234,480,436Saving accounts

918,160,581386,933,70323,702,047253,705,141253,819,690Time deposits

27,906,155-430,000962,48426,513,671Certificates of deposit

1,081,981,986412,615,11631,084,391296,837,919341,444,560Total

Total Government andpublic SectorsSMEsCorporateRetail

2016JDJDJDJDJD

174,311,87971,795,5347,001,05463,080,16332,435,128Current and demand deposits

28,689,01313,271765,678110,36127,799,703Saving accounts

789,909,883346,713,87924,626,483230,911,015187,658,506Time deposits

8,116,436-109,219-8,007,217Certificates of deposit

1,001,027,211418,522,68432,502,434294,101,539255,900,554Total

• The deposits of the Jordanian government and public sector inside Jordan amounted to JD 412,615,116 representing 38.14% of total deposits as at 31 December 2017 (JD 418,522,684 representing 41.81% of total deposits as at 31 December 2016).

• Non-interest bearing deposits amounted to JD 80,691,661 representing 7.46% of total deposits as at 31 December 2017 (JD 100,477,605 representing 10.04% of total deposits as at 31 December 2016).

• Restricted deposits amounted to JD 8,324 as at 31 December 2017 (2016: JD 4,539). • Dormant deposits amounted to JD 2,922,838 as at 31 December 2017 (2016: JD 2,553,014).

15. MARGIN ACCOUNTSThe details are as follows:

2016 2017JD JD

74,281,791 69,368,092 Margins on direct credit facilities

12,883,137 17,992,535Margins on indirect credit facilities

1,003,952 1,185,289Others

88,168,880 88,545,916 Total

99

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

16. LOANS AND BORROWINGSThe details are as follows:

Re-lending amount

Re- lending interest

rate

Interestrate

GuaranteesamountsGuaranteesInstalment

maturityRemainingTotalAmount2017

2,144,0596-80.25 variables--Semi annual5162,659,859French Agency for Development

1,638,8006.763.27 variables--Semi annual20202,000,000Central Bank advance*

1,333,3336.762.50 fixed--Semi annual14153,162,001Central Bank advance*

306,40041.75 fixed1,090,000BondsMonthly5454306,400Central Bank advance*

5,097,4143.6 – 6.51.75 – 2.50

variables-BillsMonthly1-1091-1095,088,052Central Bank advance*

2,000,00074.10 fixed5,621,750Mortgage Semi annual122,000,000Jordan Real Estates Mortgage Refinancing Company**

12,520,0066,711,75015,216,312Total

• Borrowings from Central Bank include an amount of JD 5,162,000 to finance and support micro, small and medium enterprises and an amount of JD 4,133,367 for medium term lending to support industrial sector and an amount of JD 1,261,086 for medium term lending to support tourism sector.

• ** All loans borrowed from Jordan Real Estate Mortgage Refinancing Company mature during 2018.

Re-lending amount Re-lending

interestrate

Interestrate

GuaranteesamountsGuaranteesInstalment

maturityRemainingTotalAmount2016

1,954,4916-80 .25 variables--Semi annual7243,244,718French Agency for Development

158,45752.75 fixed403,000BondsMonthly2-34-10204,031Central Bank advance*

6,458,3744-6.51,75-2,75 fixed-BillsMonthly2-4610-596,458,374Central Bank advance*

1,218,2076.53.05 fixed-BillsSemi annual23302,000,000Central Bank advance*

3,336,1116.52.50 fixed-BillsSemi annual16203,400,000Central Bank advance*

2,000,00073.75 fixed5,123,450Mortgage Semi annual122,000,000Jordan Real Estates Mortgage Refinancing Company**

15,125,6405,526,45017,307,123Total

• Borrowings from Central Bank include an amount of JD 5,400,000 to finance and support micro, small and medium enterprises and an amount of JD 4,821,650 for medium term lending to support industrial sector and an amount of JD 1,840,755 for medium term lending to support tourism sector.

• ** All loans borrowed from Jordan Real Estate Mortgage Refinancing Company mature during 2017.

No. of instalments

No. of instalments

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

100|

17. OTHER PROVISIONSThe details are as follows:

Balance at

31 December Transferred to

incomeUtilized during

the year Provided for

duringthe year

Balance at January 1

2017JDJDJDJDJD

46,500(28,416)(792)2,64473,064Provision for lawsuits filed against the bank

201673,064(8,755)(158,384)21,417218,786Provision for lawsuits filed against the bank

18. INCOME TAX A. Income Tax provision

The movement on the income tax provision is as follows: 2016 2017

JD JD

4,299,315 5,235,192At 1 January

5,584,628 3,859,237Income tax expense for the year

(4,648,751) (6,285,506) Income tax paid

5,235,192 2,808,923 At 31 December

Income tax appearing on the consolidated statement of profit or loss represents the following: 2016 2017

JD JD

5,584,628 3,859,237 Current year income tax

(29,692) 223,923Deferred tax assets for the year

96,754 140,648Deferred tax liabilities for the year

5,651,690 4,223,808

A final settlement has been reached with the Income Tax Department regarding the Bank tax up to 2015. - Tax return for 2016 were submitted to tax department and due tax was paid accordingly. - A final settlement has been reached with Income Tax Department regarding the brokerage Subsidiary tax up to 2012 and 2014. Tax returns for 2013, 2015 and 2016 were submitted with the Income and Sales Tax Department and tax was paid accordingly.

101

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

B. Deferred income tax assets / liabilities:

The details are as follows:20162017

DeferredTax

DeferredTax

Balance at31

December

Additionsduring the

year

Releasedduring the

year

Balance at1 JanuaryDeferred tax assets

Deferred tax assets

618,650618,6501,767,570--1,767,570Allowance for impairment loss of credit facilities

----(3,476)3,476Loss in seized assets1,827---(5,219)5,219Reserve for discounted loans

227,955178,325509,500-(141,800)651,300Provision of impairment losses of financial assets at amortized cost

139,410--- (398,313)398,313Provision for employees bonus & BOD remuneration

86,648109,608313,166295,320(229,720)247,566Provision for watch list loans 257,408211,906605,445189,734(319,740)735,451Provision for seized assets for more than 4 years

1,217-----Impairment loss on real estate25,57216,27546,5002,644(29,208)73,064Provision for lawsuit filed against the Bank

1,358,6871,134,7643,242,181487,698(1,127,476)3,881,959Total

20162017Deferred

TaxDeferred

TaxBalance at

31 DecemberAdditionsduring the

year

Releasedduring the

yearBalance at1 JanuaryDeferred tax liabilities

JDJDJDJDJDJD

264,311404,9591,157,025501,994(100,144)755,175Provision for properties and building depreciation264,311404,9591,157,025501,994(100,144)755,175Total

The movement on deferred tax assets account is as follows:

2016 2017JD JD

1,328,995 1,358,687 At 1 January

618,798 170,694Additions during the year

(589,106) (394,617)Released during the year

1,358,687 1,134,764 At 31 December

The movement on deferred tax liabilities is as follows:

2016 2017JD JD

167,557 264,311 At 1 January

140,736 175,698Additions during the year

(43,982) (35,050)Released during the year

264,311 404,959 At 31 December

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

102|

C. Reconciliation between accounting profit and taxable profit is as follows:

2016 2017JD JD

16,559,725 12,034,017 Accounting profit

(2,515,928) (1,642,470)Non-taxable income

1,928,318 607,375Non- deductible expenses

15,972,115 10,998,992 Taxable profit

34,13% 35.10% Effective income tax rate

35% 35% Statutory income tax rate

19. OTHER LIABILITIESThe details are as follows:

2016 2017JD JD

5,627,895 7,398,820Accrued interest expense

67,421 296,735Interest and commissions received in advance

795,767 930,314Accrued expenses

183,252 208,932Social security and income tax deposits

1,943,630 1,651,062Checks and payments order

911,089 135,873Inter-branches settlement

90,638 89,478Board of Director remunerations

2,660,528 2,177,189Restricted balances

985,937 1,251,146Others

13,266,157 14,139,549Total

20. AUTHORISED AND PAID IN CAPITAL Issued, authorized, and paid in capital As at 31 December 2017, the paid in capital amounted to 100,000,000 distributed over 100,000,000 shares (2016: JD 100,000,000) each having a par value of JD 1.

21. RESERVESStatutory reserve

As required by the Banking and Companies Law, %10 of the profit before tax and fees is transferred to the statutory reserve during current and previous years. This reserve is not available for distribution to shareholders.

103

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

Voluntary Reserve

This balance represents maximum 20% of profit before tax transferred during previous years. The reserve shall be used at the discretion of the Board of Directors, and the General Assembly has the right to distribute it to the shareholders in part or in full.

General banking risk reserve

This item represents general banking reserve in compliance with the directives of the Central Bank of Jordan.

The use of the following reserves is restricted as follows:

Nature of restrictionAmountName of the reserveJD

Banks and Companies Laws11,627,577Statutory reserve

Central Bank of Jordan directives4,965,272General banking risk reserve

22. FAIR VALUE RESERVE, NETThe details are as follows:

2016 2017JD JD

1,250(53,000)Balance at 1 January

(54,250)(159,001)Change in fair value reserve

(53,000)(212,001)Balance at 31 December

23. RETAINED EARNINGS The details are as follows:

2016 2017JD JD

15,354,418 18,814,955 Balance at the beginning of the year

10,908,035 7,810,209Profit for the year

(2,447,498) (2,013,991)Transfers to reserves

(5,000,000) (7,000,000)Dividends*

18,814,955 17,611,173 Balance at the end of the year

• Retained earnings includes an amount of JD 1,134,764 representing deferred tax assets as at 31 December 2017 (2016: JD 1,358,687) and according to the Central Bank of Jordan this amount is restricted from use.

• Retained earnings include a restricted amount of JD 48,831, which represents the effect of the early adoption of IFRS 9, except for the amounts realized through the actual selling of the respective assets, including capitalization or distribuion.

* In its ordinary meeting held on 26 April 2017, the general assembly approved the distribution of cash dividends for the year 2016 with a percentage of 7% from paid in capital.

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

104|

24. INTEREST INCOMEThe details are as follows:

2016 2017JD JD

Retail:

4,335,8986,581,139Loans and bills

94,10368,729 Credit cards

5,461,1964,762,649Real estate loans

Corporate:

3,853,8793,674,887Overdrafts

10,242,47115,602,991Loans and bills

SMEs:

1,007,029725,937Overdrafts

2,481,3492,259,256Loans and bills

5,523,8645,927,146Government and public sector

2,862,9761,586,529Balances at Central Bank of Jordan

1,087,1961,067,776Balances at banks and financial institutions

18,982,47222,507,826Financial assets at amortized cost

55,932,43364,764,865Total

25. INTEREST EXPENSE The details are as follows:

2016 2017JD JD

753,267685,771Banks and financial institution deposits

28,898,20338,481,154Customers deposits:

657,636616,410Current accounts and demand deposits

12,931151,234Saving accounts

28,045,77237,514,177Time deposits

181,864199,333Certificates of deposits

3,358,4713,599,765Margin accounts

87,23590,127Loans and borrowings

2,143,0482,242,127Deposit guarantee fees

35,240,22445,098,944Total105

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

26. NET COMMISSION INCOMEThe details are as follows:

2016 2017JD JD

Commission income:

1,341,017677,099Direct credit facilities commissions

1,251,395695,854Indirect credit facilities commissions

73,39784,147Brokerage Company commissions

2,665,8091,457,100Net Commission income

27. GAINS FROM FOREIGN CURRENCIESThe details are as follows:

2016 2017JD JD

255,904268,565 From transaction

672,931652,834From revaluation

928,835921,399Total

28. OTHER INCOMEThe details are as follows:

2016 2017JD JD

341,175345,447Credit cards commissions

258,648235,500Outgoing and incoming transfers commissions

12,63112,457Certified checks commissions

19,07119,403Checks under collection commissions

86,931108,403Salary transfers commissions

126,755197,219Returned checks commissions

20,54024,130Safety deposit boxes commissions

35,13136,571Check books commissions

4,3093,804Phone, fax, water and electricity commissions

148,05561,077Gain from redemption of written off debts

35,20142,234 Gain from sale of seized assets

23,24725,905Dormant accounts commission

23,981-Commissions from private banking products

318,994345,093Accounts management fees

461,228622,546Other revenue

1,915,8972,079,789Total

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

106|

29. EMPLOYEES EXPENSESThe details are as follows:

2016 2017JD JD

4,737,2205,024,879Employees’ salaries and benefits

500,138542,119Bank’s contribution to social security

261,781257,923Medical expenses

57,23062,721Employees training

24,26531,777Travelling per diem

15,51315,697Life insurance

41,00642,657Others

5,637,1535,977,773Total

30. OTHER EXPENSESThe details are as follows:

2016 2017JD JD

257,180312,304 Insurance

512,238606,249 Electricity and water

10,01422,188Vehicles

19,20131,789 Transportation

57,98159,200Board of Director transportation

285,828285,968 Maintenance

513,076596,967 Computer

159,535167,171 Stationary and printing

67,00569,303 Hospitality

56,04852,349Donations

37,819117,812 Money transfer

1,950755 Real estate

2,8552,042 Books and magazines

437,033430,924 Rent

113,838110,264Consultation and lawyer fees

65,840145,840Professional fees

114,880129,260Other consulting fees

107

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

609,826625,543 Telephone and fax

433,454430,912 Media and advertising

199,311259,781Taxes and license fees

1574,192Losses from sale of property and equipment

115,642144,942Private subscriptions

228,754150,791Governmental subscriptions

57,43660,405 Security

90,63889,478Board of director remunerations

183,181130,333Legal fees

1,8312,078Investor guarantee fund

20,31773,160Others

4,652,8685,112,000Total

31. BASIC AND DILUTED EARNINGS PER SHAREThe details are as follows:

2016 2017JD JD

10,908,0357,810,209Profit for the year (JD)

100,000,000100,000,000Weighted average number of shares during the year

JD/FilsJD/Fils

0/1090/078Basic and diluted earnings per share attributable to the bank’s shareholders

32. CASH AND CASH EQUIVALENTSThe details are as follows:

2016 2017JD JD

142,927,198104,736,046Cash and balances with central bank maturing within 3 months

96,822,68863,860,393maturing within 3 months Add: Balances at banks and financial institutions

(39,392,864)(13,802,283)Less: Banks and financial institutions’ deposits maturing within 3 months

(3,545,000)(3,545,000)Less: restricted balances

196,812,022151,249,156Total

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

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33. RELATED PARTY TRANSACTIONSThe accompanying consolidated financial statements include the Bank and the following subsidiary:

Company’s capital 2016 2017Ownership

JD JD percentage % Company name

-5,000,000100Societe Generale Jordan Leasing Company

750,000750,000100Societe Generale Brokerage Company

The Bank entered into transactions with major shareholders, Board of Directors, and executive management and their related subsidiaries within the ordinary course of business at commercial interest rates and commissions. All the facilities granted to related parties are performing and no provisions have been provided for.

The following table represents the summary of the transactions that took place during the year with related parties:

TotalRelated party

31 December 2016

31 December 2017

Others(Employees and their ,relatives board of

directors andexecutive

management(relatives

ExecutiveManagementSubsidiary

Board ofDirectors

Parentcompany Societe)General bank –

(LebanonJDJDJDJDJDJDJD

Statement of financial position items:

13,458,77614,622,13612,356,0391,433,369-832,728- Direct credit facilities

3,222,3752,406,3961,112,85111,493808,059450,88923,104Deposits at Bank

3,214,8883,106,9163,084,09217,678-5,146- Margin accounts

66,280,32336,719,881----36,719,881 Bank deposits with

related parties

Off balance items:

1,788,2541,000,059317,8004,000150,00047,580480,679Indirect credit facilities

Statement of income items:

1,131,1321,291,952611,59840,937-57,609581,808 Interest and

commission income

279,830233,572169,22711049,75914,4724 Interest and

commission expense

Debit interest rates on credit facilities in Jordanian Dinar range between 1% - 17%Debit interest rates on credit facilities in foreign currency range between 3.3 % - 6.25 % Credit interest rates on deposits in Jordanian Dinar range between 0.05% - 7.75%

Credit interest rates on deposits in foreign currency range between 0.01 % - 4 %109

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

Compensation of the key management personnel is as follows: 2016 2017

JD JD

1,084,4311,138,413Benefits (Salaries, wages and bonuses) of key executive Management

34. PROPOSED DIVIDENDSIn its meeting held on 21 February 2018, the board of directors approved the distribution of cash dividends for the year 2017 of 7.5% of the paid in capital (which amounts to JD 7.5 millions) and are subject to the approval of the Central Bank of Jordan and the general assembly.

35. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES THAT ARE NOT PRESENTED AT FAIR VALUEFor financial assets and liabilities that are measured at fair valueSome financial assets and liabilities are measured at fair value at the end of each financial period , the following table shows how the value of these financial assets and liabilities has been determined

intangible andfair value

Important intangibleinputs

Valuation method and inputs used

Fair valuehierarchy 2016 2017

JD JD

Assets / Liabilities

Assets are measured at fair value through other comprehensive income

Not applicable Not applicable

Prices published in financial

markets

Level1354,694195,694 Quoted stocks

Not applicableNot applicableUnobservable

inputsLevel3124,085325,698 Unquoted stocks

478,779521,392 Total

478,779521,392 Total financial assets thatare measured at fair value

There was no transfers between level one and three during the year ended 31 December 2017 and year end 31 December 2016.

20162017Fair valueBook valueFair valueBook value

245,940,397245,940,397196,339,528196,113,512 Cash and balances at CBJ Balances at banks and financial &institutions

450,271,082440,892,658456,791,462460,400,111Financial assets at amortized cost

569,995,101568,214,647652,521,832650,649,448Direct credit facilities - net

44,520,78644,392,86414,891,45314,815,157 Banks and financial institutions’deposits

1,006,053,1271,001,027,2111,088,821,9001,081,981,986Customers’ deposits

88,589,21588,168,88088,989,61788,545,916Margin accounts

17,357,74017,307,12315,255,03915,216,312Loans and borrowings

Fair valuerelationship between

Important inputs

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

110|

36. RISK MANAGEMENT POLICIESThe Bank maintains strong risk management environment and a balanced exposure between risks and returns that aims to achieve on the whole portfolio level and on each division of work separately.

The interaction between Bank's activities and the diversity of products and services provided requires definition, measurement, aggregation, risk management and effective allotment of capital to achieve the typical standard of returns against risks. The Bank manages the risks exposed to in an organized, standardized and transparent mode through risk policy which formulates the comprehensive risk management as a fundamental part of organization chart, in addition through the risk measurement and control procedures.

Characteristics of Bank comprehensive risk management policy:

• The Bank's board of directors provides guidance and vision of risk management.

• Risk management is a main procedure in the Bank and is considered a major duty of all employees.

• Risk management in the Bank is independent from the other Bank divisions.

• Internal audit section or function of the Bank presents reports to the Bank’s audit committee and provides independent opinion on the adherence of each division with risk management policies and procedures in addition to the efficiency of risk management in all divisions.

• Risk management assist and support the top management in the control and the effective management of risks that the Bank faces. The following are the main responsibilities of risk management:

• Ensuring that the general strategy of the Bank is consistent with the acceptable risk levels set by the Bank’s board and executed by the top management, as well as the risk policies, procedures, and methods coincide with Bank's acceptable risk levels.

• Assessing and analysing the Bank’s risks profile through developing and applying risk control process.

• Creating and developing clear standards to define and limits to each type of risks.

• Developing and elaborating methods to measure each type of risks.

• Providing recommendations of strategies and procedures that must be adopted to reduce the risks.

• The Bank applies Basel III principles and related Central Bank of Jordan directives concerning risk management framework, as follows:

1. The Bank applies capital adequacy approach within the Basel III framework which sets the standards to calculate capital adequacy ratio and maintain the minimum level of required capital to cover credit risks, market risks (standardized approach), and operational risks (basic indicator approach).

2. During 2017 the Bank applied stress testing within the Basel II pillar 2 framework, these tests aim to reinforce risks definition and management operations and provide risk management tools that comprehend other risk management tools to enhance capital management and liquidity of the Bank.

3. The Bank has developed written policies and procedures verifying the principles that will be adopted by the Bank regarding Internal Capital Assessment Adequacy Process (ICAAP), which aims to develop and use better tools to manage the risk in addition to measure and assess the capital adequacy level capability to assimilate overall risks on the Bank.

Risk measurements and reporting methods:

The Bank measures and classifies risks and its effects on the Bank results regularly and according to risk type.

Credit Risks

Credit risk is the risk that other obligor (borrower) is unable to meet its financial obligations to the Bank (lender) which may result in losses.

Credit Risk Management Strategy:

The Board of Directors defines credit risk management strategy of the Bank and adopt the credit risk policies to ensure that risks are at acceptable level, which reflects the ability to handle risks by Bank's Board of Directors compared to the expected future returns.Risk management model rely on a secure autonomy and assurance of right evaluation process and supervision and providing credit risk reports consistent with the policies and authorities limits which provide guidelines to

111

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

daily management of risk exposures.

The objective of credit policy of the Bank is to create strong risk management based on policies and procedures that determine the Bank lending activities and its main objective is to achieve highly credible and efficient financial results. The permanent procedures in the credit policy guideline require full review of all credit departments recommendations by every credit control and administrative division before it is presented to the specific credit committee and when nec-essary, securities are requested against the credit facilities to mitigate the risk of related credit.

Credit risk management structure:

Top management follows the Board of Directors’ strategy with regard to credit risk management in ad-dition to preparing the roles and the procedures to determine, evaluate, monitor, and control credit risk.

Credit risk management structure includes several executive committees, which are responsible to discuss the credit risk analysis reports of the Bank’s portfolio as follows:

Risk committee on Board of Director's level: discusses risk reports including credit risk report, and present the report to the risk committee members of the Board.

Credit risk committee: discusses credit risk report on top management level regarding the assets of the portfolio and its distribution among borrowers, economic sectors, internal credit ratings, and facility types, in addition to nonperforming portfolio and the updated actions taken in the legal cases against clients and other related risk subjects.

Sensitive risk committees: several meetings held on different management levels based on credit exposure of clients, who have reflected weakness indicators or are related to a particular eco-nomic sector with high instability and bad indicators.

Main characteristics of credit risk management:

Risk management process is based on the relationship and interference between:

Plans and strategies of the Bank’s portfolio: portfolio plans and strategies are set based on the required fi-nancial results and the desired return combined with the acceptable risk level to the Bank, at the same time, these plans and strategies are designed at each unit level as required and are based on the approved limits and concentration for each unit to achieve the overall expected return within the acceptable risk level.

Credit granting, renewal, increase, modification and control: Each unit grant, evaluate and manage its related credit portfolio according to the plans and strategies of the unit and in accordance with the return and required risk level through market and economic studies in addition to analyzing the borrower’s related financial state-ments and management and other measurements, thus making a credit decision and deciding on the type of collaterals required. Consequently, each borrower will be classified within the rating system of the Bank.

Performance evaluation and reporting: a periodic evaluation at each unit level and at the Bank’s credit port-folio level to assess the efficiency and accuracy of plans and strategies execution and goals achievement and results of each unit of the Bank separately. In addition the Bank’s portfolio is evaluated by its distribution among economic sectors, borrowers, rates, periods, products, collaterals and other basis.

Periodic review on companies’ internal rates is performed by the Bank’s risk management in accordance with the specialized management; the rating is modified constantly according to clients' credit record and developments of financial situation and the economic activity based on the risk degree the Bank is exposed to through this relationship. Taking into consideration that all credit policies, programs and new measure-ments of assets quality, are reviewed and approved by credit risk management committee; which includes premier members in business and risk management.

Credit risk monitoring:

The Bank’s exposure is monitored constantly through the early identification systems of possible changes in creditworthiness of the customers which aims to detect any negative indicator that may lead to a potential loss in the quality of the credit risk. The early identifications is being done through periodic credit reports which is presented to the top management and it is also used to reassess the customer’s financial position for renewal purposes or major changes in the customer financial position to enable the management to take the right action on time.

Credit risk mitigation:

The variation of credit portfolio is a major factor of the Bank’s strategy to mitigate credit risk through distribution of credit portfolio based on borrower type, economic sector of borrowers and other factors which guarantee the highest level of returns within acceptable risk to the Bank. In addition, risk mitiga-

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

112|

tions are used such as obtaining collaterals and guarantees which are considered effective factors to miti-gate this type of risk within the Bank’s portfolio, these collaterals are controlled and monitored constantly.

Credit risk concentration:

Credit risk concentration arises when groups of parties in similar commercial activity, within the same geographical area, or with the same economic characteristics, affect the ability to meet their commit-ments in case of economic, political or other changes.

The Bank seeks to manage the concentration risk through diversifying its credit activities to avoid high concentration of unacceptable risk of individuals or group of clients or particular business sector and through spreading the portfolio to avoid any possible losses.

1. Credit risk exposures (Net of the provision for impairment losses and interest in sus-pense and before collaterals and other risk mitigations).

2016 2017JD JD

Consolidated statement of financial position items:

133,902,51399,000,958 Cash and balances at Central Bank

96,822,68863,860,393Balances at banks and financial institutions

15,215,19633,252,161Deposits at banks and financial institutions

568,214,647650,649,448Credit facilities:

61,345,05758,047,917Consumer

105,157,954131,708,149Real estate Loans

225,543,174291,402,594Corporate lending

49,189,68741,663,930(Small and medium enterprises (SME’s

126,978,775127,826,858 Government and public sector

440,892,658460,400,111Bonds and treasury bills

314,489,658273,310,111 Included in financial assets at amortized cost

126,403,000187,090,000Included in pledge financial assets

7,790,9278,765,490Other assets

1,262,838,6291,315,928,561Total consolidated statement of financial position items

Contingent liabilities

61,496,56256,189,080Letters of guarantee

10,506,80012,721,097Letters of credit

5,816,9029,531,254Acceptances

75,932,70299,000,402Unutilized credit facilities

153,752,966177,441,833 Total contingent liabilities

1,416,591,5951,493,370,394 Total consolidated statement of financial position items andcontingent liabilities

- The table above shows the maximum exposure of credit risk as at 31 December 2017 and 2016 without taking into consideration the collaterals and credit risk mitigations.

- Regarding assets items that are included in the consolidated statement of financial position, the above exposure is based on the balance as it appears in the consolidated statement of financial position.

113

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

2. Credit exposures are distributed by the level of risks according to the following table:

TotalOther Banksand Financial

institutions

Government and public

sectorSMEsCorporateReal Estate

LoansConsumer2017JDJDJDJDJDJDJD

722,578,195-684,306,8435,169,50021,352,7532,912,9068,836,193Low risk

574,765,22297,322,462-29,706,027279,633,467121,557,77346,545,493 Acceptable risk

7,466,692-5,568,272623,570859,234174,344241,272*Maturing

Up to 30 days

4,266,867--17,6284,049,65399,017100,569From 31 to 60 days

14,303,191--4,253,5381,620,5396,127,4462,301,668 Watch list

28,762,735--10,763,937509,5003,866,04913,623,249Non performing:

1,259,458--28,422-592,969638,067Substandard

3,227,339--1,955,716-382,084889,539Doubtful

24,275,938--8,779,799509,5002,890,99612,095,643Loss

1,340,409,34397,322,462684,306,84349,893,002303,116,259134,464,17471,306,603Total

13,688,353--4,488,373-1,545,9027,654,078 Less: Interest insuspense

10,792,430--3,740,699534,2911,053,9845,463,456 Less: Allowance forimpairment losses

1,315,928,56097,322,462684,306,84341,663,930302,581,968131,864,28858,189,069Net

* If one instalment becomes due, the whole balance is considered due, while the overdraft account is considered due if the balance exceeds the ceiling.

- Credit exposures include credit facilities, balances and deposits at banks, bonds, treasury bills and any other assets exposed to credit risk.

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

114|

TotalOther Banksand Financial

institutions

Government and public

sectorSMEsCorporateReal Estate

LoansConsumer2016JDJDJDJDJDJDJD

739,501,998-697,698,01821,561,2117,840,2317,644,5834,757,955Low risk

510,283,324112,415,444-53,990,639196,163,08386,508,61661,205,542 Acceptable risk

747,402--40,83579,834553,01373,720*MaturingUp to 30 days

467,031--228,592133,37245,47259,595From 31 to 60 days

9,437,967--550,4322,976,5242,673,9573,237,054 Watch list

23,954,816--8,764,115-3,260,67711,930,024Non performing:

732,475----315,936416,539Substandard

3,230,827--1,943,023-651,256636,548Doubtful

19,991,514--6,821,092-2,293,48510,876,937Loss

1,283,178,105112,415,444697,698,01884,866,397206,979,838100,087,83381,130,575Total

11,226,426--3,328,327-1,276,2936,621,806 Less: Interest insuspense

9,113,050--3,158,63045,747873,3745,035,299 Less: Allowance forimpairment losses

1,262,838,629112,415,444697,698,01878,379,440206,934,09197,938,16669,473,470Net

The following is the distribution of the fair value of collateral against credit facilities (risk mitigations):

TotalSMEsCorporate

Real estateloansConsumer2017

JDJDJDJDJD

Collaterals

38,711,8494,857,40721,352,7535,643,5596,858,130Low risk

166,959,2937,702,09038,794,45999,296,56521,166,179Acceptable risk

7,600,6394,139,217-3,195,055266,367:Non performing

1,080,11740,973-1,001,06538,079Substandard

2,132,8231,617,252-493,67821,893Doubtful

4,387,6992,480,992-1,700,312206,395Loss

213,271,78116,698,71460,147,212108,135,17928,290,676Total

38,711,8494,857,40721,352,7535,643,5596,858,130Cash collateral

142,148,29311,075,65323,507,505102,463,6205,101,515Real estate

13,459,687455,6541,744,925-11,259,108Vehicles and machinery

18,951,952310,00013,542,02928,0005,071,923Shares

213,271,78116,698,71460,147,212108,135,17928,290,676Total

115

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

TotalSMEsCorporate

Real estateloansConsumer2016

JDJDJDJDJD

Collaterals

41,803,98021,561,2117,840,2317,644,5834,757,955Low risk

126,811,3179,467,18721,882,97380,948,98114,512,176Acceptable risk

7,064,2434,362,282-2,555,985145,976Non performing:

575,259--570,8424,417Substandard

2,499,7191,682,052-797,11820,549Doubtful

3,989,2652,680,230-1,188,025121,010Loss

175,679,54035,390,68029,723,20491,149,54919,416,107Total

41,803,98021,561,2117,840,2317,644,5834,757,955Cash collateral

121,748,24712,986,06221,780,58483,504,9663,476,635Real estate

12,127,313843,407102,389-11,181,517Vehicles and machinery

175,679,54035,390,68029,723,20491,149,54919,416,107Total

Rescheduled Debts:

Are defined as debts that were classified as “non-performing” facilities, and subsequently removed and included under "Watch List" based on proper rescheduling. Total rescheduled debts amounted to JD 4,858,565 as at 31 December 2017 (2016: JD 2,324,193).

The outstanding balance of the rescheduled debts represents loans that are classified under watch list or transferred to performing facilities.

Restructured Debts:

Restructuring is the rearrangement of credit facilities in terms of instalments, extending the term of credit facilities, deferment of instalments, or extending the grace period. Accordingly, those facilities are classi-fied as "Watch List". Total restructured debts amounted to JD 12,906,000 as at 31 December 2017 (2016: JD 6,557,422).

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

116|

3. Bonds and treasury bills:The following table illustrates the classifications of bonds and treasury bills according to the external classification institutions as at 31 December 2017 and 2016:

TotalPledged Financial assets

Financial assets at fair value

through Profitor loss

Financial assets atamortized cost

Financial assets at fair value through other

comprehensive income

Classification degrees:

2017JDJDJDJD JD

450,795,829187,090,000-263,705,829-Governmental

9,604,282--9,604,282-Unclassified

460,400,111187,090,000-273,310,111-Total

TotalPledged Financial assets

Financial assets at fair value

through Profitor loss

Financial assets atamortized cost

Financial assets at fair value through other

comprehensive income

Classification degrees:

2016

JDJDJDJD JD

431,282,106126,403,000-304,879,106-Governmental

9,610,552--9,610,552-Unclassified

440,892,658126,403,000-314,489,658-Total

4. Concentration in credit exposures according to the geographic distribution, as follows:

TotalOthersAmerica* AsiaEurope

OtherMiddle East

countriesInside

Jordan

99,000,958-----99,000,958 Cash and balances atcentral bank

97,112,5541,6605,983,49232,16023,369,25656,398,98611,327,000 Balances at banks andfinancial institutions

650,649,448-----650,649,448Credit facilities:

58,047,917-----58,047,917 Consumer

131,708,149-----131,708,149Real estate loans

291,402,594-----291,402,594Corporate

41,663,930-----41,663,930Small and medium enterprise (SME’s)

127,826,858-----127,826,858 Government and publicsector

460,400,111-----460,400,111Bills and treasury bonds:

273,310,111-----273,310,111 Included in financial atamortized cost assets

187,090,000-----187,090,000 Included in pledgedfinancial assets

8,765,490-----8,765,490Other assets

1,315,928,5611,6605,983,49232,16023,369,25656,398,9861,230,143,007Total 2017

1,262,838,6299,027399,93831,27512,947,30383,018,4121,166,432,674Total 2016

* Except for Arab countries.

Societe Generale De Banque – jordanie Consolidated Statement of Financial Position At 31 December 2017

5. Concentration in credit exposures according to economic sector is as follows:TotalOthers

Governmentand public

sectorIndividualsStocksAgricultureReal estateCommercialIndustrialFinancial2017

JDJDJDJDJDJDJDJDJDJDItem / economic sector

99,000,958-99,000,958------- Cash and balances at

Central Bank

97,112,554--------97,112,554 Balances at banks and

financial institutions

650,649,448-127,826,858112,904,63123,230,9821,929,505136,747,064136,838,50873,811,82037,360,080Credit facilities

58,047,917--45,909,8055,332,149-1,857,0944,858,23590,634-Consumer

131,708,149--433,469--120,151,8681,587,4587,635,3541,900,000Real estate loans

291,402,594--59,709,39617,898,8331,833,0976,279,797107,461,64163,144,42435,075,406Corporate

41,663,930--6,851,961-96,4088,458,30522,931,1742,941,408384,674 Small medium

(enterprises(SME

127,826,858-127,826,858------- Government & public

sector

460,400,111-450,795,829----9,604,282-- Bills and treasury

:bonds

273,310,111-263,705,829----9,604,282-- Included in financial assets at amortized

cost

187,090,000-187,090,000------- Included in pledge

financial assets

8,765,4908,765,490--------Other assets

1,315,928,5618,765,490677,623,645112,904,63123,230,9821,929,505136,747,064146,442,79073,811,820134,472,634Total 2017

1,262,838,62943,615,679692,163,394116,010,402-845,03260,492,145146,732,69870,795,616132,183,663Total 2016

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Market RisksMarket risks arise from fluctuations in interest and exchange rates in addition to stock prices. The level of tolerated risk values is set by the Board of Directors.

The Bank works towards managing and mitigating these market risks through establishing a specialized and independent unit for this purpose holding the responsibility of managing the above mentioned risks. Additionally, the bank established the necessary policies and procedures in this respect since the duties of the market risk unit is represented in managing the Bank’s assets and liabilities in foreign currencies, in addition to monitoring all related operations in foreign currencies, ensuring that they are within the limits specified by management and reporting any exceed of limits in case of occurrence.

The Bank’s adopted policy is not to take any open positions or execute any operations for its own account only in excep-tional cases subject to the Board of Directors approval, therefore most investment operations are done on behalf of the Bank’s clients as the Bank acts only as an investment broker. Furthermore, the general rule of the Bank is not to have any open positions with amounts exceeding the limits specified by management in any foreign currency.

The Bank’s positions in foreign currencies are subject to daily monitoring by the market risk unit within the specified limits, and ensuring that such positions are being closed on a daily basis. Furthermore, the Bank does not keep any investment portfolios, in international stocks, precious metals or any other investment instruments related to financial derivatives. The Bank’s investments are limited to public debt instruments issued by the Central Bank of Jordan and money market instru-ments with fixed return.

Interest rate risk:Interest rate risks arise from the possibility of changes in interest rates affecting the value of financial instruments. The Bank is exposed to interest rate risks due to the inconsistency or gap in the various maturity terms of assets and liabilities or the re-evaluation of interest rates within a certain time period. The Bank manages such risks by reviewing the interest rates on assets and liabilities through the assets and liability committee in the bank.

The consolidated statement of income sensitivity is represented by the impact of the potential assumed changes in interest rates on the Bank's profit for one year, which is calculated on the financial assets and liabilities that have a variable interest rate as at 31 December 2017 and 31 December 2016.

31 December 2017:

Sensitivityof net Owner's equity

JD

Sensitivityof net interestincome (loss)

JD

Increase ininterest ratePercentage

Currency

192,482192,4821%US Dollar

(140,799)(140,799)1%Euro

(1,321)(1,321)1%Other

31 December 2016:

Sensitivityof net Owner's equity

JD

Sensitivityof net interestincome (loss)

JD

Increase ininterest ratePercentage

Currency

(66,180)(66,180)1%US Dollar

8,5748,5741%Euro

(584)(584)1%Other

In the event of an opposite change in the indicator, the effect will be equal to the change above, however, with an oppo-site sign.

Currency riskForeign currency risks are the risks associated with changes in the value of financial instruments as a result of fluctuations in the foreign currency rates. The Bank sets the limits for the financial positions on every currency within the Bank invest-ment policy. Foreign currency positions are subject to daily monitoring by the market risks unit and the treasury depart-ment are provided with all outstanding currency positions on a daily basis for the purposes of monitoring and hedging against currency rates changes ensuring that timely decisions are being made.

The Bank adopts a prudent policy with respect to trading and maintaining open positions in foreign currencies by not holding any long or short positions within its portfolios. Accordingly, the associated risks are considered low with no nega-tive effects resulting from the change in exchange rates or the change in the value of financial instruments due to fluctua-

Societe Generale De Banque – jordanie Consolidated Statement of Financial Position At 31 December 2017

119

tions in foreign currency rates, taking into consideration that the Jordanian Dinar is the primary currency of the Bank.

The following table illustrates the effect of a reasonable possible change in the exchange rate of the Jordanian Dinar against foreign currencies on the consolidated statement of income, with all other effective variables unchanged:

Sensitivityof net Owner's equity

Effect onProfits and Losses

Change inexchange rate31 December 2017:

JDJDPercentageCurrency

(364)(364)5%Euro

(1,376)(1,376)5%Others

Effect onowner's equity

Effect onProfits and Losses

Change inexchange rate31 December 2016:

JDJDPercentageCurrency

(1,054)(1,054)5%Euro

(1,841)(1,841)5%Others

In the event of an opposite change in the indicator, the effect will be equal to the change above, however, with an opposite sign.

Societe Generale De Banque – jordanie Consolidated Statement of Financial Position At 31 December 2017

120|

Stocks price risk:Risks of changes in stock prices result from the change in the fair value of stock investments.

The following table indicates the sensitivity of the accumulated change in the fair value due to the rea-sonable possible changes in stock prices, with all other effective variables unchanged.

31 December 2017

Effect on owner's

equity

Effect on Profits and Losses

ChangeIn indicator

(9,785)-(5%) Amman StockExchange Index

31 December 2016

Effect on owner's

equity

Effect on Profits and Losses

ChangeIn indicator

(17,735)-(5%) Amman StockExchange Index

In the event of an opposite change in the indicator, the effect will be equal to the change above, how-ever, with an opposite sign.

121

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

Sensitivity of interest rates is as follows:

TotalNon-interestbearing

3 or more years

1 – 3 years6 – 12

months3 – 6

months1 – 3 months

Less than 1 month2017

JDJDJDJDJDJDJDJD

104,736,04675,823,424-----28,912,622Cash and balances at

central bank

63,860,3938,345,794----20,826,39434,688,205Balances at banks

and financial institutions

33,252,161--17,725,0002,127,00013,400,161--Deposits at bank and financial institutions

650,649,448-1,780,349357,05145,842648,180,2639,885276,058Direct credit facilities, net

521,392521,392------

Financial asset at fair value through

other comprehensive income

273,310,111-211,121,78434,182,85820,001,1418,004,328--Financial asset at amortized cost

187,090,000-187,090,000-----Pledged finance al assets

22,492,72022,492,720------Property and equipment, net

1,279,5711,279,571------Intangible assets, net

1,134,7641,134,764------Deferred tax assets

13,724,71713,724,717------Other assets

1,352,051,323123,322,382399,992,13352,264,90922,173,983669,584,75220,836,27963,876,885Total Assets

Liabilities

14,815,157872,073--1,012,874-4,254,0008,676,210Banks and financial institution deposits

1,081,981,98680,691,661-20,789,065325,013,335197,530,033146,594,341311,363,551Customers’ deposits

88,545,916--1,339,1258,742,8805,331,48011,554,36761,578,064Margin accounts

15,216,312-6,471,2683,317,631680,6532,712,0462,014,00020,714Loans and borrowings

46,50046,500------Other provisions

2,808,9232,808,923------Income tax provision

404,959404,959------Deferred tax liabilities

14,139,54914,139,549------Other liabilities

1,217,959,30298,963,6656,471,26825,445,821335,449,742205,573,559164,416,708381,638,539 Total liabilities andshareholders’ equity

134,092,02124,358,717393,520,86526,819,088(313,275,759)464,011,193(143,580,429)(317,761,654)Interest rate sensitivity gap

2016

1,303,175,615126,987,158354,071,74355,994,60813,112,115575,828,67651,901,892125,279,423Total Assets

1,169,734,802222,619,1617,426,4275,279,323118,734,545240,040,273201,142,891374,492,182Total Liabilities

133,440,813(95,632,003)346,645,31650,715,285(105,622,430)335,788,403(149,240,999)(249,212,759)Interest rate sensitivity gap

Societe Generale De Banque – jordanie Consolidated Statement of Financial Position At 31 December 2017

122|

Concentration in foreign currencies risk:

TotalOtherJapaneseYen

SterlingPoundEuroUS DollarItem / Currency

JDJDJDJDJDJDAssets

2017

7,171,1302,025-9571,518,3085,649,840Cash and balances at central bank

87,912,5536,593,44832,1601,455,3639,231,52770,600,055Balances at banks and financial institutions

36,919,4397--43,73636,875,696Direct credit facilities, net

16,037,188----16,037,188Financial asset at amortized cost

540,8573,193-3415,170522,460Other assets

148,581,1676,598,67332,1601,456,35410,808,741129,685,239Total Assets

Liabilities

13,963,7616,549,210--1,022,3196,392,232Banks and financial institution deposits

115,114,04618,12726,1211,448,3306,518,161107,103,307Customers’ deposits

6,118,100---526,8315,591,269Margin accounts

2,659,859---2,659,859-Loans and borrowings

647,8933,810-22,57088,847532,666Other liabilities

138,503,6596,571,14726,1211,470,90010,816,017119,619,474Total Liabilities

10,077,50827,5266,039(14,546)(7,276)10,065,765 Net concentration in statement of financialposition

37,234,733313,139-86,7617,392,17329,442,660 Contingent liabilities off statement of financialposition

123

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

TotalOtherJapaneseYen

SterlingPoundEuroUS DollarItem / Currency

JDJDJDJDJDJDAssets

2016

11,244,436--36,4594,149,1937,058,784Cash and balances at central bank

96,037,8836,271,29031,2751,032,29723,132,57965,570,442Balances at banks and financial institutions

26,063,9488--23,10826,040,832Direct credit facilities, net

12,640,258----12,640,258Financial asset at amortized cost

648,0791,165-1412,438634,462Other assets

146,634,6046,272,46331,2751,068,77027,317,318111,944,778Total Assets

Liabilities

6,220,215--16,325,42416,310,388Banks and financial institution deposits

90,360,0977,06425,2331,004,0597,223,20482,100,537Customers’ deposits

6,147,822--39,080365,8925,742,850Margin accounts

3,244,719---3,244,719-Loans and borrowings

1,562,31814,417-25,626136,9881,385,287Other liabilities

140,170,9836,241,69625,2331,068,76527,296,227105,539,062Total Liabilities

6,463,62130,7676,042521,0916,405,716 Net concentration in statement of financialposition

43,832,31556,691-34,2942,545,89641,195,434 Contingent liabilities off statement of financialposition

Liquidity riskLiquidity risks is represented by the Bank’s lack of ability in providing the necessary funding required to meet its liabilities when they come due. To avoid such risks, the management diversifies its sources of funding by managing its assets and liabilities through matching their maturity/due dates and maintaining a sufficient balances of cash, cash equivalents, and available for trade securities. In addition, the process of liquidity control and management involves the analysis of the maturity dates of assets and liabilities in a continuous and integrated manner.

Diversification of Funding SourcesThe Bank’s Management diversifies the funding sources by concentrating on medium and long terms sources through issuing certificates of deposit at competitive interest rates covering all sectors.

Follow up on the maturity term analysis of assets and liabilities

The Bank examines the liquidity of the terms of its assets and liabilities taking into consideration the gaps that may affect liquidity.

Geographic and Sector DistributionThe Bank pays attention to the diversification in distributing its assets and liabilities on various sectors and geo-graphic areas while harmonizing between corporate and individual client sectors leading to a diversification in the sources of funding and variation of entitlements.

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

124|

Cash reserves with the banks’ authority

The Bank maintains a compulsory cash reserve with the banks’ authorities amounting to JD 70,066,439 .

Compliance with the liquidity ratios set by the banks’ authorities

The Bank periodically reviews the liquidity ratios and their conformity to the current and effective regulations.

First: the table below summarizes the liability distribution (undiscounted) on the basis of the remaining period to the contractual maturity at the date of the consolidated financial statements:

Total Withoutmaturity

3 or moreyears

1 – 3years

6 – 12months

3 – 6 months

1 – 3 months

Less thanmonth 12017

JDJDJDJDJDJDJDJD

Liabilities

14,815,157872,073--1,012,874-4,254,0008,676,210Banks and financial institution deposits

1,081,981,986136,623,307-20,789,065325,013,335197,530,033146,594,341255,431,905Customers’ deposits

88,545,916--1,339,1258,742,8805,331,48011,554,36761,578,064Margin accounts

15,216,312-6,471,2683,317,631680,6532,712,0462,014,00020,714Loans and borrowings

46,50046,500------Other provisions

2,808,9232,808,923------Income tax liabilities

404,959404,959------Deferred tax liabilities

14,139,54914,139,549------Other liabilities

1,217,959,302154,895,3116,471,26825,445,821335,449,742205,573,559164,416,708325,706,893Total Liabilities

1,352,051,323123,322,381761,637,580188,055,64458,360,86854,709,63159,340,057106,625,162Total Assets

Total Withoutmaturity

3 or moreyears

1 – 3years

6 – 12months

3 – 6 months

1 – 3 months

Less thanmonth 12016

JDJDJDJDJDJDJDJD

Liabilities

44,392,864 549,349--5,000,000-4,254,00034,589,515Banks and financial institution deposits

1,001,027,211203,231,088-1,520,545103,325,929231,271,657181,952,901279,725,091Customers’ deposits

88,168,880--2,266,3839,915,2835,156,47810,653,16060,177,576Margin accounts

17,307,123-7,426,4261,492,395493,3333,612,1394,282,830-Loans and borrowings

73,06473,064------Other provisions

5,235,1925,235,192------Income tax liabilities

264,311264,311------Deferred tax liabilities

13,266,15713,266,157------Other liabilities

1,169,734,802222,619,1617,426,4265,279,323118,734,545240,040,274201,142,891374,492,182Total Liabilities

1,303,175,615126,987,161702,675,880157,412,14951,958,43846,153,79767,728,376150,259,814Total Assets

125

Societe Generale De Banque – jordanie Consolidated Statement of Financial Position At 31 December 2017

Second: contingent liabilities:

Total1 – 5 yearsLess than

1 year2017

JDJDJD

22,252,351-22,252,351Letters of credit and acceptances

99,000,402-99,000,402Unutilized facilities

56,189,080238,03755,951,043Letters of guarantee

177,441,833238,037177,203,796Total

2016

16,323,702-16,323,702Letters of credit and acceptances

75,932,702-75,932,702Unutilized facilities

61,496,5623,436,59858,059,964Letters of guarantee

153,752,9663,436,598150,316,368Total

Operational risks Management:Operational risks are represented in the risk of loss due to insufficiency or failure of internal operations work force and regulations which may result from internal or external events.

The Bank works towards managing and reducing operational risks, accordingly, it has established a specialized and independent department concerned in the management of operational risks. Addi-tionally, it has adopted Société Générale Group Policies and procedures regarding this issue.

In this regard, the Bank has enhanced the institutional frameworks that govern the management of operational risks through updating and developing policies and adopting procedures necessary to manage such risks. The department of operational risks manages, identities, measures, controls, and monitors the risk through qualitative and quantitative methods including:

- Documentation of all internal operational risk loss to which the Bank is exposed to and the remedial procedures to ensure no reoccurrence thereof through using a special information recording system (Internal Operational Risk Loss Data Collection).

- Risk Control Self Assessment which involves the assessment of potential losses generated from the Bank’s various activities, which enables us to assess the level of the Bank’s exposure to operational loss.

- Key risk indicators which indicates the most important operational risks sources to which the Bank may be exposed in order to manage them effectively.

Non-compliance Risks:These are the risks of organizational or legal penalties or loss of reputation which the Bank may face due to failure of complying with laws and regulations issued by the regulatory bodies.

The Bank pays special attention to the regulations of the banking supervisory authorities, as it has established a special department and a complete set of written policies and procedures to avoid expo-sure to such risks.

As part of the Bank’s strategy, it has recently applied automated solutions to prevent money launder-ing and avoid implication in such activities which may impair the Bank’s reputation.

Strategic Risks:These are the risks of existing or possible negative effect on the shareholders' rights due to action decisions and improper execution, or lack of awareness and reaction to internal or external changes.

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

126|

Internal control environment:The Board of Directors ensures the existence of control systems and that the internal control is adequate and effective, and follows up on an ongoing basis, where the relevant departments for internal control (continuous, periodic) submit periodic reports to the Audit Committee and Board of Directors to make sure that the Bank's management practice the appropriate control.

Internal control consists of:1. Continuous internal control: a collection of works carried out on an ongoing basis in order to en-sure the security and accuracy of the transactions at the operational level, which includes all depart-ments of the Bank.

The continuous internal control is one of the most important elements approved in the Bank, be-cause it is the first level of internal control, in addition to being one of the requirements of regula-tory bodies locally and internationally which is considered the main pillar to reduce the operational risk through constant monitoring of daily business, also lead to the development and quality of the banking services provided to customers.

2. Periodic internal control: assessing the Bank's commitment to the regulations and procedures as well as evaluating the effectiveness of the systems of control and oversight of the Bank, consist-ing of such control of both the Internal Audit (the second level of internal control), audit of Societe Generale De Banque - Lebanon and Societe Generale group (the third level of internal control).

37. SEGMENT INFORMATIONBusiness segment information

For management purposes the Bank is organised into four major business segments that are meas-ured according to the reports used by the main decision maker at the bank:

Consumer banking: Principally handling individual customers’ deposits and providing consumer type loans, overdrafts, credit cards facilities, funds transfer facilities, and other banking services;

Small and medium enterprises (SMEs): Principally handling deposits, providing services related to credit facilities, and other banking services to the small and medium enterprises.

Corporate banking: Principally handling loans, other credit facilities, deposit, current accounts, and other banking services to corporate and institutional customers;

Treasury: Principally providing money market, trading and treasury services, as well as the manage-ment of the Bank’s funding operations.

127

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

The following are information on the Bank's segments distrusted according to activities:

Total

2017 2016OthersTreasuryCorporateSMEsConsumer

JDJDJDJDJDJDJD

64,527,15970,594,54510,769,00426,073,87811,652,2472,985,19319,114,223Total revenues

(648,719)(1,172,662)--20,956(582,069)(611,549) Impairment loss on direct credit

facilities

28,638,21624,322,939(7,474,072)25,388,107(1,686,474)1,122,8876,972,491Segmental results

(12,078,491)(12,288,922) Unallocatedexpenses

16,559,72512,034,017Profit before tax

(5,651,690)(4,223,808) Income tax

10,908,0357,810,209 Net profit

Other information

1,303,175,6151,352,051,323142,487,347662,770,103291,842,32049,893,002205,058,551Total Assets

1,169,734,8021,217,959,302445,231,35914,815,157354,345,00039,418,120364,149,666Total Liabilities

1,051,5611,425,711 Capitalexpenditure

1,222,1931,354,927Depreciation andamortization

Geographical segment information The following table shows the distribution of the Bank’s operating income, total assets and capital expenditure by geographical segment:

TotalOutside JordanInside Jordan201620172016201720162017

64,527,15970,594,545915,950948,62963,611,20969,645,825Total revenues1,303,175,6151,352,051,32396,037,88485,785,5531,207,137,7311,266,265,770Total assets

1,051,5611,425,711--1,051,5611,425,711Capital expenditure

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

128|

38. CAPITAL MANAGEMENTThe Bank aims to manage capital to achieve the following objectives:

- Compliance with the Central Bank of Jordan on capital requirements.

- Bank's ability to continue as going concern.

- Maintaining strong capital to support the growth and development of the Bank.

The capital adequacy is monitored by the Bank’s management on monthly basis and also providing the Central Bank with information regarding the capital adequacy quarterly.

As instructed by the Central Bank of Jordan, the minimum capital adequacy ratio is equal to 12%. Banks are classified into 5 categories where the best has a rate to 14% or more.

The Bank manages the capital structure and makes the necessary adjustments in light of changes in working conditions; the Bank has not added any amendments to the goals, policies and procedures related to the structuring of capital during the current year.

Regulatory requirements regarding capital adequacy

The following table shows the components of capital, value and total risk-weighted assets and capi-tal adequacy ratio that is measured according to the regulations of the Central Bank of Jordan and based on the instructions of Basel III Committee.

2016 2017Primary capital items ( Tier 1 )

100,000,000100,000,000Paid in capital

10,411,06411,627,577Statutory reserve

100,000100,000Voluntary reserve

11,814,95510,111,173Retained earnings

(53,000)(212,001)Fair value reserve - net

Less:

(1,358,687)(1,134,764)Deferred tax assets

(1,355,256)(1,279,571)Intangible assets - net

119,559,076119,212,414Net Primary capital (Tier 1 )

Supplementary capital ( Tier 2 )

4,167,7944,965,272General banking risk reserve

4,167,7944,965,272Net Supplementary capital (Tier 2 )

123,726,870124,177,686Total regulatory capital

549,821,602640,439,172Total risk weighted assets

22.50%19.39%Capital adequacy (%)

21.75%18.61%Primary capital (%)

8.28%7.86%Financial leverage (%)

129

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

39. MATURITY ANALYSIS OF ASSETS AND LIABILITIESThe table below shows an analysis of assets and liabilities analyzed according to when they are expected to be recovered or settled:

TotalMore than

1 year

Within

1 yearJDJDJDAssets

104,736,046-104,736,046Cash and balances at central bank

63,860,393-63,860,393Balances at banks and financial institutions

33,252,16117,725,00015,527,161Deposits at banks and financial institutions

650,649,448499,573,582151,075,866Direct credit facilities, net

Financial assets at fair value through

521,392-521,392 other comprehensive income

273,310,111245,304,64228,005,469Financial assets at amortized cost

187,090,000187,090,000-Pledged financial assets

22,492,720-22,492,720Property and equipment, net

1,279,571-1,279,571Intangible assets, net

1,134,764-1,134,764Deferred tax assets

13,724,717-13,724,717Other assets

1,352,051,323949,693,224402,358,099Total Assets

Liabilities

14,815,157-14,815,157Banks and financial institution deposits

1,081,981,98620,789,0651,061,192,921Customers’ deposits

88,545,9161,339,12587,206,791Margin accounts

15,216,3129,788,8995,427,413Loans and borrowings

46,500-46,500Other provisions

2,808,923-2,808,923Income tax provision

404,959-404,959Deferred tax liabilities

14,139,549-14,139,549Other liabilities

1,217,959,30231,917,0891,186,042,213Total Liabilities

134,092,021917,776,135(783,684,114)Net

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

130|

TotalMore than

1 year

Within

1 yearJDJDJDAssets

142,927,198-142,927,198Cash and balances at central bank

96,822,688-96,822,688Balances at banks and financial institutions

15,215,196-15,215,196Deposits at banks and financial institutions

568,214,647452,052,159116,162,488Direct credit facilities, net

478,779-478,779Financial assets at fair value through other comprehensive income

314,489,658282,035,87032,453,788Financial assets at amortized cost

126,403,000126,000,000403,000Pledged financial assets

22,346,823-22,346,823Property and equipment, net

1,355,256-1,355,256Intangible assets, net

1,358,687-1,358,687Deferred tax assets

13,563,683-13,563,683Other assets

1,303,175,615860,088,029443,087,586Total Assets

Liabilities

44,392,864-44,392,864Banks and financial institution deposits

1,001,027,2111,520,545999,506,666Customers’ deposits

88,168,8802,266,38285,902,498Margin accounts

17,307,1238,918,8228,388,301Loans and borrowings

73,064-73,064Other provisions

5,235,192-5,238,192Income tax provision

264,311-264,311Deferred tax liabilities

13,266,157-13,266,157Other liabilities

1,169,734,80212,705,7491,157,029,053Total Liabilities

133,440,813847,382,280(713,941,467)Net

131

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

40. CONTINGENT LIABILITIES AND COMMITMENTS The total outstanding commitments and contingent liabilities are as follows:

2016 2017JD JD

10,506,800 12,721,097 Letters of credit

5,816,902 9,531,254Acceptances

61,496,562 56,189,080 Letter of guarantee:

5,635,878 19,320,112 Payments

24,238,909 20,983,936 Performance

31,621,775 15,885,032 Other

75,932,702 99,000,402 Unutilized facilities

153,752,966 177,441,833 Total

41. LAWSUITS Lawsuits raised against the Bank in its ordinary course of business amounted to JD 170,993 as at 31 December 2017 (31 December 2016: JD 232,010). The Bank has provided for those law-suits an amount of JD 46,500 as at 31 December 2017 (31 December 2016: 73,064).

The Bank's management and its legal advisor believe that no additional liability is required in excess of the amount provided for.

42. STANDARDS ISSUED BUT NOT YET EFFECTIVEThe standards and interpretations that are issued but not yet effective, up to the date of issuance of the Bank’s financial statements are disclosed below. The Bank intends to adopt these standards, if applicable, when they become effective.

IFRS 9 Financial Instruments

In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments that replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge accounting. The Bank has implemented the first phase of IFRS 9 as issued during 2009.

The date of initial implementation of the first phase of IFRS 9 was 1 January 2011.

The new version of IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Except for hedge accounting, retrospective application is required; however, the entities are exempted from restating their comparative information.

The Bank plans to adopt the new standard on the required effective date and will not restate com-parative information. During 2017, the Bank has performed a detailed impact assessment of IFRS 9. This assessment is based on currently available information and may be subject to changes arising

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

132|

from further reasonable and supportable information being made available to the Bank in 2018 when the Bank adopts IFRS 9. The Bank expects based on preliminary figures an increase in the loss allowance of around JD 5.5m.

Central Bank of Jordan instructions, dated 25 January 2018, allowed using general risk reserve bal-ance to cover the increase of the allowance resulting from the preliminary adoption of IFRS 9.

(a) Classification and measurement

The Bank does not expect a significant impact on its balance sheet or equity on applying the new classification and measurement category of IFRS 9. It expects to continue being measured at amor-tised cost and to use the new category starting from 1 January 2018 for classifying part of the debt securities portfolio to be measured at fair value through OCI.

Credit facilities are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest. The Bank analysed the contractual cash flow characteristics of those instruments and concluded that they meet the criteria for amortised cost measurement under IFRS 9. Therefore, reclassification for these instruments is not required.

(b) Impairment

The new impairment guidance sets out an expected credit loss (ECL) model applicable to all debt instrument financial assets classified as amortized cost or FVTOCI. In addition, the ECL model ap-plies to loan commitments and financial guarantees that are not measured at FVTPL

Incurred Loss versus Expected Loss Methodology

The application of ECL will significantly change the credit loss methodology and models. ECL al-lowances represent credit losses that should reflect an unbiased and probability-weighted amount which is determined by evaluating a range of possible outcomes, the time value of money and reasonable and supportable information about past events, current conditions and forecasts of future economic conditions. This compares to the present incurred loss model under IAS 39 that incorporates a single best estimate, the time value of money and information about past events and current conditions. The objective of the new impairment standard is to record lifetime losses on all financial instruments which have experienced a significant increase in credit risk (SICR) since their initial recognition. As a result, ECL allowances will be measured at amounts equal to either (i) 12-month ECL or (ii) lifetime ECL for those financial instruments which have experienced a SICR since initial recognition. This compares to the present incurred loss model which recognizes lifetime credit losses when there is objective evidence of impairment and also allowances for incurred but not identified credit losses. Because of the inclusion of relative credit deterioration criteria and con-sideration of forward looking information, the ECL model eliminates the threshold or trigger event required under the incurred loss model, and lifetime ECL are recognized earlier under IFRS 9.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 specifies the accounting treatment for all revenue arising from contracts with customers. It applies to all entities that enter into contracts to provide goods or services to their customers, un-less the contracts are in the scope of other IFRSs, such as IAS 17 Leases. IFRS 15 supersedes IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agree-ments for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers; and SIC-31 Revenue—Barter Transactions Involving Advertising Services. The standard is effective for annual periods beginning on or after 1 January 2018, and early adoption is permitted.

Amendments to IFRS 10 and IAS 28:Sale or Contribution of Assets between an Investor and Its As-sociate or Joint Venture

The amendments address the conflict between IFRS 10 and IAS 28 in dealing with the loss of control of a subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that the gain or loss resulting from the sale or contribution of assets that constitute a business, as defined in IFRS 3, between an investor and its associate or joint venture, is recognised in full. Any gain or loss resulting from the sale or contribution of assets that do not constitute a business,

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Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

however, is recognised only to the extent of unrelated investors' interests in the associate or joint venture.

IFRS 2 Classification and Measurement of Share-based Payment Transactions - Amendments to IFRS 2

The IASB issued amendments to IFRS 2 Share-based Payment that address three main areas: the ef-fects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled.

Entities may apply the amendments prospectively and are effective for annual periods beginning on or after 1 January 2018, with early application permitted.

IFRS 16 Leases

During January 2016, the IASB issued IFRS 16 “Leases” which sets out the principles for the recog-nition, measurement, presentation and disclosure of leases.

IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently.

IFRS 16 introduced a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognize a right-of-use asset representing its right to use the underly-ing leased asset and a lease liability representing its obligation to make lease payments.

The new standard will be effective for annual periods beginning on or after 1 January 2019. Early application is permitted.

IFRS 17 Insurance Contracts

IFRS 17 provides a comprehensive model for insurance contracts covering the recognition and measurement and presentation and disclosure of insurance contracts and replaces IFRS 4 -Insur-ance Contracts. The standard applies to all types of insurance contracts (i.e. life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features. The standard gen-eral model is supplemented by the variable fee approach and the premium allocation approach.

The new standard will be effective for annual periods beginning on or after 1 January 2021. Early application is permitted.

Transfers of Investment Property (Amendments to IAS 40)

The amendments clarify when an entity should transfer property, including property under con-struction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management’s intentions for the use of a property does not provide evidence of a change in use.

Entities should apply the amendments prospectively and effective for annual periods beginning on or after 1 January 2018. Early application of the amendments is permitted and must be disclosed.

Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts

In September 2016, the IASB issued amendments to IFRS 4 to address issues arising from the dif-ferent effective dates of IFRS 9 and the upcoming new insurance contracts standard (IFRS 17). The amendments introduce two alternative options for entities issuing contracts within the scope of IFRS 4, a temporary exemption from implementing IFRS 9 to annual periods beginning before 1 January 2021 at latest and an overlay approach that allows an entity applying IFRS 9 to reclassify

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

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between profit or loss and other comprehensive income an amount that results in the profit or loss at the end of the reporting period for the designated financial assets being the same as if an entity had applied IAS 39 to these designated financial assets.

IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration

The interpretation clarifies that in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the nonmonetary asset or non-monetary liability arising from the advance consideration. Entities may apply the amendments on a fully retrospective or prospec-tive basis. The new interpretation will be effective for annual periods beginning on or after 1 Janu-ary 2018. Early application of interpretation is permitted and must be disclosed

IFRIC Interpretation 23 Uncertainty over Income Tax Treatment

The Interpretation addresses the accounting for income taxes when tax treatments involve uncer-tainty that affects the application of IAS 12 and does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. An entity must determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments. The interpreta-tion is effective for annual reporting periods beginning on or after 1January 2019, but certain transi-tion reliefs are available.

43. COMPARATIVE FIGURES Some of 2016 balances were reclassified to correspond with 2017 presentation.

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Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

Societe Generale De Banque – jordanie Consolidated Statement of Finan-cial Position At 31 December 2017

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Governance Report

Corporate Governance Guide is available on the bank’s website through the link below:

http://www.sgbj.com.jo/Library/Assets/DH-105524.pdf

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The provisions of the Corporate Governance Code of SGBL which have not been complied with

• The completion of some of the Bank's policies, plans and procedures covering all its activities and reviewing them regularly.

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Corporate Governance Report

A. Information and details regarding the implementation of the provisions of these instructions and the rules of corporate governance in the BankThe Bank pays great attention to the corporate governance practices in the belief that the importance of good governance stops from providing basis for improving operational efficiency and improving future institutional performance, enhancing the confidence of depositors, investors and all other stakeholders as well as reducing the Bank's exposure to crises and enabling it to contribute successfully to the development of the banking system in Jordan, which in turn is an essential part of the national economy.

Accordingly, the Board of Directors decided to adopt the Corporate Governance Manual as well as the Charter of the Board and its committees, which have been prepared in accordance with the international best practices and policies adopted at the Group level and in line with the Corporate Governance Directive No. 63/2016 issued by the Central Bank of Jordan Dated 1/9/2016 and the Corporate Governance Regulations of Listed Companies of 2017 issued by the Jordan Securities Commission and other relevant laws. The Board shall also comply with any instructions issued by the Central Bank or other relevant regulatory authorities in this regard.

B. Names of the current and resigned Board Members during the yearChairman of the Board: Messrs. Société Générale De Banque Au Liban/ Represented by Mr. Hassan Hamdi Khalil Mango Deputy Chairman of the Board: Messrs. Sogelease Liban/ Represented by Mr. Antoun Nabil Nicolas Sehnaoui Board Member: Messrs. SGBL Insurance SAL / Represented by Miss Noha Espiridon Khalil Abou SaadBoard Member: Mr. Gérard Albert Goulven GarzuelBoard Member: Mr. Gregoire Yves Marie LefebvreBoard Member: Dr. Ahmad Ibrahim Khalil MangoBoard Member: Mr. Khalil Anis Khalil Nasr Board Member: Mr. Mufleh Moh’d Awad AkelBoard Member: Dr. Fawaz Hatim Sharif Zu’biBoard Member: Mr. Georges Elie Georges SaghbiniBoard Member: Mr. Philippe Joseph Bernard DuboisBoard Member: Mr. Omar Khaled Rasheed Agha

All Board members are non-executives , knowing that there are no resigning members during 2017

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C. Executive positions in the Bank and the names of the persons who occupy these positions

PositionEmployee Name

General ManagerNadim Iskandar Farid Abawat1

Head of Retail ,Private Banking &Marketing Division

Charbel Kamal Kabalan2

Head of the Audit DepartmentMarwan Simon Bou Dib3

Head of Support & Administration DomainJad Hareth Naseeb El Howayek4

Deputy General Manager and Head ofCorporate Treasury Division

Rami Talal Husni Al Khuffash5

Head of Back Offices , Recovery & Legal Affairs Domain (BARL)

Majdi Adli Mohd Ajaj6

Manager of Risk DepartmentAiman Kamel Metri Hijazin7

Finance ManagerAghadeer Tawfeek Shaker Abu Ghosh8

Manager of Compliance and PermanentControl Department

Suleiman Michel Elias Aranki9

D. The names of the Board Members’ representatives and determining whether the representative is executive, non-executive, independent or non-independent • Chairman of the Board: Messrs. Société Générale De Banque Au Liban/ Represented by Mr. Hassan Hamdi Khalil Mango / non-independent • Deputy Chairman of the Board: Messrs. Sogelease Liban/ Represented by Mr. Antoun Nabil Nicolas Sehnaoui / non-independent• Board Member: Messrs. SGBL Insurance SAL / Represented by Miss Noha Espiridon Khalil Abou Saad/ non-independent➢ All Board members are non-executives.

E. Memberships in public shareholding companies occupied by any Board Member, if anyNone of the Members is a member in other public shareholding companies except for Mr. Khalil Nasr, who is a member in the following public shareholding companies: • Vice Chairman of Emaar Real Estate Development & Investment Company since 2011• Member of the Board of Directors of Masafat Specialized Transport Company since 2011

• Vice Chairman of the Arab Center for Pharmaceutical Industries since 2012

F. Name of the Corporate Governance OfficerMrs. Rula Wajih Elias Khoury / Secretary of the Board of Directors

G. The Board of Directors Committees• Corporate Governance Committee

• Audit Committee

• Risk Management Committee

• Nomination and Remuneration Committee

• Credit Facilities Committee

• IT Governance Committee 143

H. Name of the Chairman and Members of the Audit Committee and a description of their qualificationsMr. Khalil Anis Khalil NasrNationality: Jordanian Board member since 18/1/2016 to present Head of the Board Audit CommitteeMember of the Board Risk Management CommitteeMember of the Board Nomination and Remuneration CommitteeDirector Status: A non-executive and independent memberDate of birth: 1953

Educational Certificates:Bachelor of Arts/Business Administration 1976.Masters/Finance 1997.

Professional Qualifications:• Vice Chairman, Palestine Investment Bank since 2011• Vice Chairman, Emmar Investments & Real Estate Development Company since 2011• Board Member, Masafat for Specialized Transport since 2011• Vice Chairman , Arab Center for Pharmaceutical & Chemical Industries since 2012• Chairman, Emmar Islamic Company for Leasing & Investment Since 2011-2017• Chairman, East Amman Company for Housing & Development since 2011• Board Member, Masafat Company for Touristic Car Rental since 2015• Board Member, Orthodox Educational Society since 2012 - 2018• Board Member, Association Of Banks in Jordan 2003-2006 & 2009-2010• Chairman of Al-Mawared for Brokerage 2008-2010• Chairman of Tamkeen for Financial Leasing 2008-2010• Chairman of IMDAD for Supply Chain 2008-2010• Board Member, Arab Center for Pharmaceutical & Chemical Industries Company 2008-2009• Board member of the International Cards Company 2009

Also held the following banking positions:• CEO/General Manager, Investbank 2007-2010• Deputy CEO, Jordan Ahli Bank 1993-2007• Alternate Board Member, Jordan International Bank-London 2000-2007• Advisor to the Chairman, Ahli International Bank-Lebanon 2001-2007• Executive Manager, Bank of Jordan 1986-1993• Credit Facilities Manager / Second Vice President, Chase Manhattan Bank NA – Jordan

Branch 1976-1986

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Mr. Omar Khaled Rasheed AghaNationality: Jordanian Board member since 18/1/2016 to present Head of the Board Nomination and Remuneration CommitteeMember of the Board Corporate Governance CommitteeDirector Status: A non-executive and independent memberDate of birth: 1956

Educational Certificates:Bachelor Degree in Civil Engineer 1991Post graduate studies in Strategic Planning & Financial Management 2014

Professional Qualifications:• Board member of Societe General Bank Jordan (SBJ), member of Audit Committee

2016 – present• Group CEO - Abdali Investment and Development Company (Jordan) - 2016 - Present• Group CEO - Al Anwa Holding for Investments (KSA) 2015 - 2016• CEO / COO Saraya Holdings (UAE-Jordan) 2007 - 2015 • Executive Vice President, Arab Bank Group (Jordan) 2002-2007• Board Member, Saraya Aqaba for Real Estate Development Company (Jordan) (a

$1.5B development company) 2010 - 2015• Board Member, Saraya Bandar Jissah (Oman) (a $600MM real estate development

company). Chairman of• Executive Committee, member of the Audit Committee 2011-2015

• Chairman of Saraya Realty (exclusive real estate agent – Jordan/Dubai/Oman) 2008 - 2013• Managing Director and Vice Chairman of Saraya Development Group (development

management company) 2007- 2011• Board Member, Iskandar Holdings (JV between governments of Abu Dhabi &

Malaysia) 2009-2012• Board Member, Palestinian Telecommunication Company (PalTel) 2005 – 2007• Board Member, Arabella for IT Services / subsidiary of Arab Bank (UK) 2004 – 2007• Board Member, Arab Company for Shared Company (Dubai) 2006 - 2007• Fusion (IT services start-up Dubai/Jordan) Interim CEO 2005 – 2006

• Board Member, Jordan Investment Telecommunication Co. (Jordan Telecom) 2004 – 2006

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Mr. Mufleh Moh’d Awad AkelNationality: JordanianBoard member since 23/4/2014 to present Member of the Board Risk Management Committee Member of the Board Audit CommitteeDirector Status: A non-executive and independent memberDate of birth: 1945

Educational Certificates:MBA, University of Dallas-Texas, USA, 1979.Bachelor's Degree in Economics & Political Sciences, Arab University of Beirut, 1974.Bachelors in Law, University of Damascus, 1966.

Professional Qualifications:• Founder & President of Akel Consulting (Banking & Finance) since 2010. • Executive Chairman of Jordan's Social Security Investment Unit, 2005-2008. • Chairman of Jordan Dubai Islamic Bank (formerly Industrial Development Bank), 2000-2009. • Chairman and CEO of the Association of Banks in Jordan, 2004-2006. • Member of the Board of Directors of the Central Bank of Jordan, 2005-2009. • Executive Regional Manager, Arab Bank plc- Head Office, 1982-2004.• Former Member of the Board of Directors in several companies, including

(Jordan Telecom Company, Jordan Cement Factories, Arab Tunisian Bank, Hikma Pharmaceuticals, Arab Aluminum Industry, Jordan National Shipping lines, Amman Stock Exchange, Jordan Worsted Mills and Jordan Hotel and Tourism Company).

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Mr. Gérard Albert Goulven Garzuel Nationality: French Board member since 24/4/2013 to presentMember of the Board Audit Committee Member of the Board Credit CommitteeDirector Status: A non-executive and non-independent memberDate of Birth: 1949

Educational Certificates:Degree from the Institute Technique de Banque à l’International in Paris, 1980.

Professional Qualifications:Held the following positions at SGBL SAL:• Advisor for the Chairman of Societe Generale in Lebanon since April 2015• Delegated General Manager, Supervisor of Société Générale De Banque – Jordanie

(SGBJ), Société Générale Bank - Cyprus Ltd. (SGBCy), Sogecap Liban SAL and Sogelease Liban SAL, 2008 – April 2015.

• Assistant General Manager in charge of the General Secretariat and Risk Divisions, 2007-2008.

• Assistant General Manager in charge of the banking network in Lebanon and supervisor of SGBJ banking network, 2002-2007.

• Also held the following positions at Société Générale (SG) in France: • Head of Retail & Professional Banking at SG/ Caen- France, 1996-2002.• Corporate Department Manager at SG/ Niort- France, 1992-1996.• Corporate Department Manager at SG/ Monaco- France, 1987-1992.• Project Manager at SG/ Reims- France, 1985-1987. • Assistant Manager of the Private Banking Department at SG/ Bastia- France, 1980-

1985.• Branch Manager at SG-Paris, 1971-1976.

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Mr. Georges Elie Georges SaghbiniNationality: Lebanese Board member since 26/7/2011 to presentHead of the Board Risk Management Committee Member of the Board Nomination & Remuneration CommitteeMember of the Board Audit CommitteeMember of the Board Credit Committee Director Status: A non-executive and non-independent memberDate of Birth: 1971

Educational Certificates:Master's Degree in Economics, Paris-Sorbonne University, 1995.Postgraduate Studies Diploma in Money & Banking, Paris-Sorbonne University, 1995. Master's Degree in Econometrics, Paris-Sorbonne University, 1994.

Professional Qualifications:• Chairman of LCB Investments Holding SAL since 2013. • Member of the Board of Directors of Société d’Investissements et de Services SAL since 2011. • Member of the Board of Directors of Société Générale Bank - Cyprus Ltd. (SGBCy) since 2010.• Deputy General Manager of SGBL SAL since 2008.• Chairman of SGBL Insurance S.A.L since 2008.• Member of the Board of Directors of Liberty International Limited since 2017.• Chairman of the Real Estate Company 415 SAL since 2017• Member of the Board of Directors of Fidus SAL since 2008.• Chairman of 799 Bassatine Tripoli SAL since 2006 • Chief Financial Officer (CFO) of SGBL Group since 2001.• Head of the Financial Control Division at SGBL SAL, 1999-2001.• Employee at the Financial Control Division in SGBL SAL, 1996-1999.

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I. Name of the Chairman and members of the Nomination and Remuneration Committee, the Corporate Governance Committee and the Risk Management Committee

Nomination and Remuneration Committee

• Dr. Fawaz Zu’bi / Head of the Committee• Mr. Omar Agha / Member• Mr. Khalil Nasr/ Member• Mr. Georges Saghbini/ Member• Mr. Philippe Dubois / Member

Corporate Governance Committee

• Messrs. Société Générale De Banque Au Liban/ Represented by Mr. Hassan Hamdi Khalil Mango/ Head of Committee

• Mr. Mufleh Moh’d Awad Akel/ Member • Mr. Omar Khaled Agha/ Member• Messrs. SGBL Insurance SAL / Represented by Miss Noha Espiridon Khalil Abou Saad

/ Member• Dr. Fawaz Zu’bi / Member

Risk Management Committee

• Mr. Georges Saghbini/ Head of Committee• Mr. Gregoire Yves Marie Lefebvre / Member• Mr. Khalil Nasr/ Member• Mr. Mufleh Moh’d Awad Akel/ Member• Messrs. SGBL Insurance SAL / Represented by Miss Noha Espiridon Khalil Abou Saad

/ Member

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J. Number of the Board of Directors and Committees’ meetings during the year, with the members present

Noting that the Board Credit Committee has made its decisions by means of circulation.

The total number of meeting held during 2015

Board of Directors

Audit Committee

Nomination and

Remuneration Committee

Risk Management

Committee

Corporate Governance Committee

7 6 2 4 2

1 Messrs. Société Générale De Banque Au Liban/ Represented by Mr. Hassan Hamdi Khalil Mango

7 - - - 2

2 Messrs. Sogelease Liban/ Represented by Mr. Antoun Nabil Nicolas Sehnaoui

3 - - - -

3 Messrs. Sogecap Liban/ Represented by Miss Noha Espiridon Khalil Abou Saad

5 - - 3 2

4 Mr. Gérard Albert Goulven Garzuel 2 2 - - -5 Mr. Gregoire Yves Marie Lefebvre 3 - - 2 -6 Dr. Ahmad Ibrahim Khalil Mango* 5 - - - -7 Mr. Omar Khaled Agha** 6 5 2 - 28 Mr. Mufleh Moh’d Awad Akel* 6 6 - 3 29 D. Fawaz Hatim Zu’bi 6 - 2 - 210 Mr. Georges Elie Georges Saghbini 5 5 2 2 -11 Mr. Philippe Joseph Bernard

Dubois2 - - - -

12 Mr. Khalil Anis Nasr 7 6 2 4 -

K. The Audit Committee met with the External Auditor four times during 2017.

*Independent Director Non committee member

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Products and Services

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Banking Services for Corporations:

Financing For All Kinds of Operating Cycles:

1. Loans.

2. Guarantees.

Financing for Foreign Trade:

1. Credit and Guarantees.

2. Currency Products to Cover Risks.

Investment Financing:

1. Financial Engineering.

2. Medium and Long Term Loans.

3. Loan Syndications.

Investment Banking in the Private and Public Sectors:

Private Banking Services:

1. Investment Products.

2. Portfolio Management.

3. Financial Engineering.

Foreign Capital Markets:

1. Money Markets and Certificates of Deposit.

2. Dealing In Foreign Currencies.

3. Exchanging Foreign Currencies.

Individual Banking Services:

Loans:

1. Housing Loans (Sogehome).

2. Personal Loans (Sogeloan).

3. Car Loans (Sogecar).

4. Land Loans (Sogeland).

5. Professional Personal Loans (Sogeloan Pro).

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6. Professional Car Loans (Sogecar Pro).

7. Professional Office Loans (Sogehome Pro).

8. Public Sector Loans.

Accounts:

1. Current account.

2. Saving account.

3. Makasseb account.

4. Fixed deposit account.

5. Saving+ account.

6. Fawzi Fawri account.

7. Ghena saving account.

8. Youth accounts (ILive and Swing).

Cards:

A wide variety of Visa and MasterCard Cards:

1. Benefit Titanium Card ( Evolving Credit Card).

2. My Card Titanium (Monthly Paid Credit Card).

3. Easy Premium Titanium Card (ATM card and purchases at points of sale).

4. Universal Card (Card In USD).

5. Classic Benefit Credit Card (Evolving Credit Card).

6. Classic My Card Credit Card (Monthly Paid Credit Card).

7. Esurf Card (Internet Card).

8. Europa Titanium Card (Card in Euros).

9. Visa Gold Card.

10. Visa Classic Card.

11. Visa Infinite Card.

12. Platinum Card (Monthly Paid Credit Card).

13. Saving+ (ATM Card and POS).

14. I live “ Youth Card” (ATM Card and POS).

Other Services:

• Online Banking

• Safe Deposit Boxes

• MasterCard SMS services

• Certificates of Deposit

• eFAWATEERcom

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