International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

The Impact of Indirect Credit Facilities on the Net Profits of Jordanian Commercial Banks (2005-2014)
Phd. Mansour. M. H. Alkhaza’leh, Prof.Ghazi Abdulmajeed Alrgaibat

We explore the impact of documentary credits and banks guarantees on the banks net profit from 2005 to 2014.We combine secondary sources which were represented in the reports and bulletins issued by the Central Bank of Jordan, the Jordanian association of banks. We found that documentary credits are significantly and positively affect the net profit in commercial banks, which shows the growing need for documentary credits as an easy and available means that greatly contributes to the speed of inter-trade exchange between Jordan and other countries in the world. On the other hand, we found that bank guarantees affect the net profit in commercial banks in a direct noticeable way, the reason for this is due to the increasing need to bank guarantees issuance, especially in: either the first is what is required by government bids or the private sector, while the second is related to foreign trade.

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