* JIB says Islamic banking expands despite downturn
* Loan portfolio up 9 percent in H1 to $1.7 bln from year-end
* Bank AGM approves capital hike to 100 million dinars
(Adds more financial figures and background)
By Suleiman al-Khalidi
AMMAN, Aug 18 (Reuters) - Jordan's Islamic Bank, (JIB), a subsidiary of Bahrain-based Albaraka Banking Corp, said first-half net profit rose 3 percent to 20.7 million dinars ($29.2 million) on the same period a year ago, helped by healthy growth in Islamic banking services.
The bank's total assets rose 5 percent to 2.28 billion dinars ($3.2 billion) at the end of June 2009 against 2.17 billion dinars at the end of 2008, the bank said on Tuesday in a statement sent to Reuters.
Musa Abdelaziz Shihadeh, deputy chairman and CEO of the bank, said the results reflected the consolidation and growth of Islamic banking services in Jordan in a commercial banking sector whose profitability has suffered from the global downturn.
"We are seeing growth in profits, assets and the deposit base of the bank... this proves the success of Islamic banking services in Jordan," Shihadeh said in a statement.
Jordan Islamic Bank is the largest and the oldest among three Islamic banks operating in Jordan in a market with tough competition among 23 commercial banks.
The bank's loan portfolio increased 9 percent in the first six months of the year to 1.216 billion dinars at end of June 2009 from 1.115 billion dinars at end of 2008.
Shihadeh said the bank was able to maintain robust lending despite a global downturn that has seen many banks in Jordan adopting tighter credit policies as the result of slower growth and a slump in domestic consumption.
The bank had capitalised on rising interest in Shari'ah-compliant banking in Jordan, according to bankers.
Total customer deposits rose 8.8 percent in six months to 1.685 billion dinars from 1.550 billion dinars at end of 2008.
($1=0.709 dinars)