After a year in which British Bank of the Middle East (BBME) increased customer lending by nearly 50 per cent, the bank has reported attributable profits of £62 million ($104.2 million) for 1996, a rise of 7 per cent from the year before.
'[The bank] recorded a satisfactory performance in 1996, mainly due to an increase in net interest income and higher net fees and commissions earned on our trade finance-related activities and from card products,' BBME deputy chairman Aman Mehta said. BBME, a commercial bank, is part of the HSBC Holdings group (see Banking Special Report, pages 10-14). Last year, it started using the brand name BritishBank.
This year, the bank plans to expand its electronic banking network and set up an investment division. 'Last year's increase in oil prices is forecast to have a positive impact on Gulf economies, while a greater degree of stability in the Levant will benefit economic growth there,' Mehta also said.
Operating profit before provisions rose 14 per cent in 1996 to £95 million ($159.6 million). Total assets rose by 6 per cent to £3,400 million ($5,712 million). Net profits have been rising for the last two years, after a fall in 1994. However, the bank's returns on end-year assets have consistently been about 1.8 per cent for the past five years. The bank says its operating expenses rose by 12 per cent during 1996 to cover the costs of upgrading its infrastructure. This included spending more on technology and training and taking on more staff to speed up turnover. BBME has also been refurbishing its branch network.
In August, it opened a new branch in Azerbaijan and acquired a branch in the Omani town of Seeb. 'We have also been granted a licence to open a branch in the West Bank town of Ramallah, the plans for which are progressing well,' Mehta said. BBME currently has branches in Bahrain, India, Jordan, Lebanon, Oman, the West Bank, Qatar and the UAE. Middle East Finance Company, a BBME subsidiary based in the UAE, increased its net profits by 47 per cent in 1996 to £2.5 million ($4.2 million).
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