The British Bank of the Middle East (BBME) reported an 11 per cent fall in profits in 1993, but the result still exceeded expectations, chairman Sir William Purves says.
The £60.5 million ($90 million) profit was satisfactory given regional conditions and the bank’s increased administrative expenses during the year, Purves says in BBME’s annual report, published in early May. BBME is looking for an improved performance in 1994, following recent investments in improved customer services and expansion in the branch network.
The bank has moved its administrative head office to Jersey from Hong Kong as part of consolidation by its parent, Hongkong & Shanghai Banking Corporation (HSBC), whose private banking business is also based in the Channel Islands. However, while three administrative staff are based on Jersey, Hong Kong will remain BBME’s operations base.
A sectoral breakdown of income is not available, but standard trade finance instruments remain a staple of BBME’s income, bankers say. The bank’s integration into HSBC’s retail banking network is a focus of growth, bankers say. Credit cards have been introduced in the UAE and Oman, and further expansion of card services is planned.
Other developments in 1993 included the opening of a custom-built office in Dubai, a new branch in Trivandrum in India and enhanced private banking services. BBME’s automated teller machine (ATM) network was expanded and GlobalAccess cards were introduced, linking into the HSBC network.
The bank achieved satisfactory growth in most countries in the region in 1993, Purves says in his annual statement. Among negative trends, Purves says: ‘We have some concern as to how the new deposit protection scheme in Bahrain and the planned introduction of individual borrowing limits in the UAE may affect the growth of these financial centres.’
In Jordan, investment in new computer systems and the expansion of the ATM network should improve customer services, the report says. BBME is strengthening its position in Lebanon with a new branch and a centralised management office.
The bank benefited from a cut in corporation tax rates in Qatar, to 35 per cent from 50 per cent.
Saudi British Bank achieved a record net profit of SR 403 million ($107 million). BBME sold its 40 per cent stake in the bank at the end of 1993 to the London-based HSBC Holdings. This will have a significant impact on BBME’s profit figures in 1994. Nevertheless, the bank expects to report good profits through a strong performance from its regional network in the next year.