Net profits of the British Bank of the Middle East (BBME) rose 13.7 percent in 1995 to £58 million ($89.32 million), boosted by substantial profit growth in the UAE and a rise in interest income.
The BBME recorded a satisfactory performance in 1995 despite making higher provisions for bad and doubtful debts,’ chairman William Purves said in a statement. UAE profits grew by 40 per cent due to higher interest rates and growth in trade financing business, which also increased in Lebanon and Jordan (see UAE).
BBME, a wholly-owned subsidiary of London-based HSBC Holdings, saw its profits drop 15 per cent in 1994 to £51 million ($78.54 million). The bank attributed the fall to the effect of depressed oil prices on the regional economy.
Provisions for bad and doubtful debts rose to £6 million ($9.24 million) in 1995 from £1 million ($1.54 million) in 1994. This reflected bigger provisions in Oman and the UAE as well as a general increase throughout the bank, the statement said.
The bank’s assets grew by 5.4 per cent to reach £3,222 million ($4,962 million). Loans and advances grew 13 per cent to £1,410 million ($2,171 million) and customer deposits rose 6.2 per cent to £2,750 million ($4,235 million).
The bank’s Middle East network expanded in 1995 with the opening of an investment banking unit, HSBC Financial Services (Middle East), and a range of new card products. The bank said this was partly responsible for an 11.8 per cent rise in operating costs to £76 million ($117 million).
The bank’s UAE-based subsidiary, Middle East Finance Company, made net profits of £1.76 million ($2.71 million), down from £2.4 million ($3.70 million) in 1994.