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.
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.