'Strengthening credit risk management procedures and a new debt recovery unit resulted in lower new provisioning requirements in both the personal and corporate lending portfolio,' said the bank in a statement. However, the cost of the debt recovery teams increased by $2 million year on year.

HSBC Bank Middle East saw earnings supported by a 3 per cent increase in net interest income. This came despite a 6-basis point fall to 3.78 per cent in its net interest margin, which was caused by the reduced benefit of free funds in the declining interest rate environment.

However, operating profits before provisions contracted by 9 per cent on the back of higher costs. Much of these stemmed from an expansion of the commercial and personal banking operations: total staff costs increased by 26 per cent.