'The provisions are a normal reaction to the difficulties in the local and the global economy,' says a senior CIB executive. 'The good news is that our core income is still growing.' Net interest income was up 16 per cent over the period, and fee income rose by 5 per cent. Net income before provisions was up by just over 7 per cent.

The most notable aspect of the balance sheet figures is a 7.5 per cent increase in customer deposits since the start of 2002. The CIB executive says this is part of a deliberate strategy to increase dependence on deposits as the basic source of funding, after a period in which CIB had raised considerable amounts of institutional funding. One by-product of this has been a steady reduction in the loan-deposit ratio, which is now 75.5 per cent, compared with over 100 per cent in the mid 1990s.