The Saudi Arabian bank, which is 40 per cent owned by HSBC, said that in the three months to the end of June it had expanded its loan book by 59.5 per cent compared withthe same period last year.

Managing director John Coverdale says this has more than offset the impact of falling interest rates.

Costs rose by 23.4 per cent during the first half of 2008 as the bank expanded and introduced performance-related compensation schemes.

Customer deposits rose by SR23.9bn ($6.4bn) , or 36.7 per cent, compared with the same period last year, to SR89.1bn ($23.7bn), and total assets rose by 48.3 per cent to SR126.2bn ($33.6bn).