HSBC Bank Middle East profits increase
The Middle East operations of HSBC Holdings, known as HSBC Bank Middle East have realized an increase in their cash basis EBIT of US $11 million.
The Middle East operations of HSBC Holdings, known as HSBC Bank Middle East have realized an increase in their cash basis EBIT of US $11 million. The results translate into a rise of 11 percent over the same period in 2000. The positive results are predominantly a result of lower bad debt charges, which fell by 50 per cent in the first half of 2001, compared to the same period last year, reflecting a smaller number of significant individual provisions raised, and recoveries in the United Arab Emirates.
Growth in deposits has resulted in an increase of 3% in net interest income. However, the increasingly competitive market for personal lending reduced lending volumes. Net interest margin fell 17 basis points as a result of the combination of a more liquid balance sheet as surplus deposits were invested through the money market and a lower contribution from a reduced level of net free funds. Growth in personal banking products increased Net fee income by 13 per cent to US$5 million.
HSBC’s financial planning management services (which provides savings, retirement, education and protection planning services) was expanded across the region, resulting in an increase of US$2 million in fees; credit card fee income increased by U$1 million, or 7 per cent, following fresh promotion of credit card products, backed by the launch of a new loyalty programme.
The number of credit cards in issue increased by 18 per cent. Funds sold to customers rose by 23 per cent to US$301 million compared with the first half of 2000. A wider range of trade, cash management and institutional products for commercial customers also contributed to the increase in other operating income. Operating expenses increased by US$6 million compared to the first half of 2000, largely as a result of the development of the financial planning management programme and investment in Internet service capability. The Internet service is to be launched in the United Arab Emirates in October 2001, with a full regional launch from the beginning of 2002.