LONDON (Bloomberg) ? HSBC Holdings Plc, Europe?s biggest bank by market value, named Middle East head David Hodgkinson to be group chief operating officer after the lender?s regional unit increased profit by as much as 50 percent a year since 2003.

Hodgkinson, 56, said in an interview in Dubai yesterday that he is ?excited? to replace Alan Jebson and take up his new post at HSBC?s London headquarters on May 22. He declined to comment further until after the bank?s May 26 annual general meeting.

?HSBC has a strong tradition of promoting internally,? said James Leal, an analyst for Teather & Greenwood Holdings Plc in London. ?For this reason its strategy evolves very gradually rather than by sea changes, so I?d expect strategic direction to remain the same.?

HSBC spent more than $20 billion in the past three years to expand in the US, Brazil and China, where growth is outpacing Europe. Net income in 2005 rose 17 percent to $15.1 billion.

Hodgkinson joined HSBC in 1969. He served as the bank?s chief executive in the Philippines in 1991 and head of human resources for Hong Kong & Shanghai Banking Corp. in Hong Kong between 1995 and 1999. He moved to the Middle East to become managing director of the Saudi British Bank in October 1999. HSBC owns 40 percent of Saudi British. He is now HSBC?s chief executive for the Middle East.

HSBC Bank Middle East Ltd. is based in Dubai and operates from 31 branches in the UAE, Oman, Bahrain, Qatar, Kuwait, Jordan, Lebanon and the Palestinian Authority, as well as units in Egypt and Iran. The company plans to open an investment banking unit in Saudi Arabia this month as rising oil prices stoke the economies of the Persian Gulf?s oil producers and boost demand for financial services.

HSBC also said that Mukhtar Hussain, head of global banking for corporate, investment banking and markets in the Middle East, will move to London to become co-head of global corporate banking for HSBC Bank Plc. He is replaced by Antoine Cahuzac, global co-head of energy and utilities for HSBC?s corporate and investment banking unit.

The Middle East generated about five percent of HSBC Holdings?s profit in 2005, according to Hodgkinson. The region?s profitability has grown between 40 percent and 50 percent a year since 2003, he said.

Niall Booker, Hodgkinson?s replacement in Dubai, said today he is ?optimistic? about the outlook for continuing profit growth in the region.

?The demographics in Egypt and Pakistan in particular show potential for expansion there,? he said. ?Our emerging market exposure is certainly putting a premium on our stock price.?

Shares in HSBC have risen two percent this year, valuing the bank at ?109 billion ($207 billion). The shares fell two percent on Friday to 951 pence.

Booker, 47, moves from HSBC India where he was chief executive officer.

Crude oil in New York closed at a record $75.17 a barrel on April 21, amid concern supplies out of Iran may be disrupted over its nuclear programme standoff with the US. The price closed at $72.04 a barrel on May 12.