HSBC 'is open for business'

HSBC's results across the world showed a real strength and showed that, despite the current challenges, the bank was able to grow its business, Alan Keir, HSBC Group general manager said yesterday.

Mr Keir was addressing a business breakfast organised by The Malta Business Weekly entitled Managing The Unexpected.

"The key message I want to underline is that HSBC is open for business. We have the capital available to lend to customers. This is in clear contrast to many other banks which have severely curtailed or even stopped lending altogether. We are actively working to increase the credit available to business customers through these difficult times although, given the scarcity of liquidity, the price of money has increased," he said.

Mr Keir said that the bank's resilience was due to its financial strength and the diversity of its business both across geography and across customers.

"These have always been key strengths of our business but in today's climate they are even more important. That's one of the reasons why we recently announced a rights issue that will further strengthen our capital base and ensure that we remain well positioned to succeed in this uncertain climate."

Mr Keir said that Asia is the bank's heartland and, in 2008, the region generated profits of $11.9 billion with notable growth in Korea, mainland China and India. Latin America also continued to see increases in revenues and growth in many major markets.

"This underlines the success of our strategy of focusing on emerging markets which now contribute two thirds of our profit. Two years ago that figure was 50 per cent, highlighting the phenomenal pace of growth in those emerging economies," he said.

He said the bank continued to maintain a very strong business in the more mature markets of Europe and profits there increased by 26 per cent. Mr Keir pointed out that the impact of the US government stimulus packages is yet to be seen and "it is clear that the US market will remain a difficult one for some time".

Looking ahead, Mr Keir said that although there is a great deal of bad news around there will also be opportunities for those with strong financial positions and strong business models.

He added: "We do not yet fully understand the causes of the current crisis, nor how those factors will affect the future. Clearly the coming year is going to remain very difficult with the major economies in recession. There will be no early return to business as usual. Financial systems will remain under stress although we can perhaps hope for some greater stability and for the benefits of the massive stimulus programmes many governments have put in place to begin to take effect."

He said it was important to remember that the long-term fundamentals have not been changed by the economic crisis.

"There are huge potential markets in the emerging economies. The good news is that millions of people are getting richer in those economies and those people will generate demand for goods and services on a massive scale. So while their economic growth may slow a little, their medium term prospects remain bright."

He said that HSBC wanted to play its part in helping their customers weather the current storms and to support the many strong businesses around the world that may simply need a little support in the short term.

"The most important way we can support small businesses at the moment is through making credit available to them. That's why we increased our lending in all regions outside North America last year.

"And we have made available a $5 billion global fund to help small businesses access credit - to help them manage the unexpected. That lending will, of course, be responsible and subject to our usual lending criteria but we believe this fund can both enhance our business and provide our customers with the support they need," he said.

Mr Keir said it is always hard to be optimistic when you are in the middle of the storm but this storm will pass.

"Once it does there will be real opportunities ahead and HSBC looks forward to working with our customers across the world to help them not just manage the unexpected but also seize the opportunities of the unexpected," he said.