US
HSBC has taken the opportunity to reassert its commitment to the Middle East in spite of the escalating social unrest in the region, on the back of nearly doubled year-on-year pre-tax profits and increased staff numbers.
The bank posted a profit of $892m for its Middle East operations in 2010, up from $455m in 2009, and employee numbers have increased to a two-year high of 8,676 (a rise of nearly 400 on 2009).
HSBC reporting this week would have been eyed warily by the Middle Eastern financial sector, with clashes in Oman, protests in Bahrain, ongoing violence in Libya and fears of contagion to Saudi Arabia at the forefront of many investors’ minds.
Along with Standard Chartered, which is due to report on Wednesday, it’s one of the most long-standing and larger international banks in the region. But HSBC said performance its Middle East operations hadn’t been “materially affected” by recent events, and that it “remains absolutely committed to its future” in the region.
This vote of confidence may in part be down to the fact that much of its expansion last year was in Egypt, a country going through a political transition following the ousting of long-term president Hosni Mubarak in the wake of mounting public protests.
Still, the Middle East isn’t as important to HSBC as it once was, with profits in the region accounting for 4.7% of the bank’s global total, compared to 18.8% in 2008. Mounting impairments charges on bad loans on the region also prompted the bank to cut its UAE staff base in 2009, but these more than halved to $627m last year.
Similarly, profits in it global banking and markets division illustrate the ongoing woes in the MENA investment banking sector. Pre-tax profits came in at $317m for 2010, down from $467m in 2010 and $816m in the boom period of 2008.
HSBC is the dominant player in the region bond markets, but depressed M&A activity and anemic numbers of new deals in the equity capital markets continue weigh on profits.
Nonetheless, the bank kick-started a new Abu-Dhabi dealing room last year, as well as a China desk in the UAE to support its ‘East-East’ business and has made some key senior hires over the last six months.
Your article seems to be only western-expats centric and oblivious of the fact that there are more financial services professionals of Asian and Arabic origin in GCC than the ones you have discussed about. Further, the latters have also proved to be as competitive, if not more than the former ones. Hence, please consider these issues as well instead of targeting a specific pool of talent only.