HSBC Eyes New Growth Opportunities in Middle East

HSBC Eyes New Growth Opportunities in Middle East
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HSBC Eyes New Growth Opportunities in Middle East

HSBC Eyes New Growth Opportunities in Middle East

HSBC is working on ambitious growth plans in the Middle East, North Africa and Turkey (MENAT), where a faster recovery in economic growth and trading in the post-COVID era is expected in the coming years, said Martin Tricaud, the Group CEO of MENAT and Vice Chairman of HSBC Bank Middle East Ltd.

“HSBC has ambitious plans for growth in MENAT, which is positioned to be one of the fastest growing regions of the world over the coming decade,” revealed Tricaud.

“We are investing to support the needs of customers across the entire spectrum of our business, from the investment plans of governments, multinationals and fast-growing smaller companies in our wholesale banking portfolio, to the wealth management needs of the millions of customers in our personal banking portfolio.”

The International Monetary Fund forecasts that the economies of the nine markets in which the bank operates in the region will see the value of gross domestic product (GDP) expand by 34.7 per cent in aggregate by the end of 2025 as nations recover from the sharp downturn triggered by the COVID-19 pandemic. Trade growth could follow a similar path.

Tricaud also said that HSBC is putting special emphasis on investments in technology, particularly its market leading HSBCnet application for wholesale customers to help them digitize transactional foreign exchange flows and accelerate digital payments, and with enhancements to the range of services on its mobile platform for retail customers.



Turkish Companies ‘Paying the Bill’ as Political Crisis Roils Economy

 Cats watch as fishermen gather their catch at Besiktas neighborhood in Istanbul on March 28, 2024. (AFP)
Cats watch as fishermen gather their catch at Besiktas neighborhood in Istanbul on March 28, 2024. (AFP)
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Turkish Companies ‘Paying the Bill’ as Political Crisis Roils Economy

 Cats watch as fishermen gather their catch at Besiktas neighborhood in Istanbul on March 28, 2024. (AFP)
Cats watch as fishermen gather their catch at Besiktas neighborhood in Istanbul on March 28, 2024. (AFP)

Turmoil unleashed by the arrest of Türkiye’s leading opposition figure last week has sent shockwaves through the private sector, forcing companies to rethink strategy and dig in for a period of uncertainty and potential economic instability.

The detention of Istanbul Mayor Ekrem Imamoglu, who leads long-serving President Recep Tayyip Erdogan in some polls, has provoked the largest anti-government protests in a decade, leading to mass arrests and international condemnation.

The move also sent the lira currency to a record low, fueling a sell-off of Turkish assets that has destabilized company balance sheets and driven up already high borrowing costs.

Company officials told Reuters that Turkish businesses across sectors were scrambling to reassess risk, with some already pausing planned investments and slashing budgets.

"The industrialists now have to pay the bill for a crisis they did not cause," said Seref Fayat, chairman of System Denim, which manufactures garments for leading Western brands and exports them to Europe and the United States.

Fayat, who also heads a garment industry lobby group, said his credit costs have spiked due to the market turmoil.

He had been drawing up budgets for a second-half expansion of his business in anticipation of an expected rebound in customer demand from Europe.

"We immediately shelved these plans following the latest developments," he said.

The lira has recovered somewhat after touching a record low of 42 to the dollar, but only after the central bank stepped in to prop up the currency.

And businesses worry more pain is on the way.

Expectations of declining inflation and lower interest rates following the adoption of an orthodox economic program that had promised Turks future relief after years of soaring prices and currency crashes, now seem in doubt.

In an unscheduled meeting last week, the central bank raised its overnight lending rate by two percentage points to 46%.

According to information provided to Reuters by bankers, short-term commercial loan interest rates have increased from an average of 42-43% to 52-53%, with some rates as high as 60%.

Morgan Stanley now forecasts any cuts to the central bank's policy rate will be shelved until June. And Goldman Sachs said it expected a hike in the policy rate by 350 basis points.

'EVERY COMPANY NEEDS A PLAN'

"The latest developments will affect companies' investment expenditures the most," Hakan Kara, a former central bank chief economist now on faculty at Bilkent University in Ankara, said on X, pointing out that investment had already been slowing.

"This will probably become even more apparent in the short-term."

The government has said the recent economic turmoil would be limited and temporary. But some company officials worry the crisis may only be beginning.

Elections are set for 2028 when Erdogan, who has dominated Turkish politics for more than two decades, will reach his term limit.

Many, however, see the arrest of Imamoglu, who was jailed on Sunday pending trial for graft, as an early indication he could seek to remain in power, either through an early election or constitutional changes that would likely face public opposition.

Mehmet Buyukeksi, a board member at Ziylan, which operates in retail and real estate, said expectations of a more positive business outlook in Türkiye based on government efforts to right the economy as well as strengthening demand were now less certain.

Improvements, including lower borrowing costs, that he had been expecting to see in July, he is now pushing back to September, he said.

And there are other knock-on effects.

One company official said some firms were carrying out human resources risk assessments, worried that they could face blowback if their employees participate in protests or share political content on social media.

Some conglomerates are reevaluating their risks in terms of exchange rates, inflation, funding costs and are significantly increasing the likelihood of negative impacts in their assessments, the company official said.

And a mergers and acquisitions consultant said that, while some foreign firms might look past criticisms that the Turkish government's actions are growing increasingly undemocratic, few will pour investment into an economically fraught environment.

"Everyone will re-do their calculations and books," said Fikret Kaya, the general manager of plastics and industrial equipment manufacturer Kayalar.

"We have had to make monthly evaluations that we used to make quarterly. I think every company needs to make a plan."