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Egypt banks profiting despite economic turmoil, says HSBC
Published in Daily News Egypt on 16 - 06 - 2008

CAIRO: HSBC will continue to apply its growth and expansion strategies on the regional and domestic fronts despite the recent challenges facing global economies, bank officials announced in a press conference Monday.
At the inauguration of HSBC Bank Egypt's new head office on the Maadi Corniche, officials spoke to the media about pressing issues related to the banking and financial sectors in Egypt and worldwide.
HSBC Group is considered one of the largest banks in the world in terms of market capital, and its 20-year-long presence in Egypt has made it a key player in the local economy. With around 70 branches throughout the country, HSBC officials are confident that the bank will continue to expand, both on the corporate and retail levels.
"Egypt is a growing, well-based economy that is developing rapidly. It is important for financial services to keep up with the growth strategy in Egypt, said Stephen Green, group chairman of HSBC Holding.
Consequently, HSBC will continue to develop its branches and range of services in Egypt and the region, he said. HSBC Group's current strategy focuses on organic growth, rather than acquisitions. "That is our main opportunity now, Green said.
However, he did not completely brush off the idea of acquisitions or mergers, saying "never say never, but they should be done if they are priced reasonably and fit with the group's strategy.
On the domestic front, HSBC Egypt is currently focusing on expanding its branch network. With HSBC's branches currently concentrated in Cairo, Alexandria and Sharm El-Sheikh, the bank is planning to open branches in Mansoura, the Delta and Upper Egypt, said Abdel-Salam El-Anwar, HSBC Bank Egypt's chairman and CEO.
"On the business level, HSBC Egypt is keen on expanding its services to small and medium-sized enterprises (SMEs), which are an important segment to HSBC in general and a new segment to HSBC Egypt, El-Anwar said.
HSBC Egypt started laying the infrastructure foundation for SME operation two years ago and has effectively started lending to businesses with reasonable interest rates.
The impact of recent downturns in the global economy have reached the financial sector. While the subprime crisis in the US has decreased HSBC Group's revenues in that area, Green insists that is "a small portion of business.
This springs from the fact that HSBC's strategy focuses on emerging markets, rather than mature markets, and "emerging markets will continue to grow faster than mature markets, he said.
Green admitted that 2008 and 2009 are difficult years with many challenges to meet. "There is a clear risk of the US slipping into recession and then Asia will not be completely immune, he said. However, despite the difficult times, bankers and financial decision-makers must learn from this crisis.
On the other hand, Egypt has not been affected by the subprime crisis. "The majority of banks in Egypt are making genuine profits and the banking segment in Egypt is quite sound, El-Anwar said. However, with the rising domestic inflation rates, the Egyptian banking sector may not be so immune, since they are "part of the entire economy.
Nevertheless, HSBC has recently changed its strategy to continue to grow and expand in Egypt, despite the external challenges. To address a larger bracket of clients, since 2002, the bank has moved from being "a corporate bank, to one that focuses more on retail policies, El-Anwar said.
The presence of more banks in Egypt does not intimidate HSBC, who regard competition as healthy. "Foreign banks have definitely helped the performance of the financial sector in Egypt to improve, El-Anwar said.
HSBC's edge, is that it offers a unique quality of services, he boasted.


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