Friday, Mar 30, 2012
Gulf News
Dubai HSBC Bank Middle East will retain as many employees as possible in the UAE following an announcement that they will acquire Lloyds Banking Group’s UAE operations.
The acquisition comes as the bank reassesses its global empire. HSBC recently announced it was reviewing its Asian businesses as part of an effort to cut 30,000 jobs and refocus on its most profitable businesses. The announcement caused panic among its employees.
HSBC Bank Middle East Ltd, an indirect wholly-owned subsidiary of HSBC Holdings, yesterday said it has entered into an agreement to acquire the onshore retail and commercial banking business of Lloyds Banking Group in the UAE.
The value of the gross assets being acquired is $769 million (Dh2.8 billion) as of December 31, 2011.
“The transaction, which is subject to regulatory approvals, is expected to complete in 2012,” a statement said.
Lloyd’s UAE onshore operations is being managed by 233 people.
Simon Cooper, Deputy Chairman and Chief Executive Officer of HSBC in the Middle East and North Africa (Mena) did not say how many will lose jobs when operations merge after securing regulatory approvals.
“We will work with and retain as many people as possible,” he told Gulf News.
HSBC’s largest operations in the Mena region are based in the UAE. The business being acquired from Lloyds has approximately 8,800 personal and commercial customers and a loan book of approximately $573 million as at December 31, 2011.
Strategic importance
“The acquisition underscores the strategic importance of the UAE, and of the Mena region as a whole, to HSBC,” Cooper said.
“The rationale [for this deal] is entirely complementary with our global and regional strategy to prioritise investments where we see the highest potential for growth,
“We see a very high potential for growth in the UAE. It is already a market where we expect to see significant growth.
HSBC, which has been in the UAE since 1946, has eight branches here. HSBC’s Middle East unit made $728 million in net profit in 2011. Meanwhile, the UAE customers of Lloyds TSB need not worry, a spokesperson for Lloyds said.
“On Sunday, when our customers approach our bank they will continue to receive the same service from the same personel. It’s business as usual as the deal is still subject to regulatory approval,” the spokesperson told Gulf News.
Abdul Fattah Sharaf, CEO of HSBC UAE, said: ”The UAE’s political stability, international connectivity and strong economic growth makes it extremely relevant for HSBC’s retail and commercial banking growth strategy.
“Therefore, we saw this deal as a strong opportunity to increase our scale here. HSBC knows the Mena region better than any other bank, and our assessment of the risk, return, and cost elements of this transaction are all positive.”
“The site of the branch on Al Wasl Road is in an area not represented by HSBC’s physical presence and we look forward, subject to the approval of the regulator, to offering Lloyds customers, as well as HSBC customers, the convenience of this premium location.”
However, in a recent report, credit rating agency Moody’s said some banking systems in the GCC countries could face funding gaps in the event of a sustained retrenchment by European banks from the region.
“The UAE has the most open economy compared with its Gulf peers,” it says.
key sectors
expansion benefits
Massive expansion in key sectors (tourism, transport, trade and logistics and real estate) has turned the country and its corporates into some of the biggest and most prominent international borrowers in the region. European bank financing into the UAE economy represented a total of $99 billion, or 28 per cent of the country’s GDP as of September 2011.
— S.R..
By Saifur Rahman?Business Editor
Gulf News 2012. All rights reserved.
