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Ready to expand SME exposure in the UAE

HSBC also sees opportunity to augment high-quality liquidity

Gulf News

DUBAI: The unparalleled surge in business confidence in the UAE has prompted HSBC to commit more funds and resources to the country.

“The bank is committed to support the small and medium business by taking on more assets on its books,” said Stuart Nivison, Global Head of Business Banking.

He said the bank is keen on expanding its exposure to internationally oriented SMEs. “We have to be careful in choosing where we can be helpful which is why we are focused on the SMEs with international business linkages. Obviously we are not excluding others, but the internationally oriented SMEs are the segment we think we can help the most because of our global presence,” he said.

HSBC’s recent study showed the UAE’s trade relation with India is surging while its relations with a number of countries such as China, Malaysia and Turkey are on the rise. “All of these are markets where HSBC has a strong market presence and there are obvious linkages. These are trade corridors to us that are very important,” said Nivison.

Rapid industrialisation of the GCC countries is also driving UAE investments to these countries. “With the GCC governments spending a lot to make their respective countries more business friendly, the region needs more investments in infrastructure such as schools, roads, malls, and homes. We expect UAE-based SMEs to benefit from the big surge in infrastructure investments and government investments across the region,” said Chaker Zaraiki, Country Head of Business Banking, UAE.

While the GCC region is spending heavily on infrastructure, for the UAE, its world-class infrastructure is one of the most important drivers of business confidence and foreign direct investment. In HSBC’s expatriate survey, the UAE’s ranked one among the top in terms of expatriates’ preference as a place to live in. In addition, the emergence of the country as a trading hub is also contributing to the rising business confidence in the country.

While HSBC sees an opportunity in UAE based SMEs to expand its loan portfolio, the bank also sees opportunity to augment high quality liquidity from this segment of the business. “We take on SME exposures directly on to our balance sheet, but we see SMEs in the region also as a stable source of deposits. A large portion of our liquidity for the commercial bank as whole comes from smaller companies. Not all of them want to borrow. Some of these are actually cash rich. So, our SME business is not just an asset side story,” said Nivison.