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Discuss this article (31 Comments)HSBC sees 'rapid increase' in customer 'skips'
by This email address is being protected from spam bots, you need Javascript enabled to view it on Wednesday, 10 June 2009
zoomSKIP NUMBERS: HSBC has seen a rapid increase in the number of absconding customers since the autumn of 2008. (Getty Images)
HSBC in the Middle East has said it has seen a "rapid increase" in the number of absconding customers, or "skips" since the autumn of 2008 and added that there were no signs that the numbers were reducing.
Redundancies have led to large numbers of customers fleeing the region, leaving behind mountains of outstanding debt, bankers say.
HSBC, which has about 300,000 retail banking customers, said that skips account for half the bank’s bad debt, UAE daily The National reported on Wednesday.
“We have experienced a rapid increase in skips since the autumn of 2008 and there are few signs that this is abating,” George Lennox, the head of PFS credit at HSBC Middle East, told the paper in an e-mail statement.
Most had absconded to India, the Philippines, Pakistan or Britain, he said, and typically had worked in “areas of the economy most affected by the current conditions, ie construction, sale of property, etc”.
Major international banks are now reportedly taking a softer approach with customers in a bid to reduce the number of absconders, the paper added.
They have reassigned scores of employees to debt collecting, and have extended grace periods on loan payments, and set up telephone help lines offering financial counselling.
Citibank has also begun redeploying employees to its debt-collection arm and giving them added training in such courses as “soft” negotiating.
READERS' COMMENTS
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Banks!!!!!!!!
Posted by diarmuid, doha, qatar on Monday 2 November 2009 at 19:57 UAE time
My experience is in Qatar, where a year or two ago banks were offering loans of up to 7 years annual salary on demand. There were a lot of Range Rover Sports on the road thereafter! Expensive foreign holidays and Bling Bling Bling!
Expats suffered less when things went wrong because they were offered less but imagine being in a situation where all your earnings for the foreseeable future 8-10 years would go just to pay these guys back.
Now anyone who lent money like that deserves to suffer, they went to university and have banking qualifications are they blameless for the misery they caused by irresponsible lending? Of course not. Now that the gravy train has been derailed they are looking to find any possible way to increase profits, my HSBC deposit account pays 0.02% YES 0.02% interest, charges introduced for credit card borrowing from date of posting, charges for this that and the other!
Need a good smack and being sent to stand in the corner! Skippers make this judgement about how their own behaviour compares with the banks and act accordingly. Wrong? of course it is and the remaining honest people will pay to make up the loss. But banks have also a major responsibility for this and their present behaviour make them few friends!
Posted by diarmuid, doha, qatar on Monday 2 November 2009 at 19:57 UAE time
My experience is in Qatar, where a year or two ago banks were offering loans of up to 7 years annual salary on demand. There were a lot of Range Rover Sports on the road thereafter! Expensive foreign holidays and Bling Bling Bling!
Expats suffered less when things went wrong because they were offered less but imagine being in a situation where all your earnings for the foreseeable future 8-10 years would go just to pay these guys back.
Now anyone who lent money like that deserves to suffer, they went to university and have banking qualifications are they blameless for the misery they caused by irresponsible lending? Of course not. Now that the gravy train has been derailed they are looking to find any possible way to increase profits, my HSBC deposit account pays 0.02% YES 0.02% interest, charges introduced for credit card borrowing from date of posting, charges for this that and the other!
Need a good smack and being sent to stand in the corner! Skippers make this judgement about how their own behaviour compares with the banks and act accordingly. Wrong? of course it is and the remaining honest people will pay to make up the loss. But banks have also a major responsibility for this and their present behaviour make them few friends!
Fueling the fire…
Posted by SC, Dubai, UAE on Tuesday 14 July 2009 at 09:43 UAE time
First of all, I do not agree with ‘skipping’.
Secondly, I agree that the ‘customer service’ provided by UAE banks is extremely poor.
(I bank with HSBC and ADCB in the UAE and I can truthfully say that they provide the worst service I have ever experienced - across any service industry - anywhere in the world.)
TO THE BANKS…
Please consider VERY carefully what you are doing…
Case in point (and I have written to you explaining this);
I have paid off my credit card
I have put all my savings into your 1 year fixed deposit scheme
In short, I have done everything I can to provide liquidity to your bank and in return I’ve asked that you assist me with the repayment of my mortgage by;
-Reducing your RBR rate to reasonable levels (like the EIBOR rate), or
-Reduce the percentage I am paying on top of your unreasonable RBR rate, or
-Allow me to put surplus savings into my mortgage to reduce the monthly payments and interest, or
-Suggesting how I can reduce my monthly payments in the short term…
Your answer: NO
You leave your customers very little choice; ‘keep paying, until you can’t anymore, because we’ve got you by the short & curly’s’ or ‘skip’…
If I could go back in time…I would not by property in the UAE…and I would not bank with ADCB or HSBC
(my money would be safer… and… better invested under my mattress)
Posted by SC, Dubai, UAE on Tuesday 14 July 2009 at 09:43 UAE time
First of all, I do not agree with ‘skipping’.
Secondly, I agree that the ‘customer service’ provided by UAE banks is extremely poor.
(I bank with HSBC and ADCB in the UAE and I can truthfully say that they provide the worst service I have ever experienced - across any service industry - anywhere in the world.)
TO THE BANKS…
Please consider VERY carefully what you are doing…
Case in point (and I have written to you explaining this);
I have paid off my credit card
I have put all my savings into your 1 year fixed deposit scheme
In short, I have done everything I can to provide liquidity to your bank and in return I’ve asked that you assist me with the repayment of my mortgage by;
-Reducing your RBR rate to reasonable levels (like the EIBOR rate), or
-Reduce the percentage I am paying on top of your unreasonable RBR rate, or
-Allow me to put surplus savings into my mortgage to reduce the monthly payments and interest, or
-Suggesting how I can reduce my monthly payments in the short term…
Your answer: NO
You leave your customers very little choice; ‘keep paying, until you can’t anymore, because we’ve got you by the short & curly’s’ or ‘skip’…
If I could go back in time…I would not by property in the UAE…and I would not bank with ADCB or HSBC
(my money would be safer… and… better invested under my mattress)
To David
Posted by Moe, Dubai, UAE on Sunday 5 July 2009 at 08:57 UAE time
David, am not giving ny lessons here, and my comment was not addressed to the article as much as it was addressed to the comments, where some ppl were giving excuses for not paying their debts, like "bank employee" comment for example.
Sorry if you were offended by my comment, but it was not addressed to the commercial practice part of the story
Posted by Moe, Dubai, UAE on Sunday 5 July 2009 at 08:57 UAE time
David, am not giving ny lessons here, and my comment was not addressed to the article as much as it was addressed to the comments, where some ppl were giving excuses for not paying their debts, like "bank employee" comment for example.
Sorry if you were offended by my comment, but it was not addressed to the commercial practice part of the story
To MOE
Posted by David, Dubai, United Arab Emirates on Sunday 5 July 2009 at 08:47 UAE time
Hey MOE thanks for your Ethical commentary, but just to let you know if you are not aware how banks and other institutions works....is that regularly loans are renegociated (with sometimes a penalty) between the lender and the borrower. So it's not a question about paying it, skipping, or anything like that, simply instead of paying a higher interest rate against your oustanding loan, you do repay it faster! Banks may not make as much money out of the loan they gave to the borrower, however they do recover the full amount leant and the interests until such loan has been paid off... It's pure commercial practice. So thanks for the lesson, but it's not all about skipping and fleeing this country!
Posted by David, Dubai, United Arab Emirates on Sunday 5 July 2009 at 08:47 UAE time
Hey MOE thanks for your Ethical commentary, but just to let you know if you are not aware how banks and other institutions works....is that regularly loans are renegociated (with sometimes a penalty) between the lender and the borrower. So it's not a question about paying it, skipping, or anything like that, simply instead of paying a higher interest rate against your oustanding loan, you do repay it faster! Banks may not make as much money out of the loan they gave to the borrower, however they do recover the full amount leant and the interests until such loan has been paid off... It's pure commercial practice. So thanks for the lesson, but it's not all about skipping and fleeing this country!
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