Help, I forgot my username and/or password
HSBC is cutting back on some of its SME banking services in the UAE following a two-year internal review, the lender confirmed.
In a letter to a number of its small business customers, HSBC said account holders had 60 days to find a new bank as it sought to refocus its operations on larger, international customers.
“International business remains a key competitive strength that lies at the heart of our strategy, and we now aim to devote more resources to those customers we are best placed to help,” the letter read.
One business customer, who preferred to stay anonymous, told Arabian Business that they held accounts with HSBC in three separate countries and turned over in excess of $1m per year in the UAE alone. They said the notice of closure had been received “out of the blue”.
"While it is understandable that HSBC, like any business, has to focus on the customers that generate the most income for the bank, the way this has been handled is unbelievably bad,” they said. “There has been no consultation, and no apparent logic to their decision. It feels like they have just drawn a line across a piece of paper and said ‘get rid of these customers as quickly as possible’.”
In recent months HSBC has looked to shed less profitable segments of its business. In March the bank said it closed the accounts of some customers in the Middle East and North Africa with links to sanction-targeted nations including Syria and Iran, as it sought to reduce the heavy compliance costs associated with these accounts.
This in itself followed on from a $1.9bn fine in December after a report by US lawmakers accused HSBC of lax controls relating to cash coming from Mexican drug cartels and countries under US sanctions, such as Iran and Syria.
HSBC also announced an unspecified number of redundancies in the region last year, where it currently employs about 12,000 people.
A spokesperson for HSBC told Arabian Business that the bank remained committed to SMEs in the UAE. In 2012, the lender said it had almost fully deployed an AED1bn ($270m) fund for small businesses in the Gulf state. Eighty percent of this fund was awarded to SMEs that trade internationally, which is where the bank is increasingly seeking to refocus its operations in the UAE.
HSBC declined to give specifics on what criteria were being used in deciding on account closures, or how many customers were affected by the review.
"HSBC has been conducting a review of all its businesses since May 2011, to meet its goal of streamlining the business and improving the return on capital. As part of this, the bank is reviewing its portfolio of small business customers in the UAE," a statement from the bank read.
"The goal of the review is to identify SMEs that operate across borders, or intend to in the near future. Because international business is at the heart of HSBC's strategy, these are the customers whose needs it is best-placed to address," it said.
"By concentrating resources on this segment the Bank's aim is to give its customers greater support, including access to a relationship manager. Not only will they benefit from a personalised service and expertise in cross-border commerce, but it will help HSBC ensure that it meets its increasingly rigorous compliance and risk standards," it added.
Economic defences which the Gulf states built up after the global...
Gov't has previously has found it hard to promote start-ups in...
Confidence is returning to the Gulf’s private equity market after...
Love Emirates - don't love their pricing. Too many offers but the prices don't change on the routes that I fly.
Oil been dropping since mid-2014 yet... more
Hahaha - I think you miss the point. Yes it is a WORLD RECORD - congrats on that.........but it is of zero practical value. Be proud of achievements... more
Sunday, 25 January 2015 2:42 PM - Victory HeightsRobin, more like how can the people with enough money to buy these drones be so absolutely stupid as to use them in a crowded air corridor for commercial... more
Sunday, 25 January 2015 2:43 PM - Billy
@Doug. Oh I see...so it's ok to own a cheetah as a pet as long as the owner is licensed...
No..I was not turning this into East vs West. What I was... more
Really brave! I WOULD be amused, however, to see them try this stunt in Saudi Arabia. That would make for a highly amusing video more
Sunday, 25 January 2015 12:59 PM - GlenImpressive.. and inspiring.. one could learn a lot from people like Sir Maurice and also the founder of Uber (refer Simon Bumbder's post).. these are living... more
Thursday, 22 January 2015 1:04 PM - Rammohan M. RaiHere's another example of how selectively freedom of speech is practiced in the West: CNN's veteran anchor Jim Clancy, who served the news network 37 years... more
Sunday, 18 January 2015 6:00 PM - WHJ@PPM - in certain churches (namely Anglican and Lutheran), New Year's Day is the Feast of the Circumcision of Christ. However, New Year's Day is primarily... more
Monday, 5 January 2015 7:44 PM - DougJust when you think they can not do any worse, they come from nowhere to top it. So it is OK for a 50 year old man to marry an 8 year old child but it... more
Tuesday, 6 January 2015 12:29 PM - SAM
Banking & Finance Construction Travel & Hospitality Real Estate Technology Energy Media Retail Healthcare Education Transport
Join the Discussion
Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.
Please post responsibly. Commenter Rules