SMEs in UAE vent fury over HSBC closures

Small business community annoyed over bank's decision to cut back on SME business

SMEs have vented their frustration over HSBC’s decision to cut back on some of its banking services in the UAE.

Following a two-year internal review, the lender said in a letter that some of its small business customers had 60 days to find a new bank as it sought to refocus its operations on larger, international businesses.

“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.

The decision has been met with fury by some of HSBC’s customers, with many claiming that they will struggle to secure replacement banking services.

“The world's local bank feels more like the world's worst bank. Sad that after six years of banking with them, all they could was sent me a registered mail,” said one Arabian Business reader who is a customer of HSBC.

Another added: “Does it not occur to HSBC that any ongoing business has cheques in the market, letters of credit that are current, accounts with suppliers and clients for funds payment... none of which terminate in 60 days?”

One customer told Arabian Business that they had formally registered a complaint with the UAE’s Central Bank over the forced closure of their account.

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.

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Posted by: Tarek Saad

2) to continue my previous comments please I need a good advise what I should do . Now I am in real risk with this action and my business is in risk .i am very very disappointed and all banks dealing with us as Ex HSBC with bug suspicion .

Posted by: Tarek saad

1) I have a RAK free zone company since 2011 and Rak advise me to open the corporate account at HSBC my company growing every year in stable success all the time the communication with HSBC made either by official internet banking inbox massages or by direct email to the company email address or by tele conversation , the P.O BOX is not the main communication with the bank espiialley with the important issues , on September 23rd made wire transfare personally at Jabel Ali branch at second day went to bank ask for depict card but the shocked me with the closing the account and decision has been taken since June and the will issue a bank check with my company balance. One week after I got the checks but hardley to find a bank accept my company to open bank account which cuse many projects loss to me , now I have have new bank account with other bank but I can't release my HSBC checks that gave to my bank with over 2 weeks the corresponding bank inform us they checks under investigation-

Posted by: M Gordon

We never wanted to be an HSBC client in the first place but had little choice once Lloyds bailed out. We new from reports in the business network how bad HSBC perform as a financial institution. Now HSBC are dropping us as as they shed thier SME's. Good thinking HSBC!

Unfortunately they have forgotten that SME's are their future existence not to mention the life blood of most countries core economies!

What they have done to us (SME's) will not be forgotten. Perhaps they should check the qualifications of their own decision makers! Any school of business will teach you the importance of helping SME's.

Good for other local banks though. More power to them.

Posted by: dominic docherty

I am a ex lloydstsb retail and corporate bank account holder. We have been moved to HSBC after they completed their service. Now the 8am to 5pm 6 days a week has become 8am to 3pm 5 days a week. Although they don?t do anything international on a Sunday so really its 4 days a week.
They want us to continue to bank with them but their customer service and the tools they use internally are so terrible that the service they are offering is beyond pathetic. International transfers taking over 2 weeks, queries to relationship managers go unanswered....
We are moving our business to a local UAE bank... cant wait to be rid of them.

Posted by: clarify

I dont know if they are getting worse or desperate.

I am a Premier customer. Have been for years.
Had an email from them yesterday asking if I wanted to become a Premier customer as I meet the requirements.

I asked them why they sent it. A mistake they said.
Sure enough, another email blast out saying sorry and to ignore it.

Maybe HSBC is just desperate and getting even more worse?

HSBC Group should be looking into the Dubai operation. Quite a pantomime going on here.

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