Arab Spring revolts disrupting bourses, pushing up cost of borrowing in region, says exec
HSBC Holdings Plc’s Middle East unit expects a “short-term”
slowdown in revenue because of unrest in the region, said Steve Bottomley, head
of strategy and planning for the Middle East and North Africa.
Political turmoil that toppled the rulers of Tunisia and
Egypt and is continuing in Yemen, Syria and Libya increased the cost of
borrowing for companies and governments in the region and disrupted stock
HSBC, which is ranked the second-biggest underwriter of
bonds in the Gulf, arranged 50 percent less in sales this year, according to
data compiled by Bloomberg.
Europe’s largest bank by market value said last month it
plans to cut less than three percent of its workforce in the Middle East and
North Africa to improve efficiency.
“It’s too early to determine the full impact of the regional
crisis,” Bottomley said today at a news conference in Dubai. “There will be
some revenue slowdown in our business in the short term.”
The London-based bank managed $862.8m in Gulf bond sales
this year compared with $1.7bn in the same period last year.
The Middle East unit almost doubled pretax profit in 2010 to
$892m as provisions for bad loans declined amid a rebound in the region’s
economy. Pretax profit fell 74 percent in 2009 to $455m as loan-loss charges
“We’re not seeing anything significant at the moment, but we
expect to see a slowdown in Egypt and Bahrain,” he said