We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Mon 24 Oct 2011 08:19 AM

Font Size

- Aa +

HSBC UAE to post rise in profits next year, says CEO

Lender is optimistic about industry growth despite global economic woes

HSBC UAE to post rise in profits next year, says CEO
Abdulfattah Sharaf, CEO of HSBC in the UAE

HSBC’s UAE arm expects to post an increase in profits next year and is optimistic about its outlook for the coming year despite current global economic woes, its CEO said.

The Dubai-based lender, which last week said it would stop offering brokerage services to retail investors in the Gulf state, is positive about UAE growth next year, said Abdulfattah Sharaf.

“I am looking at next year’s growth, [it will be the] same, or a little bit of an increase. Generally you would see [growth] on the corporate side [and] the retail market is coming back,” he said.

Sharaf declined to comment how much its business would grow.

“I’m positive [about UAE]. I’m very optimistic and I see 2012 is steady and there will be a small growth in the market, definitely,” he added.

Economic growth in the UAE is expected to increase 3.3 percent this year from 3.2 percent in 2010, according to the International Monetary Fund.

Europe’s largest bank posted a 36 percent increase in first half profits in August but plans to cut 30,000 jobs by the end of 2013, about 10 percent of the total, in a bid to stem costs.

HBSC said on Oct 6 it was in discussions with Oman International Bank over a possible merger of the two lenders' operations in the Gulf sultanate.

“These discussions are at a preliminary stage and further announcements will be made in the normal course should the matter progress,” the bank said in a statement.

The ratings agency Fitch downgraded HSBC Bank Middle East in July and said it expected earnings growth to be challenging amid fewer lending opportunities in the UAE and the unrest in the Middle East and North Africa.

It said the bank's asset quality weakened further in 2010, partly due to the classification of certain Dubai government-related entities as impaired.

Non-performing loans (NPLs) have “probably peaked”, but asset quality could remain pressured in 2011, said Fitch.

Arabian Business: why we're going behind a paywall

For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.