HSBC reviews Iraq, maintains Egypt investment
Dubai, April 22, 2013
HSBC Holdings is reviewing its operations in Iraq while continuing to invest in Egypt despite a challenging near-term environment there, the bank's regional chief executive said on Sunday.
"In terms of Iraq, it's a market that we will continue to review," Simon Cooper, chief executive for the Middle East and North Africa, told reporters at a media event in Dubai.
He did not elaborate and declined to comment when asked for clarification.
HSBC operates in Iraq through a 70 per cent holding in Dar Es Salaam Investment Bank.
The lender's presence in Iraq has been the subject of speculation in recent months.
It had been due to be a bookrunner on a $1.35 billion initial share sale of telecom firm Asiacell but its name was absence from the deal when it took place in January.
Iraq's security and political situation has put off many international banks, although some Middle Eastern lenders have operations there, including Abu Dhabi Islamic Bank and Qatar National Bank.
Its banking sector is also dominated by two state-owned lenders - Rafidian and Rashid.
BUMPS IN THE ROAD
HSBC is in the last year of a three-year restructuring plan under chief executive Stuart Gulliver. It has closed or sold 47 businesses and cut 38,000 jobs around the world in an attempt to reduce costs and improve profitability.
Cooper said that Egypt was experiencing a number of "bumps in the road" as it transitioned to democracy but that the bank was continuing to invest in the country, pointing to a couple of branch openings in the first quarter of 2013.
Egypt's central bank introduced foreign exchange auctions at the end of December as part of efforts to stave off a currency crisis triggered by a run on the pound, which has lost around a tenth of its value this year.
Meanwhile, 12 days of talks between the IMF and the government ended last week without an agreement on a much-delayed $4.8 billion loan needed to ease a deepening economic crisis.
Cooper said the bank had no plans to begin operations in Morocco or Tunisia in the short or medium term, while its Libya business would remain at a representative office level for the time being.
The bank's regional priorities remain Saudi Arabia, the UAE, Qatar and Oman because of favourable economic conditions and high levels of planned infrastructure spending, Cooper said. - Reuters