Banks need to reassess their relationship with small and medium-sized businesses (SMEs) to encourage the growth of the Bahraini economy, HSBC Bahrain said.

In the past, SME clients used to be relationship-managed alongside large corporate customers, which potentially lead to larger clients being given a higher priority, to the detriment of SMEs, the bank said in a statement.

"This segment was also to some extent relatively ignored based on a misperception that the SME customer segment has a relatively low profitability potential, and SMEs represent a higher credit risk", said David Jones, head of corporate and commercial banking for HSBC Bahrain.

"We are now fully launching our business banking unit to specifically cater to the needs of our SME clients. We have put in place a highly motivated and dedicated team which I am confident will deliver an unrivalled standard of customer service, in a much more organised manner," said Mr Jones.

The business banking unit plans several new initiatives over the next 12 to 18 months, such as the launch of new liability products to generate new deposits, and the launch of a small business loan product targeted to the lower end of the SME customer segment to meet the cash flow needs of clients, and to cover expenditure items such as rent and running expenses. TradeArabia News Service