HSBC returns to JaffnA:

To build international investor confidence

HSBC is the first foreign bank to open a branch in Jaffna after the 30 year conflict. The branch was opened on February 11. On this occasion the Sunday Observer interviewed the CEO of HSBC Nick Nicalaou on the bank’s decision to open a branch and what plans are in place for the branch. The excerpts of the interview.

Q: What made HSBC open a branch in Jaffna?

A: HSBC today is a leading financial institution in Sri Lanka’s banking sector that offers a wide range of banking and financial services tailored to meet a wide spectrum of needs, from those of multinational corporations to local businesses and individuals. Given our remarkable history of 117 years in banking and financial services in Sri Lanka, we are pleased to play our part in bringing a truly global banking experience to Jaffna and to empower the local community with our strong vision backed by initiatives and capabilities. Establishing HSBC’s Hexagon logo in Jaffna will be symbolic of our commitment to Sri Lanka in general and Jaffna in particular, and our aim is also to build international investor confidence and to support industrial growth, be it in travel and tourism, agriculture, or manufacturing as well as larger infrastructure projects, in driving the development agenda in Jaffna.

HSBC is very positive about contributing to the Jaffna local economy, and will be providing customers the ability to bank with an organisation which has a truly global reach. We will be able to connect Jaffna directly with the rest of the world, and handle both ends of remittance and investment transactions. We see the potential for many business opportunities and expect to be fully involved in them.

In actual fact, HSBC is returning to Jaffna, having first established its presence there in 1959, when the then Hongkong & Shanghai Banking Corporation Ltd. acquired the Mercantile Bank Ltd. But due to regulatory changes for foreign banks, HSBC’s operations were rationalized to one office in Sri Lanka and during 1973/74, the Mercantile Bank was closed and its offices sold to local banks.

Q: Will the bank get involved in financing infrastructure projects?

A: The Bank has facilitated over US$1bn of infrastructure lending in the power, water, harbour and telecom sectors during the past 12 months, cementing its place as a leader in the infrastructure space in Sri Lanka and will continue to do so, as the government’s ambitious plans to develop infrastructure facilities takes shape. HSBC remains the only bank with a local presence to be mandated as Co-Lead Arranger to both highly successful USD 500M sovereign bonds issued in 2007 and 2009.

Q :What is your targeted market segment?

A: Our Branch in Jaffna will be offering a full range of products and services for both Corporate and Personal Financial Services clientele similar to products and services offered throughout our existing branch network. Products will be customized based on requirements offering unparalleled flexibility and convenience. A strategy for SME clients has also been developed.

We will also be offering personal customers the opportunity to experience “ HSBC Premier” , which is HSBC’s flagship product globally.

This will provide customers with a personal relationship manager and a host of other unparalleled benefits and facilities. We will also be launching our HSBC Advance mid market proposition in mid February 2010.

Q: Has the bank introduced any new schemes to cater to the needs of the people?

A: The Bank will make use of its global connectivity to facilitate financial transactions of the diaspora. Our ability to combine both ends of international financial transactions, coupled with our expertise with in-depth local knowledge and experience, places us in a unique position to serve customers’ domestic and international needs.

In addition, fund transfer and foreign remittance facilities will be made available for the convenience of our local residents, and HSBC credit cards and loan schemes will be introduced to the Jaffna market. As mentioned above, a new mid market proposition named “HSBC Advance” will be introduced shortly for personal banking customers.

Q: What are the industries targeted by the bank?

A: We plan to support industrial growth, be it in travel and tourism, agriculture or manufacturing. Our Business Banking Unit, which serves the SME sector, in particular will have significant opportunities. We will also promote and support larger industrial sector projects of our economy to drive the development in these areas. We remain committed to catering to all segments of the community with a wide array of products and services.

Q: What was the recruitment plan?

A: Manifesting our stance as the “World’s Local Bank”, HSBC has recruited four out of seven staff from Jaffna. The Branch Manager himself is a local resident of Jaffna and well experienced, with comprehensive local knowledge in banking. He will be well supported by a dynamic team of individuals in delivering an exceptional service to our customers of Jaffna.

Q: What is the strategy to promote credit cards?

A: HSBC Credit Cards provide our customers the global recognition, safety and security and many other benefits and privileges that suit their life styles and we are pleased to extend this value proposition to our potential customers in the North of the country. We have seen an increase in the number card acceptance outlets in Jaffna and this will help our customers to start transacting more conveniently without carrying cash all the time. Customers can talk to our branch and sales staff to get more details about how to apply for a credit card.

Q: Any other observations and comments?

A: HSBC’s local network now consist of 15 branches and a Premier center, with automated service channels across the country. These include ATM’s, phone banking and internet banking services, easy pay machines, express banking centres and a 24 -hour call centre. In addition, the bank can be accessed through 156 local post offices and at over one thousand third party outlets, such as Cargills, Singer, NSB, Abans, Commercial Bank and Lanka Bell, for credit card payments and cash and cheque deposit services.

HSBC believes in supporting the local communities in which we operate. Jaffna is reputed as an illustrious hub of knowledge and the Public Library; is a monumental treasure that has long stood as a historic landmark and is of great significance to its people.

Hence, we are happy to donate to the library much needed equipment and study material today. Furthermore, as part of HSBC’s corporate sustainability initiative, 25 computers will be donated to Sarvodaya - Fusion and 200 scholarships granted to deserving youth in the North, East and South. This initiative was launched in Dec 2009, in partnership with Microsoft Sri Lanka and Sarvodaya to help build IT capacity skills among youth and improve their employment prospects.