Asia’s growth rate will improve in 2009/10

by Surekha GALAGODA

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Asia will experience a slow down in growth in the second half of this year due to the lagging effects of the international slow down during the second half of last year and the first half of this year, but the recovery will be stronger in 2009 and 2010, said HSBC CEO for Asia-Pacific, Sandy Flockhart in Colombo during his first official visit to the country.

The Asian region is not doing badly at present though there is a global financial turmoil and Sri Lanka and the Maldives are expected to perform well, despite the expected slowdown.

Asia is the most exciting economic region in the world, where HSBC has strong roots, being the first bank in many of these countries and territories.

Rising inflation is presenting new challenges for the region and the global economy, but HSBC, with its strong global network and international connectivity, is well placed to meet these challenges.

Flockhart said that he was impressed with the progress made by the bank in Sri Lanka. It is the largest card issuer in Sri Lanka while the base of clients has also increased. HSBC in Sri Lanka has grown significantly in the past 10 years. HSBC has more than 1,800 employees working for the Bank in the country. In addition, our Global Resourcing Centre in Rajagiriya employs nearly 2,000 people. We are proud to offer opportunities for individuals to grow and develop locally as well as internationally.

Sri Lanka is pretty good in technology and banking infrastructure while the mobile telephony service is also good, he said.

HSBC is proud to play a role in Sri Lanka’s economic development, and will continue to support the infrastructure projects in the country. Flockhart said, “Our intention in Sri Lanka is to become the bank of choice in providing international banking services to both the personal and corporate segments, through our unrivalled global network and our growing domestic franchise.”

He said the HSBC Group reported solid results for the first half of 2008, despite difficult economic conditions particularly in the US and increasing turmoil in international financial markets.

HSBC’s pre-tax profit in Asia was up 20 per cent year-on-year to US$6.7 billion in the first half of 2008. This was due to strong growth in the business in Asia-Pacific outside Hong Kong, which recorded a robust performance, with pre-tax profit up 58 per cent to US$2.6bn.

As the leading international bank in the region, HSBC’s strategy is to position its businesses to capture the opportunities arising from Asia’s growing mass affluent and wealthy segments and its growing international trade and investment flows, Flockhart said. Our global connectivity enables HSBC to service customers at both ends of a transaction whether it be domestic, intra-regional or international.

HSBC, which has had a presence in the country for 116 years, is the largest foreign bank in the country and the leader in the credit card market in the country with 29 per cent market share.

The Bank has pioneered the use of automated banking machines and third-party distribution channels in Sri Lanka, with over 800 third-party outlets through which bill payments can be made.

Chief Executive Officer HSBC Sri Lanka and Maldives Nick A. Nicolaou in response to questions said that there will be no killer product that they plan to introduce but said that there will be other things. He said that HSBC will introduce a debit card shortly.