By Asmaa Nabil and Raghda Helal
HSBC Bank Egypt SAE’s Deputy Chairman and Chief Executive Officer, Jacques Emmanuel Blanchet, talks to Daily News Egypt to outline the priorities and goals that the bank holds in Egypt.
What is HSBC’s strategic plan for Egypt in the upcoming period?
We are an international bank with a strong presence in the Egyptian market. We are highly committed to Egypt, and we have been operating in the country for almost 35 years, and will continue to grow and support the Egyptian economy by bringing the strengths of our global expertise and international connectivity to the market.
What is the growth percentage planned for 2015?
Egypt is a priority market for the HSBC Group. We envisage continuing growth opportunities as a result of the strength our brand, diverse local footprint and industry expertise, coupled with our strong balance sheet. For example, with our impressive asset to deposit ratio, we have an appetite to continue growing our lending portfolio significantly, whilst supporting sustainable investment projects.
HSBC Group announced its intention to exit retail business in some emerging markets. What about the bank’s retail business in Egypt?
Egypt is one of HSBC’s 19 priority markets. HSBC is present in 65 countries and has two home markets, which are the UK and Hong Kong. In the Middle East, we have only three countries defined as a priority countries: the UAE, Saudi Arabia and Egypt.
Why is Egypt defined as a priority for HSBC group?
Egypt is considered a priority market for several reasons. HSBC has very strong presence in Egypt; we are ranked as the third largest private bank in Egypt in terms of revenues, and employ over 2,000 people. We have a strong presence in our three business groups – Global Banking and Markets, Commercial Banking, and Retail Banking and Wealth Management – and generate a good mix of revenue across these. Egypt is a large country of 90 million people, and its population is expected to increase significantly by 2030. This population growth will require support from financial institutions like HSBC. In addition, at the Economic Summit in March 2015, we saw a significant amount of interest in the Egyptian market from potential foreign investors. Again, this is something we believe we are well placed to support through HSBC’s global connectivity.
What are the sectors HSBC wants to focus on during 2015?
One of our priority areas is Global Banking, where we have a strong pedigree. Global Banking is achieving very good results and is where we seek to support the needs of the public sector and multinational companies. We will continue to develop and support this sector, leveraging our international connectivity and expertise, especially in the area of funding. For example, we recently supported key projects for the Egyptian General Petroleum Corporation and Vodafone. In addition, in Commercial Banking, we are focused on supporting companies that have international needs, because this where we believe we can add the most value. And in Retail Banking and Wealth Management, we remain primarily focused on those customers in our Premier and Advance segments, delivering a premium quality service at all times and through all touch-points.
Do you have an allocated portfolio for lending?
Yes. For example, in April 2015 we launched HSBC’s 2nd International Growth Fund, for which we allocated EGP 300m, to support international and internationally aspirant SMEs, i.e. clients who are importers and exporters.
Are there any new projects HSBC is currently studying to fund?
We are part of a number of important projects in several sectors, including energy, infrastructure, mining and agriculture. As you would expect, these remain confidential at the current time.
What was HSBC’s contribution to the Egypt Economic Development Conference (EEDC)?
We attended and participated in the conference debates. Importantly, as a result of the strength of our global credentials, we were able to identify and nominate many key multinationals to be part of this event. Following this event, we are working on a number of key projects. For example, we recently collaborated with two other banks to support a large project with Siemens.
Do you have any intentions to open new branches in Egypt during 2015?
Our network consists of 75 branches in key locations across Egypt, and we feel this is the right size that currently fits our customers’ needs. We do, however, continuously review how and where we operate, to ensure that we are able to offer the optimum service to our customers. Last year, for example, we opened a new branch in Cairo Festival City mall. We are also providing our customers with comprehensive digital banking solutions, including Internet Banking, Mobile Banking (with applications in Arabic and English), Call Centre and ATM services.
The CBE recently launched an initiative to increase mini branches; do you plan to increase this number in HSBC?
Currently, this is not in our plan.
What is the number of HSBC’s ATMs? Do you have any intention to increase this?
HSBC was the first bank to launch ATMs in Egypt. We have 237 ATMs currently, and are regularly upgrading these to ensure that they offer the best and most appropriate services to our customers. We believe our ATM estate is about right at the moment and are focusing more on renovating and upgrading these currently, rather than expanding this fleet.
Is HSBC planning to introduce new services to ATMs?
We already offer a wide range of services through our ATMs. We remain focused on regularly upgrading all of our digital platforms, including our ATMs.
What about internet banking security in the bank?
We offer “HSBC Secure Key” for Internet Banking, which is a highly secure system that provides our customers with an extra layer of security when accessing their accounts online. The Secure Key generates a unique PIN code each time a customer logs on to their accounts, and by being small enough to carry around, also makes it a very practical tool.
What about retail banking?
Retail Banking and Wealth Management is a good business for us, and we will continue to offer a premium quality service to our customers, with our offer primarily focused on our key priority segments of Advance and Premier.
What about the commercial sector in the bank?
We offer competitive products and services for corporate customers. Our role is to find the right financial solutions to meet their requirements. At HSBC Bank Egypt, we have dedicated teams of Relationship Managers and Trade Finance and Payments Cash Management specialists for example, to ensure we offer the best advice at all times. Our corporate customers can also access their accounts and transact online through our dedicated internet platform called “HSBCnet”.
In your opinion, how can Egypt change to become a cashless country?
We know that 90% of Egyptians don’t have a bank account. Clearly, more can be done to encourage an increasing number of Egyptians to open bank accounts, and the recent initiative whereby government employees will be paid ‘electronically’ directly into a bank account will help.
How could financial inclusion increase in the country?
The government salaries automation project is a good initiative, and one that will help increase financial inclusion across Egypt.
Do you think the market exchange rates are preventing investors from operating in the market?
I don’t think this is a big issue for investors. The Central Bank’s recent decisions have led to modernisation of the foreign exchange market in Egypt and this has delivered noticeable improvements already.
What is your evaluation for the current level of foreign reserves?
Foreign reserves are expected to continue to grow as we see improvements in some of the recognised sources of foreign currency, like tourism and projects related to the Suez Canal. Increasing exports (and Egypt has valuable resources like gas, mining and agrifood) will also help to increase foreign reserve levels.
Did the bank’s dollar deposits increase after the recent CBE foreign exchange decisions?
Yes, we have seen an increase.
What is the bank’s growth plans for deposits and lending portfolios by the end of 2015?
We want to increase our deposit and lending activities, although we want to see our lending activities grow at a comparatively faster pace through the funding of new projects that demonstrably support growth in the Egyptian economy. In 2014, our asset portfolio increased by 9% and our deposit portfolio increased by 11%.
What was the bank’s asset to deposit ratio in 2014? What is the expected ratio for 2015?
Our assets to deposits ratio in 2014 was 36% and we are hoping to see this increase in the coming years as we grow our lending portfolio faster than our deposit portfolio through the funding of new projects that demonstrably support growth in the Egyptian economy.
Are you planning to increase the bank’s investments in other companies or acquiring shares in them?
No. Our role is to assist companies by understanding and supporting their financial needs, as opposed to acquiring shares in them.
What about the bank’s corporate social responsibility (CSR)?
Giving back to the communities in which we serve is one of our key priorities at HSBC. Our Corporate Sustainability agenda is primarily focused on educational initiatives and raising awareness of environment issues, particularly around water conservation. For example, HSBC Bank Egypt participated in recently completed five-year EGP 100m project to develop new, and upgrade existing, commonly used public-owned infrastructure and services, in participation with local communities and the Cairo governorate. We will also be announcing a new important Corporate Sustainability initiative very soon that we are very excited about.