HSBC’s UAE arm expects to post an increase in profits next year and is optimistic about its outlook for the coming year despite current global economic woes, its CEO said.
The Dubai-based lender, which last week said it would stop offering brokerage services to retail investors in the Gulf state, is positive about UAE growth next year, said Abdulfattah Sharaf.
“I am looking at next year’s growth, [it will be the] same, or a little bit of an increase. Generally you would see [growth] on the corporate side [and] the retail market is coming back,” he said.
Sharaf declined to comment how much its business would grow.
“I’m positive [about UAE]. I’m very optimistic and I see 2012 is steady and there will be a small growth in the market, definitely,” he added.
Economic growth in the UAE is expected to increase 3.3 percent this year from 3.2 percent in 2010, according to the International Monetary Fund.
Europe’s largest bank posted a 36 percent increase in first half profits in August but plans to cut 30,000 jobs by the end of 2013, about 10 percent of the total, in a bid to stem costs.
HBSC is reportedly in talks with talks with Oman International Bank over a sale of its operations in the Gulf Arab state, Reuters said on Oct 6, citing sources at the Omani bank.
The ratings agency Fitch downgraded HSBC Bank Middle East in July and said it expected earnings growth to be challenging amid fewer lending opportunities in the UAE and the unrest in the Middle East and North Africa.
It said the bank's asset quality weakened further in 2010, partly due to the classification of certain Dubai government-related entities as impaired.
Non-performing loans (NPLs) have “probably peaked”, but asset quality could remain pressured in 2011, said Fitch.