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Friday December 2, 2011
By CECILIA KOK email@example.com
KUALA LUMPUR: London-based global banking and financial services provider HSBC Holdings plc has identified Malaysia as one of its seven priority markets in Asia-Pacific.
The country now stands alongside Hong Kong, China, India, Singapore, Indonesia and Australia, as areas in which HSBC will continue to invest aggressively.
“We continue to believe that Malaysia has enormous potential, providing significant opportunities for us to expand our business here,” HSBC chairman and group chief executive Stuart Gulliver told a media briefing.
He said Malaysia's gross domestic product (GDP) would likely grow by 5% next year. Such encouraging rate, he said, made it logical for the group to continue investing in the country.
The group's wholly-owned subsidiary HSBC Bank Malaysia Bhd planned to expand its network of branches to 57 nationwide by the end of this year. Of the total, 42 would be offering conventional banking services, while the remainder would focus on Islamic finance. At present, the group's network of branches in Malaysia stood at a total of 48, of which 40 were conventional and eight Islamic.
“Your country is one that has got the highest focus on developing Islamic finance as a core strategic priority,” Gulliver said, adding that the Government's initiative to build Kuala Lumpur as an Islamic financial centre would provide an opportunity for the group to expand its expertise.
HSBC is positioning itself to have a significant share of business in infrastructure projects in Malaysia, especially in the Iskandar region in Johor.
On the global economic outlook, Gulliver said the US economy would not experience a double-dip recession but muted growth, while Europe, which was still going through an acute phase of financial distress, would likely enter into a recession in the short to medium term.
Although a recent measure by six major central banks in the world to provide cheaper dollar funding to European banks had improved sentiment towards the embattled eurozone, Gulliver said such measure could only a temporary relief and would not fully address the core weakness in the region.
“In my opinion, what has to happen is probably three things: first, we need to see some kind of fiscal unity, especially between France and Germany; second, the ECB (European Central Bank) must be liberated from constraints so that it be a lender of last resort and Germany acting as a lender of last resort will not necessarily create hyper inflation; and lastly, the IMF (International Monetary Fund) must provide standby lifelines. If all the three materialised, they would provide a positive outlook to euro region,” he said.
Gulliver said Asia was not immune to the problems affecting the Western economies.
“The world obviously is coupled; recent years have proven that the theory of decoupling is not correct,” he explained.
However, he expected Asia's economic fundamentals to remain intact, and growth to remain rather resilient, albeit taking place at a more moderated pace.
“I think the trend that is set in stone now is that the dominant central gross domestic product growth has already moved from the West to East, and from the North to South,” he said.
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