HSBC not worried about Gulf property sector exposure despite war volatility, CEO says
British lender HSBC is not worried about its exposure to the slowing property sector or the health of its corporate loan book in the Gulf region despite the war-driven economic contraction this year, its group chief executive has said. The provisions, just shy of $400 million for potential loan losses, taken so far by Europe’s second-largest lender for its Middle East exposure, are “benign”, and…
HSBC, Europe's second-largest lender, is not concerned about its exposure to the declining property sector or corporate loan book in the Gulf region, despite the ongoing war. The bank's CEO, Georges Elhedery, stated that the provisions taken for potential loan losses, just under $400 million, are "benign." Elhedery assured that the bank remains vigilant and prepared for any challenges that may arise, but the short answer is that he is not worried.
He emphasized that HSBC keeps a close eye on the situation, acknowledging that some challenges may arise from the geopolitical environment, but many are likely to be part of normal business operations. The US-Iran war, now in its eighth month, has severely disrupted economic momentum in the region, with retail, aviation, hospitality, tourism, and real estate being among the hardest-hit sectors.
The war has not significantly impacted HSBC's business, with the majority of the $400 million provisions modeled on economic and growth outlooks.
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