While the mood in the local market remains upbeat and optimistic after the end of a three-decades long conflict, this is not going to do it alone; there has to be a strong pull to attract the necessary capital as well as a reduction in bureaucracy, better execution and a stronger will on the part of the government, says HSBC Asia Pacific's Head of International, Paul Leech.
Paul Leech |
He further cautioned that it was "important to move now" since "international capital doesn't hang around". Speaking exclusively to the Sunday Times FT on the occasion of his second official visit to Sri Lanka, his first being two years ago, Mr. Leech noted that there had been a "remarkable" change of mood, with the customers being "very quietly optimistic about Sri Lanka's new era".
He further indicated that the local operation remained open for business and immediate plans included expanding its asset and credit card bases while continuing to grow its local balance sheet, people, branches, etc., as evidenced by HSBC's plans to "shortly" open a branch in Jaffna.
When asked to comment on a recent appeal to the heads of local banks to make credit more accessible by Sri Lanka's Central Bank Governor, Ajith Nivard Cabraal, Mr. Leech indicated that, while "this sort of appeal" had been made by a number of countries, banks were only a catalyst; adding that it was "not a supply of credit issue" as "underlying commercial demand for new lending has been muted". He did admit however that "all banks were a little bit muted right now" and "not as aggressive" with some being "reticent to take on new borrowing".
Meanwhile, he did note that there was no drop off in development projects with HSBC's local operations facilitating US$ 1 billion in infrastructure financing in the last 18 months. In fact, he indicated that the bank had been instrumental in a number of new, big projects, from Colombo's South harbour to the recent bond deal to the London Stock Exchange's acquisition of Sri Lanka's Millennium Information Technologies, completed this week, for which HSBC "handled the financial flow" for its major global client, the London Stock Exchange.
Referring to the regional financial situation, Mr. Leech indicated that while Asians were typically "chastened" by today's global financial conditions, their mood remained "optimistic". This was particularly the case with emerging markets where most banks were shielded from the worst of the so-called "toxic assets". |
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