Rebalanced portfolio

Global banking giant HSBC shifts towards corporate clients in Turkish branch

Dunya Executive - - FRONT PAGE -

HSBC Bank, HSBC Group’s Turkish subsidiary, will focus on middle- and high-income customers on the consumer-banking front and corporate and investment banking on the enterprise side, its general manager Selim Kervanci said in an interview.

Currently, 55 percent of its loans are made to corporations and 45 percent are in the consumer segment, but the bank plans to change this balance to 65 percent corporate loans and 35 percent consumer. “We will proceed by focusing on segments where we are strong and can deliver good service, where we can create value,” Kervanci said. “We already see that we are on the right course. We’ve done very detailed performance analyses. Turkey has a very strong and sound banking sector. There are different things we can do, thanks to our global network.”

Underscoring that HSBC Group has been strong on the corporate side since acquiring the British lender Midland Bank in 1992, Kervanci said the bank determined that the segments in which it will make a difference in Turkey are corporate banking and investment banking, as well as with higher income customers on the consumer side.

“We will focus on client segments in 2017, and our growth will generate from this focus,” he said. “Thanks to our global network, we can mediate when Turkish companies go global, on investments coming to Turkey, for different financial instruments and issuances. We can create a difference in foreign trade financing, brokerage operations, operation bank- ing and public finance. Therefore, those have become our focus. We will work with international companies, big corporate companies, companies that want to go global and public-sector and financial institutions on the corporate side. And we’ve seen that we can make a difference in the middle-high and high-income group. We can create value for our clients with our experience and qualified fund management aimed at those groups.”

Kervanci said HSBC Bank will also focus on savings management and that credit cards remained an important product.

“We are the biggest foreign-capitalized and globally operating portfolio-management company, with a 4.8 percent market share in qualified funds composed of value-dated investment funds, which exclude money markets and liquid funds, and we have a 4.2 percent market share in pension funds,” he said.

“We will pursue the strategy that we’ve been focusing since the second half of 2016,” Kervan- ci said. HSBC Bank has spent the last year organizing to implement this strategy, thoroughly reviewing branch and product restructuring, and will no longer seek to serve non-competitive products, he said. “The radical part of this period is over,” he added.

“We determined our branches in regard to the locations of our clients. We are proceeding with 90 branches. Currently, we are seeing the desired results from our branches,” Kervanci said.

When asked how this focus will affect the allocation of loans, Kervanci said: “Credit allocation is currently 55 percent corporate and 45 percent consumer. This balance will become 65 percent corporate and 35 percent consumer, eventually. We foresee that this balance will be realized by mid-2018. We will grow 15 percent in assets, 15 percent in loans and 15 percent in deposits. We manage our balance sheet in a very liquid way”.

HSBC Bank has 1.5 million individual banking customers and 2,500 clients on the corporate banking side. “We are not aiming to raise this figure to 5,000. We want to intensify and raise the strategic dialog with these companies,” Kervanci said.

Enlarging the garden According to data that Kervanci provided, the lender arranged six syndicated loans, club credit and country credit used in export funding, each valued at $1.6 billion. It also issued nine international eurobond and sukuk facilities, valued at $6.2 billion, and completed Turkey’s first bond issuance project, valued at 288 million euros.

Kervanci also said his bank is working on projects to provide access to different financing products for more enterprises. HSBC Group “operates in 70 countries. We are the biggest bank in Asia and the oldest one in the Middle East. We think there is interest in Turkey from sector-leading companies with strong growth potential. We create different investor bases and enlarge the garden,” he said.

Selim Kervanci, HSBC’s general manager in Turkey, discussed the bank’s new road map, in which corporate banking will be more dominant than consumer banking.

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