Rajiv Shukla, CEO, HSBC Saudi Arabia • Interview
HSBC achieved much over the course of the last year, in spite of the impact of the pandemic. Its large global network also helped it deploy digital solutions quickly.
How has the pandemic impacted your operations over the past 12 months, and how have you adapted to the new reality?
Everyone was forced to adapt, some successfully and some not so much. Given our systemic position in the local markets, our focus was to continue supporting our clients’ needs and keeping the markets functional, while of course also keeping our staff safe and able to deliver even on a remote basis. The support of our local and global shareholder partners ensured that our automation and digitalization was accelerated, and clients were not impacted by the shift to our modified way of working.
Was the impact contained, or was there a significant dip in activity due to the volatility in the markets?
We actually spotted many more opportunities as far as investment banking goes. For instance, in the very first month of the outbreak, the Kingdom was involved in issuing a large multi-billion-dollar bond. We were leads on the issuance, and were able to guide it to success, including then issuing one in a tranche with the longest issued tenor of 40 years, which held up well in the aftermarket. We also participated in a large syndicated loan financing for a GRE totaling USD10 billion. Having spotted the market opportunity, we pitched to key bank clients on the advantage of tier2 issuances. We did a few of those across the local and international markets, such issuances augmenting bank capital in addition to raising financing. We did the first “green” sukuk out of Saudi Arabia, for Saudi Electricity Company, and the first green ECA loan for the Kingdom’s Ministry of Finance—this was the first for a sovereign in the entire MENA region, in fact. We advised PIF in an M&A situation, co-investing with a Chinese investor into a port operator locally. We also advised on the largest-ever trade in the history of the Saudi Arabian market: the sale of SABIC shares by PIF to Saudi Aramco, and being the sole bank to cross the trade in the market. Similarly, we advised on the first government-led privatization for Saudi Grains Organization (SAGO), in line with the timeline put in place prior to the pandemic. We advised Saudi Electricity Company also on the conversion of its government liabilities, about USD45 billion equivalent in terms of size, into an equity-like non-dilutive shariah-compliant financial instrument. We also handled a number of cross-border M&A deals and successfully completed the first wave of government NCP-led PPP transactions for the construction of circa 60 schools. HSBC also helped kick-start the derivatives market on the exchange, and was the only foreign institution to be part of that initial set of banks at launch, and having provided a great deal of support to the market participants to reach that stage. We continue to help the market push developments on several fronts, for instance having done the first securities borrowing and lending trade, and more recently the first short selling trade. All these were done during the pandemic, and we hope to continue trailblazing on many other firsts as well while supporting the Kingdom’s Vision 2030 agenda.
What are your expectations over the next year?
I do not expect things to return to the pre-pandemic “normal.” Digitalization has “tasted blood,” as they say, and will accelerate. We already have a policy in place that allows for remote working, even post-pandemic: if the employee wishes and manager allows, they can work entirely remotely. As such, post-pandemic, there will certainly be a different way of working, although we do not see any signs of returning to anywhere near normal on the horizon and will continue to adapt. For instance, for the first time in more than a decade of running an investor conference physically in Saudi Arabia, we ran it fully virtually this year. We matched corporate clients with global investors, which took place at the end of March 2021.
BIO
Rajiv Shukla is the CEO of HSBC Saudi Arabia. He joined HSBC in 2004 and has held a number of roles, including head of global banking and markets and head of investment banking for HSBC Saudi Arabia. He has over 30 years of experience, including eight years with Citibank in the Asia Pacific and six years with Tata Steel in India. He has a degree in engineering from the Indian Institute of Technology and an MBA from the Asian Institute of Management.