David Eldon, Chairman, HSBC Bank Middle East Limited speaks to Mayank Singh about the bank’s performance, changes in the macro economic environment and future trends
Things have been challenging economically in the GCC region. How do you rate the performance of HSBC Oman against this background?

I have been around for long enough to know that things are cyclical but we have to always look at growth. As an organization, HSBC has been around for over 150 years globally and for nearly 70 years in Oman and so we understand that there is a need to look long term. It is important for us to know what is happening in the market today, but we also focus very much on the future, and plan accordingly. Here in Oman we have continued to progress and I am very pleased with the way the team is operating here. It has not been easy and any integration, like the one that we had with Oman International Bank (OIB), often takes longer than you anticipate and this has been no exception, particularly in an environment where the economy is coming under some stress. At the time we merged with OIB, we went through a substantial integration programme and re-focused our strategy to growing our business in Oman, while disposing OIB’s businesses in India and Pakistan, which were not a strategic fit for us. We have been concentrating on our customers in Oman, trying to provide them with services that are relevant to them. Globally and in Oman we see a number of banks that are ready to sell customers the products that they have in their portfolio. We have a slightly different approach as regards selling disciplines as we look at what products customers want and then tailor our products to suit their needs. We are a conservative institution and have robust risk management policies and practices, which we have built throughout our 150 years of history in different parts of the world. These help us navigate successfully through turbulent times in the global economy. We will continue to be conservative and hope that the improvements that we have seen within the Bank in Oman continue to allow (HSBC Bank Oman) HBON to head in the right direction.
The integration with OIB was supposed to happen in phases. Is the integration complete?
One can safely say that the integration is very much complete – indeed we stopped talking internally about integration issues two years ago. It is a real challenge when you take on another institution that has a different sort of structure to the one that you have been operating under. Blending different cultures, making sure that you have the right mix of people, making sure that people understand that they are operating under a very different regime all take time, especially when you are training them to help our clients understand that, uniquely in Oman, we are a part of a global network while at the same time also remembering that we are very much a bank for Oman, in Oman, following local regulations. There are things that the global network has learned from operating in more than 70 countries worldwide that we think should be applied to all of our businesses around the world, particularly in terms of customer relationship management, compliance, risk management, safety, security and these sorts of things. We are actively bringing these experiences into Oman for the benefit of Oman and our customers here. This is a differentiating advantage for HSBC Oman. We believe that we are doing the right thing for our customers because it protects them, and particularly for those customers that trade internationally because we have the network that other institutions
do not have.
HSBC Bank Oman has managed to grow, despite a challenging economic environment in Qtr. 3, 2016. Where is this growth coming from?
The growth has come from being very selective in who our customer base is, doing more high-profile business such as the work that we have done for Petroleum Development Oman (PDO) and the government. We have a large retail banking network which brings with it a large deposit base, and we have been very focused on ensuring that we give our retail customers the service that they want. We have spent a lot of time and effort to ensure that our staff are properly trained and as a result the service to the customer segment is continuously improving. As one example, Euromoney consistently rates HSBC Bank Oman as the Best Bank for Cash Management in Oman.
How has HSBC been doing in the
GCC region?
We have continued to successfully grow our business in the region. In the last three to four years we have exited a number of countries, which were not strategically fit for us. We want to concentrate on international trade, capital markets, premium retail banking, and other areas where we can leverage our differentiating strengths and provide our customers with solutions that fully meet their needs. We are committed to continuing to grow our business in the region.
High oil prices have been a determining factor for economic growth in the region. Has the fall in prices made HSBC recalibrate its strategy?
It has certainly made us think about it. A recalibration is an interesting way of putting it. Overall, we do two things – one, we look at countries over a long-term period from a strategic perspective and then we look at them on an annual basis. We tend to think long term on these things. Unfortunately, analysts look at the same issues as us but on a quarterly basis, and with a short term focus, which has the effect of making comparisons a little difficult. Every year, we look at various strategic factors, one of which in this region is the oil price, for which we do not see a huge change over the course of the next two to three years. This means that we are looking at the services that we are providing to our customers and are asking ourselves what is going to happen to our customers’ needs – those which we are striving to meet. Is trade going to continue to decline? Are other revenues going to decline and does the economic situation provide us with opportunities? Are companies in these countries going to look at alternative sources of funding and is that something that we can provide? Given the global nature of the HSBC Group as a whole, we are very well placed to provide new services that we might not have been otherwise providing locally. Do we still expect to grow our businesses? The answer to that is yes.
How are technological changes going to affect banking in future?
We have to be alert to the changes that are taking place in the market and respond to them speedily. I have no doubt that technological developments are going to continue to change the face of banking in the coming years. If you look at certain countries today, and I speak to people in Hong Kong and London in particular about the last time that they went to a bank branch, it was a long time ago. Visiting a branch is no longer necessary because they can do everything online and that’s where a number of banks are going, so digital technology is becoming extremely important. You will see us focusing more on our digital banking capabilities and continuously developing them. And as a bank, we have a duty to ensure that all such use of technology is secure.