HSBC reports strong profit growth in Mena

Dubai: In the Middle East and North Africa (Mena) markets, HSBC reported strong growth in profits with key markets such as Saudi Arabia and Egypt leading the earnings growth.

For the region as a whole, the bank reported a profit before tax (PBT) of $2.32 billion in 2019 compared to $.1.55 billion reported in 2018.

While Saudi Arabia reported a $1.15 billion profit before tax (PBT) compared to $436 million in the previous year, PBT from Egypt rose to $410 million, up 23 per cent from $333 million reported in 2018.

In the UAE, the bank posted a decline in profit before tax from $473 million in 2018 to $425 million, down by 10 per cent in 2019. The contraction came mostly from Global Banking and Markets and Corporate Centre.

While the Global Banking and Markets posted $55 million decline in PBT, year on year from $296 million in 2018 to $241 million in 2019, Corporate Centre reported a loss of $35 million.

Saudi earnings

Revenue from Saudi Arabia significantly contributed to the bank’s overall performance in the Mena region. HSBC’s participation in the Saudi Aramco catapulted the bank into the top 10 equity arrangers in Europe, the Middle East and Africa (EMEA) for the first time in five years.

The bank’s local presence ensured it played a key role on Saudi Aramco’s record $29.4 billion IPO last year, even after other Western investment banks were side-lined.

HSBC was also part of the Middle East’s biggest-ever acquisition, Saudi Aramco’s $69 billion takeover of SABIC. Additionally, HSBC was also hired by the Abu Dhabi National Oil Company when the state-owned oil giant sold a $5.8 billion stake in its refining unit.

HSBC, Europe’s second largest bank based in London but does most of its business in Asia, is caught among myriad uncertainties. From Brexit uncertainties to the Hong Kong protests and trade disputes between the United States and China. Now the new coronavirus is adding further uncertainty.

“We delivered good revenue growth in our targeted areas. Our Hong Kong business and our UK ring-fenced bank, HSBC UK, showed great resilience to produce adjusted revenue growth of 7 per cent and 3 per cent respectively, despite the uncertainty affecting both places during 2019. Our businesses in Mexico, India, the ASEAN region and mainland China also performed well,” Mark E Tucker Group Chairman said in a statement.