IDEAL POSITION

Kuwait 2019 | FINANCE | VIP INTERVIEW

HSBC's digital banking platform, combined with its global network and footprint, make it easy for companies to expand their operations into new jurisdictions.

What products and services is HSBC introducing to the market to align its strategy with Kuwait Vision 2035?

In 2019, our key focus will be on trade financing and cash management. We have a selection of products that will enable customers to manage their businesses seamlessly, cost effectively, and paperless. The aim is to drive digitization through a range of products and services that are available on HSBCnet—our award-winning liquidity and cash management platform—and a number of paperless trade and receivable finance products. In May 2019, we will reintroduce our receivables finance product in Kuwait to support businesses in effectively managing cash flows. Our digital banking platform combined with our global network and footprint make it easy for companies to expand their operations into new jurisdictions, especially in Kuwait, where opportunities for investment that are aligned with the New Kuwait 2035 development plan are ample.

How does HSBC's export finance facility help foreign investors expand their activities in Kuwait?

The bank's unmatched international footprint supports corporates based out of different geographies worldwide to set up in Kuwait, offering them not only full available banking services but also financing using HSBC's cross-border credit policy that allows subsidiaries to benefit from their HSBC relationship with the parent company. An example of this would be Chinese investors planning to be part of the Silk City project, a joint project between Kuwait and China and aligned to both Kuwait 2035 vision as well as the well-known BRI initiative. We are active in export credit support from countries overseas. In fact, the largest-ever export finance deal in the world was done in Kuwait two years ago for Kuwait National Petroleum Company's (KNPC) Clean Fuels Project. HSBC was the main arranger and coordinator. That was a USD10-billion deal of multi-sourced export finance from five countries, including the UK and other European and Asian countries. We are working with the large groups here on future versions and upgrades of that.

What potential does blockchain represent for the Kuwaiti banking sector and the end customer?

HSBC globally is taking a leading role in pioneering trade transactions through blockchain. In May 2018, HSBC together with another bank used a single blockchain application as the first of its kind in an export transaction of soybeans from Argentina to Malaysia for Cargill. There is great potential to help our clients save working capital, while improving speed and security in completion of transactions. Replicating such innovation will require collaboration between local and foreign counterparties, for which HSBC is ideally positioned. We have already started presenting the technology to our core clients and exploring the solutions that would concretely meet their current needs and challenges.

What are HSBC's operational objectives in Kuwait for 2019?

Our first priority would be to focus our efforts on the needs of our customers. We are concentrating on our strengths in trade and cash management with mid-market and large corporates, as well as engaging with the government in all its forms, including through the sovereign wealth funds and clearing companies. We have also been working closely with Boursa Kuwait, Kuwait Clearing Company, and the Capital Markets Authority (CMA) on the upgrading and modernization of the market and stock exchange. We have an interesting business for inward custody since HSBC handles the majority of the custodian activities for international institutional investors at the moment. With the recent admission of the stock exchange into the FTSE Russell Secondary Emerging Markets Index, there were two major influxes of funds in 2018 and a re-balancing in March 2019. Kuwait is also looking for MSCI to confirm the upgrade of the market to emerging market status in June 2019, which if confirmed would take effect in 2020. HSBC is establishing itself as the key banking partner for BRI in Kuwait. HSBC remains committed and optimistic about the future in a region undergoing a significant economic transformation.