HSBC’s Middle East unit increases lending in Q4

Reuters/Hamad I Mohammed

• Loan book at $20bn
• Outperforms other regions
• Outlook ‘strong for 2024’

HSBC’s Middle East subsidiary expanded its loan book in the fourth quarter, outperforming the bank’s other units.

Customer lending at HSBC Bank Middle East was $20 billion on December 31, up $1.6 billion, or 8 percent, on three months earlier.

Worldwide, HSBC’s customer lending fell by 2 percent over the same period.

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The Middle East subsidiary, which is wholly owned by HSBC, made a pre-tax profit of $1.2 billion in 2023, up from $728 million in 2022.

“The Middle East region performed very well economically in 2023 and the outlook remains strong for 2024, notwithstanding the risks arising from conflicts in the region,” states HSBC’s 2023 annual report, which was published on Wednesday.

“As countries like Saudi Arabia and the UAE continue to diversify their economies, new opportunities are created to connect them to Asia, and Asia to them.”

HSBC Bank Middle East’s 2023 annual net interest income soared to $1.6 billion from $903 million a year earlier. The increase came despite a relatively modest 2 percent year-on-year increase in its net loans and advances to $20.1 billion. Annual fee income rose 4 percent to $475 million.

Investments by the unit’s retail customers totalled $3 billion in 2023, up from $2 billion a year earlier.

Commercial real estate lending stood at $1.5 billion on December 31, down from $1.7 billion a year earlier. The bank’s substandard or credit-impaired real estate loans fell to $325 million from $480 million over the same period.

Global annual profit at HSBC surged 56 percent to $22.4 billion in 2023.

However, the bank made a loss of $153 million in the fourth quarter versus a profit of $4.4 billion in the prior-year period. It took a $2 billion loss on the sale of its French retail banking operations and $3 billion of impairments on its stake in China’s Bank of Communications.

HSBC’s shares were down 7.7 percent early on Wednesday, slumping to a four-week low.