HSBC plans low-key lending target<\/p>\n
Tony Hotland, The Jakarta Post, Jakarta<\/p>\n
London-based Hong Kong and Shanghai Banking Corporation Limited
\n(HSBC) has set a conservative lending target for 2004 amid
\ngovernment pressure on banks to revive their lending role.<\/p>\n
The chief executive officer of HSBC in Indonesia Richard
\nMcHowat said on Thursday that the bank was only targeting a 10
\npercent to 15 percent increase in loans over 2003, mainly for
\ncorporate borrowers with an export orientation.<\/p>\n
\"To revive the lending role, we need support from the
\ngovernment in terms of the legal system because it hasn't changed
\nmuch since the crisis. I think that's what makes many banks
\nreluctant,\" said McHowat.<\/p>\n
He also said that in order to accomplish the target the bank
\nwould see whether the corporations seeking loans were credible
\ncandidates.<\/p>\n
\"The companies should make proper audits of their accounts and
\nconduct better corporate governance in order for us to make a
\ncredit judgment,\" he said.<\/p>\n
McHowat said the reason the bank's main target was the
\ncorporate sector was due to the low rate of individual borrowers
\nin the country.<\/p>\n
\"Indonesian households don't really borrow and use loans. The
\naverage household debt ratio is only 10 percent compared to the
\nGDP, which is the lowest compared to other Asian countries,\" he
\nsaid.<\/p>\n
Besides that, he added, HSBC wanted to provide international
\nnetworks for domestic exporters, given the international status
\nof the bank.<\/p>\n
The government has frequently urged the country's banks to
\nresume their intermediary role of providing loans. Experts
\nbelieve that despite the stable macroeconomic figures reported,
\neconomic recovery is still low, given the low investment rate and
\nlimited credit flow.<\/p>\n
HSBC gave loans worth up to US$800 million to about 2,500
\ncompanies mainly in the textile, shoe, tobacco, and steel sectors
\nin 2003.<\/p>\n
McHowat added that the bank had no expansion plans, such as
\nopening new offices to add to its present 12 branches.<\/p>\n
\"We intend to improve our current services and products, such
\nas credit cards, mutual funds, and sharia (Islamic) banking. The
\nmarket for sharia banking is tremendous here, but we've only
\nfocused on developing the corporate and institutional sectors,\"
\nhe said.<\/p>\n
HSBC, with a total Islamic customer base of around 115,000
\nworldwide, was the first foreign banks to offer a sharia service
\nin the country in Oct. 2003.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/hsbc-plans-low-key-lending-target-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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