HSBC to open five more local branches

JAKARTA (JP): Hong Kong and Shanghai Banking Corporation (HSBC) Indonesia will open five new branches by mid next year to tap the estimated higher growth in the country's future foreign trade.

Public affairs manager Mia Korompis said of the five new branches one would be in Bali's provincial capital of Denpasar and two in both Jakarta and Surabaya.

"We are now working on the regulatory approvals," she said during the bank's official launch of its newly installed Trade Service Website in Indonesia.

It would take a period of between six to nine months to complete all the preparations to open the new branch offices and to make them effective operations, Mia added.

Head of Trade Services Dahlia Tarjoto said HSBC believed the expansion would allow the Hong Kong-based bank to tap a surge in the demand for trade finance services in the coming years.

She was upbeat the demand for such services would continue to increase in the future, in line with the improvement in the country's overall economic activities.

"We hope to increase our trade finance clients by 50 percent next year," Dahlia said.

The size of total credit facilities extended to HSBC's trade finance customers currently stood at some US$400 million, of which $285 million was outstanding, according to Dahlia.

Trade finance credit facilities are extended to importers and exporters. Importers use the facility to purchase their raw materials overseas and exporters use it to obtain a bridging cash payment before they receive payment on their exports.

"We provide trade finance facilities to a wide range of non oil and gas industries in Indonesia such as those of textiles and garments, shoes, furniture and various consumer goods," Dahlia said.

The Trade Service Website provides trade customers with information about trade products, regularly-updated economic news, trade tutorials and other updated trade data.

The service is also available to the general public who use the Internet. It provides trade education, such as tips to reduce the risk of exports not being paid by their purchasers or importers not receiving their designated goods due to misshipment.

Trade finance service officer Antonius Sukriswanto said HSBC would likely continue to pay more attention to trade finance in the investment loan portfolio sector in the coming years following the economic crisis.

He said the bank also had investment loans in its portfolio, but their size was relatively insignificant.

HSBC, headquartered in London, has been in Indonesia since 1884 and currently has seven branch offices; two located in Jakarta and the others in Surabaya, Medan, Bandung, Semarang and Batam. (udi)