Credit slowdown to hit earnings: HSBC Mideast

An expected fall in credit growth in the Gulf to single-digit figures this year will hit HSBC Bank Middle East's earnings, its chief executive said yesterday.

"Credit growth will probably be in single digits this year in the region. Last year it was 25 per cent," Youssef Nasr said. Asked whether low credit growth would impact the bank's earnings, Nasr replied: "Of course," without specifying a time frame, adding deposit growth would be small.

The bank, which is part of HSBC, said earlier its 2008 full-year profit rose 34 per cent from the previous year.

Loan-to-deposit ratios are currently 80 per cent, he said, adding the bank had "liberalised" mortgage lending. Last month it said it increased its loan-to-value ratio to 75 per cent on its loan and Eibor-based (Emirates interbank offered rate) mortgage products as well as its HSBC Amanah Home Finance.

Earlier this month the bank announced a reduction of the minimum salary requirement for personal and auto loans to Dh10, 000 ($2,723).

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