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Thursday, January 17, 2013 - 05.00 GMT

Sri Lanka's economic prospects are exciting – visiting HSBC top official


Sri Lanka's economic prospects are exciting and the HSBC's business has grown each year since 2009 with top corporates increasing their trade in 2012, a visiting top official of the HSBC said.

The Global Trade and Receivables Finance division of HSBC Sri Lanka has seen phenomenal growth since 2009, with growth rates three times higher than the country’s GDP growth for 2010 and 2011; and despite trade falling as Sri Lanka countered a balance of payments problem, HSBC Colombo had a better year in 2012.

"The team here in Colombo has done a fantastic job and we have seen strong growth in trade. I am here to see how this fantastic performance came about. Sri Lanka is in a new era of economic growth and I am here to assess the opportunities for HSBC going forward," HSBC Head of Asia Pacific International Global Trade and Receivables Finance Huynh Buu Quang said, speaking to The Island Financial Review at HSBC Colombo upon his arrival to the country for a four day visit.

The economy which grew at 8 percent in 2010 and 8.3 percent in 2011, slowed down to 6.5 percent last year, still impressive considering the global economic slump.

The bank has provided S$ 3.5 billion worth of financing for various projects in the country ranging from aviation, maritime and infrastructure development.

Until 2009 HSBC Colombo’s trade finance division had seen "very" static growth. After 2009, growth "jumped very high". 2010 and 2011 were very good for trade in Colombo, but 2012 was better.

"This must have come from our existing customer base. They may have captured more market share. Our clients in Colombo our industry leaders so they definitely sustained themselves despite changes in the macro-economy last year," Quang.

Garments and tea have been traditional sectors serviced by the bank; but, since 2009, tourism, telecommunication, infrastructure development and oil bunkering sectors have increasingly accessed HSBC Colombo for trade finance.

"The industrial and manufacturing sectors continue to be strong sectors for us as well with good prospects for the future," Quang said.

"Another thing worth sharing is that we see a trend where trade is increasing between China, India, Bangladesh, Sri Lanka and Vietnam. Sri Lanka is increasingly playing an important role and this is a very important market for HSBC.

"I am excited about the prospects for the country and we want to make sure we can continue strengthening our position in Sri Lanka, and make sure we are ready to provide updated trade solutions to customers in Sri Lanka," Quang said.

"It’s common for emerging markets to export to developed economies. It is not uncommon for emerging market to export to other emerging markets because they share a lot of similarities. There is no negative issue with that. One of the trends we see is the internationalisation of commodities and the emergence of global supply chains to improve efficiencies. Sri Lanka can certainly play a part, by finding areas where Sri Lanka has a competitive role. Like I said, we already see increased activity between China, India, Bangladesh, Sri Lanka and Vietnam."

Quang said growth in global trade would outstrip global economic growth with Asia leading the way.

"Sri Lanka’s trade is certainly growing and as the county accelerates economic growth and improves conditions for foreign investors we will see more trade. Sri Lanka is already doing this and is among the top ten improvers in the World Bank Doing Business Index. HSBC is well placed to facilitate and partner in this growth. We are the number one global trade financier, accounting for 9 percent of global trade finance, which amounted to half a trillion US dollars. We can help Sri Lankan companies expand overseas or help external companies to enter Sri Lanka," Quang noted.






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Last modified: January 17, 2013.

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