HSBC expands global securities services in Abu Dhabi Global Market

Lender secures an arranging custody licence for its key clients

HSBC is expanding its global securities services in ADGM. Galen Clarke / The National

HSBC has expanded its markets and securities services unit in the Abu Dhabi Global Market (ADGM), obtaining an arranging custody licence for its sovereign, institutional and investment manager clients.

The expansion will provide institutional clients with global custody services, connecting them to a custodian network in 96 markets around the world and providing a digital platform for securities services activities.

“HSBC is investing in its wealth management capabilities across all customer segments, from sovereign and institutional clients, to family offices and ultra-high-net-worth individuals, through to investment managers and retail customers,” Abdulfattah Sharaf, chief executive of HSBC UAE and head of International at HSBC Bank Middle East Limited, said.

“Our new presence in ADGM complements HSBC’s existing securities services presence across the region and around the world,” he added.

The UAE, the Middle East's business and tourism hub, was ranked 19th globally in the list of top 20 countries for attracting foreign direct investment, and the first in West Asia and the Middle East and North Africa region, according to the UN Conference on Trade and Development's World Investment Report.

Custody services — the safekeeping and servicing of securities and other financial assets on behalf of customers — enable cross-border financial flows and support the risk management requirements of asset owners and investment managers.

The bank's banking and markets capabilities in the UAE and wider region helped clients in the Middle East and North Africa raise more than $19 billion from investors worldwide in 2021 and more than $15bn in the first half of 2022, Nabeel Abdul Rahim Albloushi, HSBC's head of corporate sales for the Middle East, North Africa and Turkey, and head of markets and securities services in the UAE, said.

“The UAE’s position as a hub of financial market activity is clear from the past year’s boom in IPO listings across the country, so it is more important than ever for HSBC’s global custody business to be on-the-ground, connecting directly with customers in the nation’s capital," he said.

"This expansion responds clearly to the needs of our clients and further extends our ability to connect international investors, sovereign and institutional investment managers from Abu Dhabi, to capital markets around the world.”

HSBC, Europe's largest lender, is one of the world’s largest global custodians and held $10.8 trillion of assets as custodian for clients as of December 2021, 7 per cent higher than at December 2020, it said.

HSBC earlier this month said profit before tax in the second quarter remained stable as a rise in revenue and net interest margin helped it to offset an increase in charges for expected loan losses amid mounting global economic uncertainty.

Pre-tax income for the three months to the end of June stood at $5.01bn, slightly lower than the $5.06bn reported at the end of the same period last year.

Reported revenue for the April-June period increased by 2 per cent to $12.8bn, primarily reflecting interest rate rises.

HSBC, which is increasingly focused on Asia to drive income, said all its regions were profitable in the first half.

The lender said its revenue outlook remains positive, based on the current market consensus for global central bank rates and its continued mid-single-digit percentage lending growth expectations for 2022.