The Malta Business Weekly caught up with Ian Stuart, HSBC's head of Commercial Banking Europe and Group general manager, during his three-day visit in Malta. He explains HSBC's trade strategy and his views on the bank's operations in Malta.

Last week you gave a speech at EY's Malta Attractiveness Survey conference, which was well received by those present. As well as talking at the event, can you tell us more about why you're visiting Malta as well as a little about your career?

This is my first visit to Malta and I didn't quite know what to expect. Obviously, I did background research but it's always good to get here and really see it with your own eyes. My reason for coming here is straightforward; Malta is one of our key countries. Of the 19 countries we operate in across Europe, the UK is one of our largest markets. Outside of the UK, France, Germany, Bermuda and Malta make up the bulk of the European business. I was conscious that I hadn't been to Malta and I wanted to come and meet our people and customers as well as attend the well-organised EY annual conference on Malta's attractiveness.

I'm conscious that our people in Malta are doing a lot of work with our customers in the Financial Crime Compliance space. I want to emphasise that I care about that work and that it's really important to get it done properly so that we can move forward with confidence and grow our business.

Regarding my career, I started working in banking on my 16th birthday and I'm now 53 years old. I have always been in banking. I joined HSBC about two-and-a-half years ago and I took up my current role as head of Europe for Commercial Banking just over 14 months ago.

What have been your first impressions of Malta as a country, the people and the business?

I believe that you can get a good first impression of a country from probably the first conversation you have when you land at the airport - the conversation with your taxi driver. My driver told me that Malta's economy is strong and booming. During the taxi journey, I started counting the number of cranes working on various projects, which generally is a good indicator of the pace of a country's economic growth.

Malta is vibrant and I've met many of our customers already. I've been really impressed by their enthusiasm and their confidence for the future, as well as the quality of the businesses here. The Malta Freeport is a great example. I could not resist taking pictures of the port which is enormous, especially when you consider the size of the island. I really commend the foresight of the people of Malta, who years ago decided to commit huge sums of money into the island for a port which will serve Malta well into the future.

How is HSBC helping businesses grow both at a local level but also connecting across the European region and the world? 

HSBC is a major player in Europe, one of the largest banks in the region and we continue to expand. From a Commercial Banking perspective, I think most people understand our remit; we look to connect our customers to opportunities and we try to be where the growth is. HSBC aims to help businesses grow and to help fulfil their dreams and ambitions. Delivering on that purpose can be complicated because you are bringing people together from across the world to do business. Additionally, the macro environment in Europe is difficult, with the prevailing negative interest rates and the Brexit situation in the UK which are a couple of key issues.

Enabling our customers to tap into growth opportunities, especially through the trade corridors with Asia and North America, is an important priority for us. We're seeing our customers benefit from our work in connecting European trade corridors and we're excited to increasingly share the value of HSBC's global connectivity.

As an example, at an event here in Malta, I met a customer in the packaging industry. Just a week before, I was in Chicago speaking to a customer who operates in the same industry. Now I'm going to connect our customer in Malta with our customer in the US within the next 24 hours. That's what we do. I feel really good about that and the customer here in Malta is delighted about the opportunity. I'm curious about where the connection will lead to.

 

While banking principles have remained the same, there's increasing focus on compliance and risk management. Can you tell us a bit about how our customers and readers should see this?

I am not going to apologise to anyone for getting our own house in order, whether it's from a Financial Crime Compliance or Regulatory Compliance perspective. We operate in a very compliance-driven global industry and it's important that we, like everyone else, abide by the rules of the game. I want to work hand in glove with the regulators towards what I know is a common goal ‒ a safe trading environment. Our customers may feel that we are probing them and it might make them feel a bit uncomfortable, however, it's important that we get this right.

The quality of our customer files, which have been built up over 30 and 40 years, is not as it should be. So we've got to make sure that we know our customers really well ‒ exceptionally well ‒ and make sure we understand where they are trading and how they do business. To me, it is simply good business practice and I strongly believe it's in the interests of our customers, shareholders, the banking sector and the global economy.

We'll make a lot of progress over the next 6 to 12 months as we are bringing in new tools and new technology to help us have a safer and stronger bank.

Sometimes customers don't understand why they are being asked for extra information. What would you say to these customers?

I completely understand that customers get frustrated, especially if they've dealt with us for 30 or 40 years. This is not happening only in Malta - it is right across the globe. What we've got to do is make sure that at a global and industry level we understand what our customers are doing and that we get to know our customers really well.

How does Malta fit in the global trade corridors space?

First of all, I don't see Malta as small and I think the country punches above its weight. Developing new trade corridors are opening up opportunities for Malta, for example in the technology, electronics and packaging industries.

I'm impressed by Malta's tourism industry and during this visit I've met one of the leading entrepreneurs at the heart of the developments taking place in this sector. I was impressed with the phenomenal quality of the hotel he is running. The management and the technology being used as well as the tourist market have changed markedly in the last few years. Malta is well placed to capture the opportunities arising from the fast-paced advances in technology. I also had the opportunity to meet the Maltese Tourism Minister who was extremely bullish about the tourism prospects. As I said, I don't see Malta as small; for hundreds of years Malta has benefited from its strategic geographical location at the centre of the Mediterranean. If anyone is in any doubt about this, just go pay a visit to the Malta Freeport.

Malta is a mere six miles away from the main shipping route between Europe and North Africa and Asia. The location offers many opportunities, such as expanding the country's trade offering via warehousing and logistics. North Africa is not far away and neither is Sicily. I am convinced that in my lifetime Africa will come online and when I say my lifetime I mean my working lifetime. When Africa does come online, the trading in Africa is going to explode. I think Malta is well positioned to capture some of that.

How do you evaluate HSBC's business in Malta?

I want to be clear that HSBC is committed to the Maltese community. We are not going to dilute our investment. In fact, to the contrary, we are going to push on here in Malta. As I said earlier, I was keen to come and have a look at what we are doing here. Now that I have seen for myself, as well as having met the management team, colleagues and our customers, I can go back to London and formulate plans for the next phase of investment in Malta.

A key takeaway for me has been the real buzz I felt in the offices. I couldn't believe how busy and energetic it felt. I can tell you that you don't get that everywhere ‒ so that was really good.

We are absolutely committed to the island; there are growth opportunities but most of all we've got a very loyal customer base and we have a duty of care to these customers.

Our customers should know that HSBC will continue to be there to support them. I think we've got a bit to do in terms of our level of service, but hopefully over the next 12 to 18 months our investments will come through and our customers will feel the benefits.

We couldn't not ask you about what's happening in your home country, namely Brexit. What's your view on the current state of affairs?

Indeed, I don't think that I can do an interview these days without talking about Brexit. The first thing I want to say is that, on a purely personal basis, I was hugely surprised with the result. I have four children, and they too were surprised at the outcome. But my only concern now is how I can work with our over one million business customers in the UK and help them take advantage of the next five years. As to what will happen, there are differing views. Some people think it's going to bring amazing opportunities, while others are a bit more sceptical.

One thing that I can say is that businesses won't wait. Businesses are planning now and they are pushing forward. Exporters are quite bubbly about the pound being down to about 1.25 against the dollar, so exporting is going well for them. Clearly importing is going to be a little more expensive. However, nothing has happened as yet, and UK businesses have stayed positive. But let's not be under any illusions as we've got a lot to do as a nation over the next 12 to 18 months. We've got to get trade agreements sorted out with many countries.

What was your key message during the EY conference on Malta's attractiveness survey?

I wanted to share what we are trying to do here in Malta and secondly what we are doing globally. Despite being primarily a trade bank, we do so much more than that. HSBC is strong on cash management and, with our global footprint, we can connect customers. So my message is, as a bank, we've got a responsibility to businesses globally. We need to help our customers to get closer to the action and make sure they trade safely in a strong, sustainable business environment so that they can fulfil their hopes and ambitions.