International disaster for the world's local bank

[Slick]

International disaster for the world's local bank


How ironic that the first bank to offer Islamic mortgages in Britain should be targeted by terrorists, writes Mark Tran

Thursday November 20, 2003
Guardian Unlimited


The latest outrages in Turkey, killing at least 15 people and devastating both the HSBC bank headquarters and the British consulate, raise the awful prospect for British companies that they will become terrorist targets.
For HSBC, the world's second biggest bank, the attack presents a particularly cruel dilemma for an organisation keen to expand in the Arab world.

HSBC, which prides itself on its sensitivities to local customs - it calls itself the world's local bank - is already the largest and most widely represented international bank in the Middle East. Under the name of HSBC Bank Middle East, HSBC was voted best bank in the Middle East this year by Euromoney magazine.

In the UK, HSBC was the first big high street bank to offer Islamic mortgages, as part of its drive to tap the potential of a new market. How cruelly ironic that a bank seeking to service the needs of Muslim communities around the world should be singled out as target by what were probably Islamist fundamentalists.
There has already been a knock-on effect on other British companies in Turkey. Britain's biggest insurer, Aviva, which employs 1,600 people in the country, has temporarily closed one of its offices situated near to the Istanbul headquarters of HSBC.

If today's attacks on HSBC will make British companies around the world feel more vulnerable, their effect on Turkey could be even more calamitous. The bombings could deal a tremendous blow to a Turkish economy only now struggling out of recession and still facing huge debt repayments over the next year.

A tenuous return of foreign investment could be jeopardised by any continued atmosphere of danger and instability. The financial impact of the attacks was felt immediately. The Istanbul stock exchange was closed after the explosions, but not before the stock index had dived 7.3% amid panic sales.

But then, these attacks characteristically hurt local people more than the western interests targeted. That was true of the bombings against the US embassies in east Africa and it is true of the terror attacks in Iraq, where Iraqis bear the brunt of the casualties.

News of the death and destruction in Istanbul cast a dreadful pall over George Bush's state visit to Britain, making a mockery of US and British claims that their war on Iraq had made the world a safer place against terrorism. For HSBC that has certainly was not the case today.