The Singapore-based Regional Head of Commercial Banking, International Markets, Asia Pacific for HSBC, Stuart Rogers, recently visited Mauritius as one of the key international markets under his purview. Besides the island economy, Stuart looks after the global bank’s commercial banking businesses in Bangladesh, New Zealand, Philippines, Sri Lanka, Taiwan, Thailand and Vietnam.
We spoke to Stuart in an exclusive interview where he touched upon on a range of subjects such as how he sees the island economy progress as the gateway to Africa; the key watchwords for its development as a financial services hub; and the emerging sectors such as renewable energy, pharmaceuticals and healthcare that will power future growth. With HSBC Mauritius having moved to a LEED certified building in Icon Ebene in Nov 2022; supported local conglomerate Cim Finance’s thrust on hybrid and electric vehicles; and engaged recently in a sustainability marketing exercise with a Metro wrap campaign, Stuart makes it clear that the bank is committed to support the transition to a net zero global economy, and to help our customers on their sustainability journeys.
Edited excerpts:
What is the purpose of your visit to Mauritius?
This is my first time in Mauritius so it’s great to connect with colleagues and clients to understand the business drivers in more detail. Mauritius is an important part of the HSBC international growth strategy and its deep connectivity to both Asia Pacific and as a gateway to Africa has been a key strength of our business for a long time.
Having spent several days here, I am proud of the work the team has done in Mauritius over a challenging period and the fantastic client relationships we have across the industry spectrum. While the pandemic has brought excellent technological developments in its wake, nothing beats being face to face with people and building that connectivity in person.
Having joined the bank in 1999 and held a number of senior positions in Commercial Banking, Strategy and Risk Management across Sri Lanka and Maldives, Indonesia, Hong Kong and Australia, what is your view on the APAC region?
Looking back at my career today, I would say that it’s an incredible privilege to have worked across so many different markets and cultures in the region. It is one of the strengths of the organisation to empower people with the opportunity to experience so many markets, and it really helps us in our delivery to clients to have first-hand market experience.
More than three-quarters of our wholesale client revenue is connected to international networks and over 45% of our business is cross border. Thus, the international proposition is not just fundamental to our operations but also drives a lot of our revenue flows. We are well placed when it comes to payment and liquidity solutions, trade and supply chain financing, and sustainable financing all through to investment banking.
Overall, we have a very positive outlook for the Asia-Pacific (APAC) region and believe that it will remain a key growth engine for the world.
In particular, which markets would you pinpoint as being regional frontrunners for economic growth and accompanying opportunities, especially in view of the twin challenges of rising inflation and interest rates facing economies across the globe?
In China, the reopening is proceeding apace and when you look at some consumption and service sector markers, they are poised for rapid improvement. This has implications not just for the country but also has expansionary benefits for the region and, more broadly, globally.
Closer to Mauritius we have India, where the economy is poised to become the third largest in the world by the end of the decade. The market boasts highly attractive growth engines as well as a dynamic and enterprising business sector. Indeed, speaking to some of the businesses in Mauritius has indicated that a lot of investment is going into India and there is a great deal of positivity around the narrative.
Southeast Asia is the third, key pillar to this and is seeing continued, significant investment in terms of FDI. The supply chain re-orientation is not a new narrative but continues unabated, and while we know China is reopening, we are seeing a lot of movement into the ASEAN economies. Within the domestic economies there are significant and rising levels of consumer spending and strong underlying economic growth, with some of the strongest GDP growth globally coming out of Southeast Asia.
Finally, in those markets as well as China and India, all three have a strong thematic focus around digitalisation, and are really pushing forward in this space. Overall, we remain very positive about the region and the opportunities it offers, and, notwithstanding the macroeconomic headwinds, we feel very strongly about the region and its prospects.
How is Asia-Pacific faring against the pandemic and global economic uncertainties?
Let me start closer to home and go outwards.
In Mauritius, based on my interactions over the last few days, we are definitely seeing a return to growth and clients are starting to look up and out at both domestic and international opportunities.
All in all, we have moved past resiliency into a growth phase. Notwithstanding macro conditions, people now recognise the need to go forward and start making investments critical to their business growth and we are starting to see that reflected in our own pipeline. Sustainability is a key driver, and so is the connectivity piece, particularly reestablishing in South-Southeast Asia if we look to the Eastern side and Africa if we look to the West. We have a positive outlook there.
Economically, as well in Mauritius, some of the newer sectors such as renewable energy are really taking off, especially on the back of the government’s commitment of 65% local renewable energy generation by 2030. Also sectors like pharmaceuticals and healthcare, for which Mauritius has not been so well known in the past, are emerging as new growth areas.
From an HSBC perspective, I am pleased that we have been announced as the Market Leader and Best Trade Finance Services Provider for Asia-Pacific in the EuroMoney Trade Finance survey. This win is an incredible testament both to the team and the work they are doing here, and to our clients who actively support and partner with us.
More broadly, I spoke earlier about the key growth drivers in the region. My assessment is that people have moved past COVID and where they are from a business perspective – and are really looking forward to taking on new opportunities, particularly around how they can create sustainable growth with some of the different dynamics that are currently playing out regionally and globally.
In particular, ‘sustainable, digital, and international’ are the three themes we consistently see around the markets I have visited and where we operate around the region.
As business normalcy slowly returns, it is being observed that many regional companies in the APAC market have seen this period of digital adoption as a short-term switch rather than a strategic shift. Meanwhile, HSBC has taken a lead in digital transformation initiatives, with focus on cutting-edge innovations such as digitising the Letter of Credit process by using blockchain technology. How is HSBC working to ensure that its clients are continuing their thrust to digitalise?
At HSBC, digital is at the forefront of most of our conversations with our clients and internally around our business. Speaking for myself, I would say the switch to digital is a strategic shift more than a tactical one during the pandemic, even as I note that the pandemic accelerated digital behaviours and helped us leapfrog by a few years.
The numbers speak for themselves. In Mauritius, 98% of our customers are already on a digital platform. Globally, 96% of our payments are processed digitally. As one of the largest trade banks globally, 80% of our local trade transactions are already done electronically through investments we have made in our trade platform and upgrading the API architecture. In Mauritius, we introduced instant payments during the pandemic and implemented LiveSign so clients could have cloud-based eSigning capabilities, and the penetration of these different platforms and systems has already accelerated apace.
Having said that, I agree that we need to work constantly so we don’t regress to pre-pandemic levels and ensure that this shift is a strategic and sustainable narrative rather than a tactical one.
As one of the international markets under your purview, how can Mauritius enhance its role as a gateway to Africa and beyond?
Mauritius is a great success story and has been for a long time an attractive stepping-stone for investments, predominantly into Africa and Asia, but more broadly across the world.
When you look at some of the statistics here, Mauritius ranks first on ease of doing business in Africa, is rated as the 9th freest economy globally, and possesses a high GDP per capita as well as a high skills base. In particular, the island’s workforce possesses the complementary skillset for the key sectors that power the economy’s growth narrative.
Its demographics and narrative have also changed over the last 15-20 years, with enhanced focus on service sectors and higher-end manufacturing sectors such as renewables, pharma and healthcare as well as emphasising its value proposition as a financial and trade hub straddling the two continents that its most closely linked to.
For my part, I feel that for Mauritius to move ahead, the focus should be around using the constructs at its disposal and getting the message back out post-COVID to continue to bring in companies and investments to the island economy with the skills at hand. A lot of the work ahead is not about revolutionising the market per se, but simply getting the word out there about the competitive advantages of Mauritius as a market.
Coming to sustainable financing, HSBC has professed its commitment to transition to net zero carbon emissions in its own operations and supply chain by 2030. How is the shift to sustainability playing out for the APAC region?
A lot of different elements must come together for ensuring a shift to sustainability. For instance, locally, Mauritius is known for its biodiversity, so it is a key part of the proposition here that we protect the local assets and ensure that the industries working around them can flourish.
More broadly, in the APAC region, we need $1.5 trn in green investments to attain the SDGs by 2030. This is a huge commitment by any standards, and the narrative goes beyond financing. Having said that, financing is a key enabler of the journey, and, from an HSBC perspective, we have marked up to a trillion dollars globally in finance and investment by 2030 to help our clients take forward their business in a sustainable way. Along this journey, we intend to innovate and scale different solutions and partnerships to help our customers and communities manage their transition. So, it goes beyond the first phase of ‘Here’s a project and we will give you a loan’ to ‘What is your transition strategy and how can we partner with you on that?’.
To illustrate, we worked with Cim Financial Services to support their environmental efforts around Hybrid and EV, as well as solar and rainwater harvesting solutions. Broadly, we look at the key, heavier use sectors in Mauritius such as textiles, transportation, oil and gas, and automobiles, where there is an active dialogue going on around what each sector’s sustainable strategy is, and how financiers can support them on this journey.
We note that HSBC Mauritius facilitated the second Birla Carbon green loan in mid-2022; moved to a LEED certified building in Icon Ebene in Nov 2022; and engaged recently in a sustainability marketing exercise with a Metro wrap campaign. Could you elaborate on these and other efforts that are seeing HSBC Mauritius take a proactive role in the sustainability space?
I touched upon some of these elements in my earlier response where I mentioned how we support clients in their sustainability efforts. At the outset, it is key to identify client strategies and play into those actively, so it is a win-win for both our customers and communities, and for us as an institution to support communities in the right way.
There is also a big piece here for us around upskilling and knowledge building that starts internally. That is a work in progress as the space is evolving quickly and we need to keep up to speed with this fast-paced evolution to ensure that our staff are equipped with the right knowledge to have relevant conversations with our customers and partners.
Last year, in Mauritius, we launched the MIoD sustainability certification to help young graduates and people who are passionate around sustainability build the subject matter expertise that will be required in the short to medium term.
Our strategy on sustainability is focused on supporting clients with their strategies, enabling our colleagues to bring up their knowledge curve and be equipped to have the right conversations, and working with partners in the community to take the agenda forward.
Any last thoughts you’d like to share with the Platform Africa audience?
In Mauritius, we feel firmly that the growth trajectory is coming back like in many other markets where HSBC operates. We would like to send out the message that we are open for business and are ready to actively work with our customers and markets as they take the next steps forward both internationally and domestically in their growth journeys.
