Sept 03, 2008 (LBO) – Asia continued to do well amidst global financial turmoil and Sri Lanka and the Maldives are set to perform well, despite an expected slowdown, a top HSBC official said. In Sri Lanka the bank has also been providing aggressively and has also become more cautious in its credit card business, where it is market leader with a 29 percent share.
Inflation in Sri Lanka hit 29.9 percent in April and one year risk free rates are around 18 percent.
Flockhart says it is natural for consumer weakness to emerge when rates and inflation is high, and banks have to manage asset impairments.
He says HSBC continues to look for opportunities in the island with the bank having already become a financier of infrastructure, especially in the power sector. It also finances the government.
The Sri Lanka office also oversees the Maldive islands, a tourist paradise.
Flockhart says Maldives, which caters to the premium segment, could be expected to weather a downturn in its generating markets better than other countries.
But high fuel prices which push up ticket fares could pressure occupancy.