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Went to a social gathering last night and had a brief chat with one of the guests. Told me that if I had any money in HSBC - to get it out soon. Didn't go into details, but said that HSBC is facing some serious problems.

Just thought I would pass this on, especially since a forum member was being asked to pay the bank to withdraw his money.

Bora Bora wrote:Went to a social gathering last night and had a brief chat with one of the guests. Told me that if I had any money in HSBC - to get it out soon. Didn't go into details, but said that HSBC is facing some serious problems.

Just thought I would pass this on, especially since a forum member was being asked to pay the bank to withdraw his money.

HSBC might be having problems?... Understandable!!

HSBC gonig under? .....Not likely, if it's involved in Dubai's debt!

HSBC is too big and too important to collapse! Gordon Brown and company won't let that happen!!

Well the discussion was brief and I wasn't given any insight as to what the problem or problems are. I was just given a heads up. I don't know if HSBC deposits are "protected" in Dubai as they may be elsewhere. In the US banks provide FDIC coverage for each account up to a certain amount. I don't know if that protection exists in Dubai. I'm sure deposit protection exists in the UK. Remember: this is Dubai. It doesn't mean company practice in one part of the country is necessarily practiced somewhere else.

I don't know if he was referring to HSBC universally or locally. More than likely the problems are with the locally based banks and if they have run into serious Dubai debt problems, they may just close the branches here.

Edited to add:

I just came across this:

http://www.benzinga.com/economics/46444 ... or-lenders

According to a JPMorgan (NYSE: JPM) report released today, the Royal Bank of Scotland (NYSE: RBS), the largest UK government controlled bank, arranged $2.3 Billion or 17% of the total Dubai World loans. The report also said that HSBC (NYSE: HCS) has the largest absolute exposure in U.A.E., with $17 billion of loans in 2008.

According to a report released in Bloomberg Press, Abu Dhabi Commercial Bank PJSC may be owed $1.9 billion by Dubai World, making it the largest creditor outside the emirate. The Bloomberg report, citing a report from RBS, also said British banks have the most to lose among international lenders from a crisis in the United Arab Emirates, with a combined $49.5 billion of loans outstanding. Standard Chartered bank has also got some exposure due through Istithmar PJSC. Barclays Bank & Credit Suisse have said they do not have major exposure in the Dubai World.

HSBC dropped 7.1 percent in Hong Kong, the most since March 9, and was 1.2 percent lower in London, extending a 4.8 percent slide yesterday. Standard Chartered slid 8.6 percent in Hong Kong and 0.9 percent in London after yesterday’s 5.8 percent decline.

Japanese banks are also hit by the financial turmoil in Dubai. Sumitomo Mitsui Financial Group Inc., Japan’s second- largest bank by market value, may be owed at least $225 million by Dubai World, according to people familiar with the matter. People in the industry are expecting that smaller rival Mizuho Financial Group Inc. may be owed about $100 million.

Bora Bora wrote:Went to a social gathering last night and had a brief chat with one of the guests. Told me that if I had any money in HSBC - to get it out soon. Didn't go into details, but said that HSBC is facing some serious problems.

Just thought I would pass this on, especially since a forum member was being asked to pay the bank to withdraw his money.

lot of banks in the region will have exposures to the DW mess.. however just because of tht suggesting to take out the cash of the bank is just going bit overboard..
Many banks had huge exosures to recent SAAD defaults in Saudi..but none of them have gone under.. just by having $2 billion bad exposure doesn't mean tht one should withdraw all the money frm the account..There is a proper procedure to write down bad loans..

One should be worried when there is a liquidity crunch in the bank (n this may happen with some banks if ppl start withdrawing ) despite not having any exposures to the DW..

You quote from my first post. Did you take the time to read the second post which included an article?

Dubai has considerably more than $2 billion bad exposure - if you are referring to debt. The number is $59 billion. $2 billion is a drop in the bucket compared to that.

RBS: $2.3 billion HSBC: $17 billion (See above article)

Bora Bora wrote:Well the discussion was brief and I wasn't given any insight as to what the problem or problems are. I was just given a heads up. I don't know if HSBC deposits are "protected" in Dubai as they may be elsewhere. In the US banks provide FDIC coverage for each account up to a certain amount. I don't know if that protection exists in Dubai. I'm sure deposit protection exists in the UK. Remember: this is Dubai. It doesn't mean company practice in one part of the country is necessarily practiced somewhere else.

I don't know if he was referring to HSBC universally or locally. More than likely the problems are with the locally based banks and if they have run into serious Dubai debt problems, they may just close the branches here.

Edited to add:

I just came across this:

http://www.benzinga.com/economics/46444 ... or-lenders

According to a JPMorgan (NYSE: JPM) report released today, the Royal Bank of Scotland (NYSE: RBS), the largest UK government controlled bank, arranged $2.3 Billion or 17% of the total Dubai World loans. The report also said that HSBC (NYSE: HCS) has the largest absolute exposure in U.A.E., with $17 billion of loans in 2008.

According to a report released in Bloomberg Press, Abu Dhabi Commercial Bank PJSC may be owed $1.9 billion by Dubai World, making it the largest creditor outside the emirate. The Bloomberg report, citing a report from RBS, also said British banks have the most to lose among international lenders from a crisis in the United Arab Emirates, with a combined $49.5 billion of loans outstanding. Standard Chartered bank has also got some exposure due through Istithmar PJSC. Barclays Bank & Credit Suisse have said they do not have major exposure in the Dubai World.

HSBC dropped 7.1 percent in Hong Kong, the most since March 9, and was 1.2 percent lower in London, extending a 4.8 percent slide yesterday. Standard Chartered slid 8.6 percent in Hong Kong and 0.9 percent in London after yesterday’s 5.8 percent decline.

Japanese banks are also hit by the financial turmoil in Dubai. Sumitomo Mitsui Financial Group Inc., Japan’s second- largest bank by market value, may be owed at least $225 million by Dubai World, according to people familiar with the matter. People in the industry are expecting that smaller rival Mizuho Financial Group Inc. may be owed about $100 million.

$17 Billion is a pretty hefty exposure!

If I were an HSBC holder, I would naturally be concerned.

However, that’s still an exposure, not a loss. It would only become a loss (a write off) if Dubai were to go into default, which is not likely to happen - given their big assets and having AD on their side.

As to your question about local deposits, The UAE government said last year (can’t remember exactly when, and too lazy to find it) that all deposits in the UAE banks, local and foreign, are guaranteed in full for 3 years. I believe the announcement was made at the onset of the financial crisis!

I remember also the statement guaranteeing local deposits for both domestic & foreign banks.

there was a statement guaranteeingt he deposits early this year after the Lehman collapse..however note tht there are no definite guidelines regarding tht..so it can very well be a one time confidence building measure.. don't assume tht it is valid in all situations..