HSBC structuring $100 mln syndicated loan for BOC

HSBC Sri Lanka is close to completing arrangements in structuring an international syndicated loan for over US $100 million for the Bank of Ceylon (BOC), its main international officer said last week.

Michael Smith, President and CEO Hongkong and Shanghai Banking Corporation Ltd, on a visit to Colombo, revealed this when he addressed a corporate gathering in the capital.

Smith said the bank was confident that Sri Lanka had a bright future and thus ‘our desire to continue to grow our business here remains undiminished.”

The bottom line in expressing confidence in the future is that predictions are just predictions, words are just words, he said noting that HSBC’s latest syndicated loan operation reflected, “actions which from my perspective speak louder than words in terms of our commitment to and our confidence in, your country,” Smith told a representative audience that given all the known and unknown variables out there, economic forecasting today is decidedly more of an art than a science and has little bearing on actual business.

“While GDP forecasts are worth knowing, it is important to look beyond the numbers and to look beyond the conventional wisdom or the ‘consensus’ wisdom,” he added.

“After all, if business people like you and me were guided solely by the latest economic estimates, we would all be prone to serial short-termism.”

He said that most business people are deep down less concerned about whether a particular economy’s GDP is going to be higher or lower by half percent during the next 12 months, but they want to know more about the underlying business environment. “Is a particular economy growth-oriented? Are there opportunities to make money? Does the economy have potential over the longer term? Is there recourse to a proper functioning legal system? Is the political system inherently sound? Are the popular questions and many economies in Asia - including Sri Lanka - the answer is a resounding ‘yes’ on all counts,” he said.

Smith said that HSBC does not let short-term events or forecasts influence its long-term thinking. “As for Sri Lanka in particular, during the 114 year period we have seen your country overcome other periods of difficulty. We are confident that you can and will again.”