How strong is demand for infrastructure financing in Qatar? Has demand been dampened by oil price concerns?

Current demand is high. Although falling oil prices are having an impact on the budgets of some countries, the Qatari government is continuing with its major projects that have been identified as priority projects. So the Doha Metro remains on track.

You’ll find that the road projects are not delayed or scaled down.

Non-priority projects might be implemented in phases or delayed, but none of the key projects should be affected.

Over the past year, we supported the construction of the Al-Rayyan Road project, providing contractor financing. We have also been supporting contractors working on the expansion of Ras Laffan port, as well as working on power plants and the financing of the stadium constructed for the world handball tournament in Doha.

We also exclusively financed the developer behind the new Kempinski – The Pearl hotel in Doha.

What projects are you hoping to support this year?

Contractors are bidding on new road packages. We expect some of our clients to win some projects, hopefully in the second quarter. There are some packages yet to be awarded on the metro. We already have some exposure on contractors working on the metro and I expect we will become more involved.

I expect the bank to remain successful. We have adequate liquidity to accommodate our growth plans. Pressure on banks’ net interest margins will continue in 2015 as they compete for business.

Do you plan to raise additional funding to support your growth?

We continue to diversify our funding sources. Not only just to fund growth, but also to ensure we have access to different pools of liquidity.

As soon as there is a need to support and further borrow from international markets we will consider that.

We issued our debut bond of $500m in the fourth quarter of 2013. We have an established Euro Medium Term Note programme and we are considering enhancing this programme and increasing the amount.

What are the opportunities in Qatar in terms of supporting the infrastructure drive?

There is a significant amount of spending on infrastructure already under way in Qatar. In Doha there is tunnel-boring equipment working on the new metro. The mega-reservoirs project is under way. There are many projects progressing, and a lot in the pipeline as well.

Since the new airport opened last year, things seem to have really picked up. We are also seeing some interesting new joint ventures being formed with European or Chinese companies looking to tie up with local companies.

Have these opportunities been dampened by concerns about oil prices?

The oil price has been up and down for the past 15 years and gas prices haven’t declined as much in comparison. Of course, the oil price is important, but in Qatar it is about the long-term story. The projects being developed are for the 2022 World Cup and the government’s 2030 vision, so it is unlikely many projects will be cancelled. There isn’t anything being developed that is not an essential project. Nothing is a trophy.

One thing Qatar will need to be careful of is the availability of raw materials to prevent any bottlenecks in supply. They will need to ensure the resources for projects are in place, including manpower.

Have you seen an increase in business volumes over the past year?

We have definitely seen an increase in the provision of bonds and guarantees for companies working on infrastructure projects in the first three quarters of last year.

Our major project last year was working with AlJaber Engineering on Kahramaa’s [Qatar General Electricity & Water Corporation] mega-reservoirs project. HSBC signed QR1bn-worth of contract finance facilities for the company in mid-2014. Aljaber is working on the pipelines that will connect the reservoirs.

What opportunities are there for HSBC in 2015?

We are looking at supporting large Qatari family [businesses] with a strong trading arm and working with them to support them on their construction contracts.

We are looking to support companies working on the mega-reservoirs project at the main contractor level, among many other projects.

There are well over $100bn-worth of bank-able projects being implemented over the next five to seven years.

How competitive is the market? Is there a possibility that companies could borrow too much?

Competition is fierce. The local bank market is very liquid. When dealing with joint ventures, the foreign companies involved may have access to funding in their home country.

But that is where our international network can help and we can help [to connect] international players with local players.

Although it is a competitive market, you can command a premium if you are offering a quality service. 

People do need to be mindful of being a responsible lender and responsible borrower and structuring the deals in a way that does not expose you, or the business, to financial risk. But people have generally learnt lessons from the financial crisis of 2008-09 and are more cautious in their lending or borrowing.

I don’t think there are any major obstacles in terms of the provision of financing.

In terms of obstacles to the success of projects, the availability of raw materials, the inflation of material costs and the appropriate scheduling of projects is something that needs to be considered.