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It seems the self-styled World's Local Bank really is the world's local bank, at least in this neck of the woods. On a gloomy Monday in London, where shares plunged amid a record rights issue, the Arabian sun shone brightly for HSBC.
With earnings of $1.7 billion (£1.2 billion) last year, it's drawn level with Saudi Arabia's Al Rajhi as the most profitable lender in the Middle East.
Partly, that's through the dull business of current accounts, credit cards and trade finance. HSBC has a big high street presence in several Arab countries, including the UAE (as a standalone brand) and Saudi (through a joint venture). Its Islamic finance unit in particular draws Muslim customers.
But it's investment banking where HSBC really punches above its international weight. In London and New York, the bank never gained a seat at the top table of bulge-bracket firms; in Dubai, it reigns supreme. Take the latest figures from Dealogic, tracking Middle East fees over the past year. HSBC tops the charts, with $55 million. JPMorgan Chase, Citigroup, Morgan Stanley and Nomura are the chasing pack, all in the $30 millions.
To an extent, HSBC earned this regional success through sheer staying power. It began life as the Imperial Bank of Persia in 1889, and rode the coat-tails of UK colonialism through much of the 20th century. (Ask a Dubai taxi driver for the HSBC head office and he'll look at you blankly; tell him "British Bank" and you're as good as there.) It helped finance Dubai's first proper port back in the 1960s and '70s. Today, this loyalty translates into lead arranger roles for many government and almost-government mega-deals.
Going forward, though, that could prove an Achilles heel. The same Dealogic figures show the regional fee pot shrinking dramatically since October. So, 2008 may be a tough act to follow.
* The credit crunch has claimed another Formula One victim: Dubai-based Union Properties has mothballed plans for an F1 theme park in the city. Building has already started on the attraction, the centrepiece of a sprawling office and apartment project called Motor City. But with real estate and credit markets frozen, the F1 theme park is on ice.
* The lacklustre Nasdaq Dubai financial market hopes to add some sparkle with a new gold security that abides by the rules of Islamic finance. Each security, valued at one tenth of a troy ounce, is backed by physical gold stored in London vaults.
