Think of some of the great corporate rivalries of the business world: Samsung versus Apple in telecommunications; BP vs Royal Dutch Shell in the oil business; or, on a broader historical scale, Ford vs General Motors in the American motor industry.
All are (or were) titanic clashes between machismo-laden companies fighting for the same market with basically the same product in the same parts of the world. All share the same essential characteristic: a visceral hatred of the opposition, and a determination to do them down.
All would agree with the American novelist Gore Vidal: “It is not enough that I should succeed; others must fail.”
In the specialist context of foreign banking in the UAE, one contest stands out from the rest, and makes some of the examples above look like kindergarten squabbles. I refer, of course, to the deep abiding enmity between HSBC and Standard Chartered.
In public, neither bank would admit to any particular animosity towards the other. They stick to the line that they are competitors offering subtly different products in a diverse market, and that their relationship is one of sharp, but healthy rivalry.
In private, it’s a different matter. HSBC executives sneer at the latest initiative in financial services from their competitor: “sub-Standard Chartered”, they laugh.
On the other side, the joy was palpable at StanChart when HSBC got walloped to the tune of hundreds of millions of dollars by US authorities for money laundering and sanctions busting.
It was short lived, however, because StanChart was subsequently on the receiving end of a similar kind of punishment in the United States.
In the UAE, what makes it all the more perplexing to outsiders is that, on the face of it, the two banks look pretty much like Tweedledum and Tweedledee: roots in London and Asia, offering retail, corporate and investment banking services with an emphasis on the expatriate market.
There are some differences, it must be acknowledged. One is simply that HSBC is bigger, both globally and in the Middle East.
Group profits of US$20 billion (Dh73.46bn) compare with StanChart’s near $7bn globally; regional profits (although the two banks’ definitions of “regional” do not exactly overlap) show HSBC at $1.4bn against StanChart’s $786 million.
The line from HSBC is that it is a global financial institution, while StanChart is basically an Asian bank that has expanded a bit outside its original market. StanChart says that it “leads the way in Asia, Africa and the Middle East”.
Other comparators also come down to magnitude. HSBC was recently hit with a $1.9bn fine by US regulators for various breaches of law or banking probity; StanChart paid up $667m for similar offences, much of it related to Iranian sanctions.
In Dubai, there is little to distinguish them on the ground. Since the withdrawal of Royal Bank of Scotland and Lloyds from retail banking in the UAE, they are the market leaders in a less competitive market.
HSBC Middle East prides itself as the oldest bank in the region, largely thanks to its takeover of the old British Bank of the Middle East many years ago. Its headquarters beside the Creek in Bur Dubai gives this legacy some credibility.
StanChart, on the other hand, has been in the UAE since 1958, but more recently cemented its commitment to Dubai via its ownership of one of the main buildings in the Dubai International Financial Centre.
There has been a noticeable difference of strategy towards Islamic banking in the UAE. HSBC has closed down its Amanah Islamic retail banking business in the UAE, although it still offers wholesale Sharia-compliant services. StanChart remains wholeheartedly in the Islamic banking business via its Saadiq operation, as well as in corporate services.
But these are nuances rather than differences of substance. To all intents and purposes, the two are pretty much identical as far as the UAE market is concerned.
Which makes all the private posturing about deep-seated animosity a little ridiculous. They should reach a gentlemen’s agreement not to speak ill of each other again, and get on with the business. Knock it off, chaps.