Sir John Bond

'Everybody I meet keeps talking about Abu Dhabi, Dubai and Doha, and so I just thought I would come and see for myself,' says the remarkably down-to-earth Sir John Bond, Group Chairman of HSBC.

'I have not visited the region for three years, and there is a tremendous change. You can really see things happening now. I am here to meet the leaders, customers and colleagues.

'Taking a 25-year horizon we see a big shift in the world economy. At present Asia and the Middle East provide the savings for investment in the US and Europe. But that is changing, and the savings of the Middle East are going to stay in the Middle East.

'That means a huge growth in capital markets here and in Asia. Why should money all pass through New York and London? It makes sense to develop capital markets here, and I mean international markets like in the Dubai International Financial Centre, and not just local ones.'

Sir John began his career in HSBC as a 19 year old trainee and is now 63. In that time HSBC has grown from being a local Hong Kong bank into the second largest bank in the world. And in the past 12 years under Sir John the group has spent $50 billion on more than 50 acquisitions. So will HSBC be buying any banks in the Middle East?

'We can grow internally, and that is the safest route,' says Sir John. 'But if the right opportunity came along we would look at it. There is nothing on the agenda at the moment, except for our venture in Iraq.

'But we are well represented in the Middle East and don't really feel a foreign bank at all. We have been here since 1946 and recently bought in Egypt. We also have an investment banking venture in Saudi Arabia, and are waiting for a license in Kuwait and have good prospects in Libya.'

The HSBC group chairman is clearly impressed by what he has seen in the Middle East, literally from the window of his helicopter in the case of the UAE. He also notes that the current boom is being mainly funded by equity and not debt.

'All we want as a bank is to work with a successful economy, and there is no doubt that equity is a stronger foundation than debt. That said, I think the equity and debt markets will grow dramatically over the next few years in the Middle East.

'The abundant liquidity is a sign that more supply is required on the equity side, and also there will be huge demand for Islamic banking which is already one of the fastest growing businesses inside HSBC.

'In investment banking you get two types here; those who bring capital and plan to be around for a long time; and those who come and work from their briefcases. We are in this for the long-term and are committed to an exciting future and working with the needs of the country.

'For example, we see privatization in this part of the world as a part of the process of democratizing wealth. It is not like in Europe where privatization is about shedding labour. The same is also true for real estate ownership. This is part of the process of democratization of wealth and our mortgage products will assist this development.'

HSBC is also very committed to helping small business in the region and will be introducing a new awards scheme for the sector.

Sir John recalls his graduation class in the USA, and how 28 out of 30 of his fellow students eventually started their own businesses. 'That says something about the dynamism of the US economy, and we believe in promoting small business which is the life-blood of an economy.'

From the macroeconomic perspective Sir John said there was 'no doubt that interest rates are on the rise in the US' but thought the situation was 'more debatable in the UK' and that interest rates would be 'stable or tending to go down' in Europe. He also saw the US dollar weakening further, and US citizens tending to save more as interest rates went up.