Canadian companies looking to expand beyond borders for significant opportunities,’ HSBC exec says

Against a backdrop of slowing economic growth at home, Canadian companies are actively looking to expand in markets such as the United States, China and Mexico, says Simon Cooper, chief executive of global commercial banking at HSBC Bank Plc.

“In Canada, from the companies I’m talking to about how they’re looking directionally for growth…. NAFTA [and] the growth in China both represent significant opportunities,” said Cooper, who is based in London but travels extensively. He was in Toronto on Tuesday during his fourth trip to Canada this year.

Economic growth in both Canada and China has clearly slowed, but the projected 7.1 per cent growth rate in China is still a “very big” number, Cooper said in an interview with the Financial Post. And capital for corporate expansion is flowing to areas where there is growth.

“We remain very bullish on the long-term growth of China,” said Cooper, who has worked for the bank in both Asia and the Middle East.

He said Canadian corporate clients such as Quebec-based water treatment company H2O Innovation Inc. and Global Relay Communications Inc., a Vancouver-based company that provides secure messaging and archiving of electronic communications including email and text messages, have already begun to expand in the NAFTA “corridor” and beyond.

In Canada, HSBC expects interest rates to be cut in the coming months to boost confidence and stimulate economic growth in the region. The bank’s economists are predicting the overnight rate will drop to 0.5% in the third quarter and 0.25% by the end of the year.

Cooper said foreign companies remain interested in investing in Canada for long-term growth, despite the ongoing effects of oil price volatility and other factors weighing on the domestic economy.

“We are seeing businesses look to invest in Canada,” he said. “I think people view Canada strategically… the long-term strategic potential of markets rather than looking at short-term volatility.”

From a global perspective, Canada is seen as having strength in technology and an attractive workforce, he said.

“Canadian businesses are to me, they’re well managed, they’ve got strong staff, and they’ve proved that they can succeed offshore.”

Cooper declined to venture an opinion on the impact of the Greek debt crisis on the wider global economy. He said the situation is fluid and “very complicated,” and the potential ramifications of an exit by Greece from the Eurozone are difficult to predict.

“Greece is clearly a function of multiple factors, economic, political, social, all coming together,” he said.

“Any sort of restructuring… that can be part of a process where borrower and lender can agree on a way forward, a managed process, that is the optimum outcome — but we will wait and watch.”