World’s Largest Expat Survey Reveals Crunch Hits Expats Hard

LONDON -

- US, Thailand and South Africa most affected expat locations - Almost half of expats in UK considering returning home - Emerging markets rank above established centres for expat finances - UK worst for saving behind Spain and France - Despite economic crisis, expats are wealthier and save more than in country of origin

HSBC Bank International today revealed that the current economic crisis has had a significant impact on expats’ financial situation, according to the world’s largest survey of expats, Expat Explorer.

The first of three instalments of this year’s survey, Expat Economics, showed that expats have reduced spending across the board, with the UK and the US identified as having some of the highest numbers of expats considering a move home.

Expat Explorer, now in its second year, surveyed over 3,100 expats from more than 50 countries and is the largest survey of its kind, with 46% more respondents than last year. Expat Economics is the first of three reports on the results and is a new addition to this year’s survey which looks at an expats’ economic quality of life. This is determined by four main economic factors:

- Annual income in excess of US$200,000 - A monthly disposable income in excess of US$3,000 - An increase in saving while living/working abroad (in their current country of residence) - Having at least two luxury items in the country they live in

Paul Say, Head of Marketing and Communications for HSBC Bank International, said that this year’s survey revealed interesting insights into a dynamic segment of the world’s population, and also stands as a key indicator into how expats had been affected by global economic events.

“Last year’s survey gave us some really valuable insights into such a fascinating group of people and we are pleased to see even more expats participating in this year’s survey” said Mr Say.

“As the world continues to undergo a significant economic shift, we are seeing some interesting patterns amongst the expat population, particularly in the changes to their spending habits. Despite expats in the UK and US considering a move home we also found that the majority of expats are staying put despite growing employment uncertainty across many regions.”

The crunch and its effect on expats

Overall, the US, Thailand and South Africa have been most affected by the credit crunch, reducing their spending on essential and luxury items, general household maintenance and the money allocated to savings and investments. The largest reduction in essential day-to-day items was seen in Spain, where almost two-thirds (81%) of expats have cut back. Almost four-fifths of expats in the US (79%) and three quarters in the UK (75%) have also scaled down their spending on essential day-to-day items.

Not surprisingly, almost half (44% - the highest recorded figure in the survey) of expats in the UK and close to a quarter (23%) of expats in the US are considering returning home in light of the current financial crisis. This provides a stark contrast when compared to the average of only 15% of expats overall who are considering the same move.

Emerging markets best for expats’ finances

26 countries now feature in the ranking table (compared with 12 last year), with Russia (1st place) scoring highly as a result of the number of expats saving more, high annual salaries and the amount of disposable income available. Qatar (2nd place) and Saudi Arabia (3rd place) also scored highly in the areas of increased savings and disposable income, however had their scores affected by lower annual salaries. Interestingly, two-thirds of expats in Qatar (63%) said that their attitude to spending had not changed as a result of the economic crisis.

Geographically, Switzerland and the UK ranked 1st and 2nd respectively for Europe, with Qatar and Saudi Arabia leading the charge in the Middle East, Russia and Hong Kong top for the Asia-Pacific region and Mexico and the United States highest in the Americas.

An increase in saving

Many expatriates have taken advantage of their current location to increase the amount of money allocated to savings. Expats in the Middle East are strong savers, with the UAE ranking fifth (after Saudi Arabia, Russia, Qatar and India) as a country where expats are increasing their savings. The UAE and India were also top countries to save in the 2008 Expat Explorer report.

Expats in the UK were the worst savers/investors globally, with over a quarter of expats living in the UK (27% - the highest recorded in the survey) saying that they had reduced their savings and investments when compared to their home country.

Savings accounts are the most popular way to save for expats across virtually all markets, with the exceptions of Mexico, Malaysia, Japan and South Africa.

Where are the wealthiest expats?

Asia is home to the highest paid expats in the world, with one in four expats (25%) earning more than US$200,000 per year. Individually, the survey identified Russia, Japan and Qatar as home to the wealthiest expats, defined as an annual income in excess of US$200,000 and a monthly disposable income in excess of US$3,000. Over one-third (43%) of expats surveyed in Russia, 40% in Japan and 22% in Qatar answered that their annual income was over this US$200,000 mark.

Belgium and Australia are home to the least wealthy expats, with almost two-thirds (61%) of expats in Belgium and 63% of expats in Australia stating that their annual salary was US$100,000 or less. This compares to an average figure of 35% across all expats surveyed.

More disposable income and an increase in costs

Almost three-quarters (74%) of expats surveyed said that they have more disposable income than they did living in their country of origin, except those living in France (47%) and the UK (47%). Almost all expats in Qatar (94%), Russia (97%) and Saudi Arabia (98%) have more disposable income than they did living in their home country. More expats in these countries also have more than US$4,000 (70%, 59%, 52% respectively) of disposable income each month compared to the survey average of 36%.

Food and accommodation has seen the largest increase in spending for expats, a continuing theme from the 2008 Expat Explorer report. Expats in the UK spend more of their income on accommodation than in anywhere else in the world, with almost two-thirds (86%) ranking it as their greatest expenditure, a continuing trend from the 2008 report.

“As with our 2008 survey, we are generally seeing that although expats are spending more in their new countries of residence, they are also saving more,” said Mr. Say.

“There is no doubt that we have seen some interesting trends in terms of how expats are reacting to the credit crunch, but what is also interesting to see is that they remain to be a wealthy group of individuals. Over half of the expats surveyed are actually earning US$100,000 and over - no mean feat particularly in the current climate.”

The next instalment in the Expat Explorer series, Expat Existence, will be released in August this year and will focus around expats’ quality of life.

Get involved

Are you an expat? Follow the updates and join the debate online:

Tweet at: twitter.com/expatexplorer

Share your experiences: expatexplorer.blogspot.com/

Read the report in full: www.offshore.hsbc.com/expatexplorer

Notes to Editors:

HSBC Bank International

HSBC Bank International is an award winning provider of offshore financial services, with its head office based in Jersey, Channel Islands. It also has representation in the Isle of Man, Dubai, Hong Kong, South Africa, Singapore and an affiliate office in London. Being a part of HSBC Holdings plc, HSBC Bank International has the experience to offer customers living and or working abroad, tailored offshore financial solutions.

For more information visit: www.offshore.hsbc.com

About Expat Explorer

The Expat Explorer survey, now in its second year, is the largest global survey of expats. Commissioned by HSBC Bank International and conducted by third party research company FreshMinds, more than 3,100 expats were questioned between February and April 2009. Individuals from four continents described the opportunities and challenges they experience living away from home. The survey provides an insight into how expat life differs from country to country, continent to continent and from an expats’ country of origin.

A sample size of 30 or more respondents from each country was required for inclusion in the league tables, in order to be considered robust and indicative of the views and trends of the specific population it relates to. The league tables are based on a series of interrelated factors (rather than a single factor or question) to ensure a fair assessment of how individual countries rate across the full criteria. The responses of those who responded “not applicable” have been excluded. Each criterion is equally weighted to arrive at a score. The overall ranking is based on the average score for a country across the criteria.

About Expat Economics

Expat Economics is the first report to be produced from the Expat Explorer research. It explores the financial implications of life as an expat, examining individual financial circumstances and comparing the experiences of people living in different countries. The report also explores how expat life has been affected by the global economic downturn and how spending and saving habits have changed as a result of the economic crisis.

The ranking table is determined by four main economic factors: annual income in excess of US$200,000, a monthly disposable income in excess of US$3,000, an increase in saving while living/working abroad (in their current country of residence) and having at least two luxury items in the country they live in. Each criterion is equally weighted to arrive at a score. The overall ranking is based on the average score for a country across the criteria.

Wealth is defined as an annual income in excess of US$200,000 and a monthly disposable income in excess of US$3,000. The overall wealth level of each country has been determined by taking an average of the income and the disposable income scores outlined in the economics league table.

Respondents answered income-related questions in one of five currencies that they use most often: Australian Dollars, Euro, British Pound, Japanese Yen or US Dollars. However, for ease of analysis and comparison, all foreign currencies were converted into US dollars. As per the following table, currency conversions were calculated based on conversion rates available on 1st April 2009. These conversion rates were then rounded to one decimal place to provide more rounded income brackets.

Currency Conversion rate as of 01 April 2009 USD 1 USD = 1.00 USD AUD 1 USD = 1.45 AUD EUR 1 USD = 0.75 EUR GBP 1 USD = 0.69 GBP JPY 1 USD = 98.63 JPY

Media enquiries to: Betony Taylor HSBC Bank International +44-(0)1534-606004 Betony.taylor@hsbc.com Tim Mullen Hill & Knowlton +44-(0)207-413-3465 tim.mullen@hillandknowlton.com

Source: HSBC Bank International

Media enquiries to: Betony Taylor, HSBC Bank International, +44-(0)1534-606004, Betony.taylor at hsbc.com. Tim Mullen, Hill & Knowlton, +44-(0)207-413-3465, tim.mullen at hillandknowlton.com