Michael Geoghegan (center), chief executive officer of HSBC Holdings, meets the media at a luncheon organized by the American Chamber of Commerce Tuesday. He revealed at the luncheon the group is preparing to pursue its listing on the Shanghai stock exchange.

Goeghegan says overall lending and asset valuation are 'reasonable' In a Tuesday luncheon organized by the American Chamber of Commerce, HSBC CEO, Michael Geoghagen, addressing recent concerns about a housing bubble in Hong Kong, reassured the audience that overall lending and asset valuation levels are reasonable. "It is normal for some particular asset class to experience price hikes in any economy," he noted, adding

that "we see some luxury flats' prices are soaring, but the overall bank lending and asset valuation in Hong Kong is still reasonable."

Nonetheless, refl ecting the recent momentum towards proactive management of the housing sector's growth with an emphasis on the mainland, Geoghegan reiterated

that the HSBC Group will provide mortgage loans for fi rst and second home purchases, but added that the Group will put stringent controls on mortgage loans for third home

purchases. As for US operations, he declared that the provision level for HSBC Finance Corporation in the United States is satisfactory. In his wide-ranging talk in the luncheon, he detailed the latest development of the Group's businesses in diff erent regions. On the mainland, HSBC's Board of Directors approve dplans to participate in the rights issue program of the Bank of Communications. Regarding the

mainland financial authority's request for increased capital injections, HSBC stated that it has already injected capital into its Shanghai subsidiaries. He added that the Group is preparing to pursue its listing on the Shanghai stock exchange; the exact timetable, however, will depend on the approval of the mainland regulatory authority. Responding to the market rumor that the HSBC Group will bid to acquire stakes of the Korea Exchange Bank, Geoghegan said that the Group is abandoning the bid. Concerning the Royal Bank of Scotland's Asian assets, he said that the Group has business teams assigned to study any

business acquisition potential in the region. Turning to the Middle East, Geoghegan stressed that with the easing of the Dubai debt crises, the Middle East region will be one of the HSBC Group's vital

growth engines. As for business on the opposite side of the globe, he described the performance of HSBC's Latin American business as "fantastic".

Addressing the ongoing and growing Goldman Sachs banking scandal in the US, Geoghegan said that the Group is not saddled with the issues that Goldman Sachs in the US is currently facing: The American Securities and Exchange Commission previously filed for civil prosecution against Goldman Sachs, claiming that the investment

bank is making fraudulent claims to clients when it is selling financial products relating to collateralized debt obligations (CDOs). Geoghegan emphasized that in light of the financial tsunami in

2008, more strict control will be expected from global financial regulatory authorities.

"HSBC as a global player in the financial market, is bound to comply with different financial regulations in different jurisdictions. We hope global financial regulatory authorities will coordinate their regulations and have through discussions about them. In the process, Asia can stand out to demonstrate that it has one of the best financial regulation frameworks in the world." Geoghegan said. He stressed that, because HSBC is still maintaining dividend payments and did not ask for any governmental capital injection during the financial tsunami in 2008, it has served as a good example in the global finance industry.

CHINA DAILY

(HK Edition 04/28/2010 page2)