HSBC Holdings PLC ADR HBC
Q2 2010 Earnings Call Transcript

S K Green - Group Chairman: Mike, thank you and I'll act as traffic cop here. Any questions?

Alistair Scarff - Bank of America Merrill Lynch: It's Alistair Scarff, BofA-Merrill Lynch. A question in relation to your attitude to loan growth, it's very pleasing to see that you've been all set to drive from the U.S. business. I was wondering if you could comment on the impact of pricing as a strategy to try and take advantage of the low interest environment, by gearing up balance sheet by lending and moving aggressively into new markets that you've seen across other banks and other markets. So, a comment on pricing and which segments are seeing the most pricing pressure?

M F Geoghegan, CBE - Group Chief Executive: I will start and maybe, Peter Wong who is with you there can talk for Asia. Clearly, we are seeing pricing straining in certain markets, particularly in Asia, but there again, we have generally, certainly in Commercial Banking, both sides of the transaction in our international focus and that does give us benefits. We do look to market share in the U.K. here where we have grown our mortgage new business by about 8% of your all new mortgages. We do see a reasonable return on that. We do use the risk-based policy in regard to pricing and that helps us as well. But Peter, if you could give us some flavor in Hong Kong, where you see, things in Hong Kong, and I'm going ask Sandy also to add, if he may, some things what he is seeing on the Commercial Banking side.

Peter Wong - Chief Executive of The Hongkong and Shanghai Banking Corporation Limited: As far as Hong Kong is concerned, we see loan growth across all customer groups. PFS has grown by 6%, CMB 42%, and Global Banking and Markets by 10%. Now I think going forward, what we will be focusing on is – the lending relationship is only the beginning of the relationship. What we're going to do is that, we're going to try to cross-sell more into a relationship, so that it will improve our revenue and also improve our net interest margin. So, therefore, as far as the pricing is concerned, we do understand that there's lots of competition, especially with the Chinese banks coming into the market and so forth, but I think that as far as we are concerned, the important thing for us is to make sure we have more products with the customers. We're going to work on our customer base a lot harder.

A A Flockhart - Chairman, Personal and Commercial Banking and Insurance: Just talking about Commercial Banking, I think the point to bear in mind is we have had growth in Asia. We have had strong growth in Brazil and Latin America, and in fact, with the loan impairments, you had a bounce back in other markets, although asset growth has been lower. What you got to remember about that increase in customers and our customer base, it is increasingly linked up. That's internationally focused, connecting parts of the group. Even though you may have a pressure on margins, these internationally connected customers, which are significantly a growing part of our business, are twice as profitable as a domestic customer. So, you can see that that focus and that growth despite the push-on on the net interest margin is overall more profitable as trade grows and as we connect more of them up to our network.