HSBC Says 20% Asia Return on Equity `Achievable' on Growth

[skeptic]

HSBC Holdings Plc said its Asian operations can sustain return on equity of as much as five percentage points above the lender’s global target as growth outpaces other regions.

Return on equity of about 18 percent to 20 percent “is achievable” for HSBC in Asia in coming years, Peter Wong, the bank’s chief executive officer for the Asia-Pacific region, said today in an interview. London-based HSBC posted a 21.1 percent return for the region in 2010, more than double the ratio for the bank as a whole.

HSBC CEO Stuart Gulliver yesterday cut the bank’s target for return on equity to as high as 15 percent, as regulators push lenders to hold more capital in reserve after the financial crisis. Asian economies have recovered faster from the global recession than the U.S. and Europe, led by China and India.

“I’ll probably say that we will still be comfortably ahead of the range set by the bank at least for a few years,” said Wong, 59. “The most important thing is using our brand in Asia to get more out of each customer.”

HSBC said yesterday it will target a return on equity of 12 percent to 15 percent instead of 15 percent to 19 percent. The stock fell as much as 4.9 percent as of 10 a.m. in Hong Kong, the biggest drop in a year.

HSBC Says 20% Asia Return on Equity `Achievable' on Growth - Bloomberg

we are toast.