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"HSBC eyes RBS and Lloyds assets"

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Banking giant HSBC (HSBA) today voiced its interest in acquiring parts of rivals Royal Bank of Scotland and Lloyds as it revealed expectation-beating results in the third quarter.

Chief executive Michael Geoghegan admitted that the bank would consider snapping up 'certain portfolios' if it was eligible to do so although he declined to specify which he ones.

He told reporters on a conference call: "HSBC is not a large bank in the UK and I would hope we have the right to bid for portfolios if they become available, because we have demonstrated that we do run a bank in a conservative and proper manner."

Last week, RBS and Lloyds revealed they will have to make divestments of "significant parts of their businesses over the next four years" to meet the demands of the European Commission.

RBS will sell off 318 branches in the UK - equating to 14% of its branch network. This will include its RBS branch network in England and Wales - originally Williams & Glyn's -and its NatWest brand in Scotland.

It will also offload its card payment business RBS Insurance and Global Merchant Services and its stake in commodities trader RBS Sempra Commodities.

Meanwhile Lloyds will have to sell at least 600 branches, which includes the TSB branch in England, Wales and Scotland and mortgage broker Cheltenham & Gloucester, as well as the Intelligent Finance online business.

Bad debts down

HSBC signalled it was moving further along the road to recoverywith asignificant year-on-year improvement in its third-quarter performance helping the bank to surpass its original expectations for the first nine months of the year.

The global bank behemoth, which recently opted to move its headquarters to Hong Kong, said it had built on the "exceptional first-half results" and had seen its Global Banking and Markets operations maintain its record performance for the year-to-date.

Elsewhere, HSBC said loan impairment allowances had declined - particularly in the US - in the three months to end-September, while performance in its Emerging Markets business had been broadly maintained, with only its Middle East business suffering.

Geogheganattributed the strong showing to "a highly diversified business model, a clear and unchanged strategy and a focus on banking fundamentals".

"We have continued to focus on cost control," he added. "Total costs and staff costs for the year to date were both lower than in the comparable period in 2008."

Net fees for the third quarter were up on the the first two quarters of the year, but were lower year-on-year due to higher volumes in its US cards business, it said. Also in the third quarter last year, HSBC received $2.4 billion from the sale of its French regional banks, it added, with underlying basis comparatives excluding this one-off gain.

As well as its Global Banking and Markets arm maintaining its performance for the year-to-date, HSBC benefited from a better-than-expected showing from its US consumer finance portfolios and saw Asian operations continue to perform strongly.

David Buik of BGC Partners says: "It is rare to hear Stephen Green and Michael Geoghegan so effusive about the outlook for not only HSBC, but also in a marginally qualified way, for the world's economy.

"Clearly, they believe that the recovery will be triggered from China, Asia and emerging markets - hence the CEO working from Hong Kong.

"Whilst the outlook remained challenging, the overall trends are positive."