HSBC Holdings remains open to the possibility of making new acquisitions in emerging markets, company executives said yesterday.

"When opportunities arrive, we will actively consider them," said Chief Executive Michael Geoghegan. HSBC's Asia-Pacific chief executive, Sandy Flockhart, said: "A lot of options are on the table for us."

The acquisitions discussion came a day after the lender announced a 21 percent jump in its net profits last year. Earnings in the Asia-Pacific region were the main profit driver.

The bank has reached a tentative agreement to acquire a controlling stake in Korea Exchange Bank. Flockhart said the deal is subject to regulatory approval. "We hope to move forward in the transaction, but for now, we are waiting," she said, adding that the approval could come next month.

HSBC has stepped up its Vietnam expansion plans and has an approval-in-principle to incorporate there, according to a bank statement issued yesterday.

Other Asia-Pacific markets, such as Indonesia, the Chinese mainland, Hong Kong special administrative region and Taiwan province provided significant contributions to the group last year.

Flockhart noted that the Indonesian market has strong growth potential, and "there could be opportunities that we might be interested in".

He said in an interview with Reuters that HSBC plans to launch banking services this year for small- and medium-sized enterprises in Indonesia, a market targeted for expansion along with the mainland, India, Vietnam and Malaysia.

And as the strategic focus of the bank has been shifted to the Asia-Pacific region, Geoghegan said the bank is moving its headquarters from London to Hong Kong.

US market not that gloomy

HSBC's plan to strengthen its presence in emerging markets is to offset the weakened US market, but Geoghegan reiterated that the bank will not step away from the US market.

Although he conceded that the US market is deteriorating and he hasn't ruled out changes in the group's subprime-linked investments there, he doesn't believe that the problem is nationwide, but rather located in a few states such as California and Florida.

Geoghegan admitted that confidence in the US stock market is lacking, but "the confidence can be restored if you realize that the economy is still growing".

Despite the worsening housing market in the US, Geoghegan isn't that worried about the bank's mortgage business.

"Even if the property runs into negative equity, it doesn't mean that people will stop paying for their loans," he said, adding that people are able to pay as long as they are employed.

(HK Edition 03/05/2008 page2)