HSBC Holdings plc’s Saudi affiliate, booked $93.7 million in provisions for loan losses during the third quarter. “We may see some extra provisions in the fourth quarter but most banks will come clean by early 2010,” said Adnan Ahmed Yousef, president of Union of Arab Banks. Arab banks set aside $3.5 billion so far this year against bad loans.

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Today Hemscott said, in part: “HSBC’s recent stumble with Household, which suffered deep losses in the U.S. mortgage crisis and was shuttered in 2009, demonstrates the inherent difficulty in managing disparate operations. When HSBC acquired Household in 2002, it trumpeted the firm’s risk-modelling systems, which it anticipated would enable it to judge the riskiness of loans more accurately than competitors could. As it turned out, HSBC placed too much faith in its newly acquired expertise and failed to adequately supervise its U.S. managers. It has since admitted that the acquisition was a mistake–and a very costly one at that.” (see full article here)

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Business Standard says there is an “inevitable eastward shift in HSBC’s business. The bank has already issued a renminbi-denominated bond, and has applied for a listing in Shanghai in an attempt to appear more local. As income, assets and the investor base become more Asian, more of the senior team will be packing their trunks.”

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Will HSBC’s focus on emerging markets come at the cost of markets ruined by subprime and predatory lending? The answer remains to be seen but HSBC wants to expand in the U.S.. Said another way, HSBC wants deposits from anywhere.

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