"Our retail banking business has slowed down," said Peter Wong Tung- shun, executive director of Hongkong and Shanghai Banking Corp.

"Our huge base of deposits will support us to expand our lending volume when the market turns around."

Wong said retail banking business in the SAR has been negatively impacted by a contraction in the net interest margin during the first three quarters of the year. But fee-based services such as insurance and equity investment have grown because large companies are more willing to invest.

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The bank's lending business improved in the third quarter, Wong said. HSBC also plans to hire more staff in Hong Kong.

Meanwhile, HSBC has been licensed to open another 13 outlets in Taiwan in addition to its 34 existing outlets there, according to Wong.

Shares in HSBC closed at HK$98 yesterday, up 0.93 percent, outperforming the Hang Seng Index.

With investors expecting the stock to break HK$100, Wong said: "As an employee of HSBC, I feel happy.

"But I'm under pressure as I have to do even better."

Wong also expects profit contribution from the Asia-Pacific to drop once the loss-making US operations recover.

The lender wants to maintain the earnings contribution from the Asia- Pacific region at 50 percent.

After learning a lesson from its loss- making consumer finance business in the United States, HSBC has withdrawn from such business in India and Indonesia owing to their high bad loan ratios, Wong said. ALFRED LIU