HSBC says no Aussie bid likely

HSBC has ruled out a bid for St George Bank or any other Australian bank if industry consolidation gets under way in the wake of the proposed Westpac-St George merger.

HSBC Asia Pacific chief executive Sandy Flockhart said in Hong Kong yesterday that the price multiples of the Australian banks were too high for HSBC to consider an acquisition.

Flockhart said a bid for St George only made sense for a local buyer who would be able to take costs out.

He said: "We would have to see a change in valuations to see any attraction in the Australian market. St George is a domestic situation."

One energetic rumour a couple of weeks ago had HSBC lining up to buy ANZ.

Lockhart said the group's focus was firmly on extending its reach in emerging markets.

He said he was happy with the Australian operation. A number of businesses, including stockbroking and retail funds management, were sold during the past couple of years.

"We have had a re-focus. In retail we have a high-end operation and in commercial and corporate we are leveraging off other parts of the business.

"We are in a good position there. We are not over-lent and we have a strong capital position. We can have relationships with the clients we want to."

Flockhart was sceptical about the claims being made by some banks outside the region that they had strong growth prospects in Asia. He said there were few assets for sale, a lot of interested buyers and everything was expensive.

Disclosure: John Kavanagh is visiting HSBC operations in Hong Kong along with a number of banking writers from Australia and Singapore, and with the trip funded by the bank.