The ratings on The Hongkong and Shanghai Banking Corp. Ltd. reflect the bank's stand-alone profile, which is enhanced by the advantages of being a member of the wider HSBC Holdings PLC group (HSBC group). The Hongkong and Shanghai Banking Corp. profits from its dominant position within the Hong Kong domestic banking market and extensive presence within the Asia-Pacific region. The bank continues to report good profitability, diversified earnings, satisfactory asset quality, a stable funding base, and adequate capitalization. The bank also benefits from the synergies arising from the operations of other major subsidiaries of its U.K.-based parent. These favorable factors are counterbalanced by the above-average industry risk that characterizes the Hong Kong and other Asian banking sectors, within a global
