HSBC Holdings will regain its earnings stability now that interest rates apparently have peaked. HSBC has emerged from a particularly difficult year after suffering major losses on fixed-income derivatives trading during the first quarter of 1994. Like most other players in the market, HSBC Markets was taken off-guard by the Federal Reserve's sudden increase in interest rates last year. HSBC dealing profits should be more stable in 1995. Brokerage DBS Securities expects them to increase from $4.1 billion to about $7.1 billion in 1995. The brokerage also does not think provisions for bad debts will rebound to the high levels of the early 1990s, when the bank had significant bad debts due to the Olympia & York failure, Alan Bond's collapsing empire, Latin America debt and a general recession in Western economies. DBS expects the bank's compound growth for the next three years to remain strong at 14.8 per cent, and expects strong contributions from its non-Asian divisions.