Hang Seng Bank's 1996 results underwhelmed the market yesterday, prompting a handful of sell recommendations and a $4.25 drop in the share price to $84.75. Investors were easier on parent bank HSBC, which reported a more favourable set of earnings on Monday. HSBC lost $2.50 in Hong Kong trade to close at $186.50, and fell 30 pence in London to GBP15.52. Third-party covered warrants issued on both banks suffered deeper falls. Hang Seng Bank reported profit growth of 6.3 per cent on Monday - well below analysts' expectations of a 16 per cent rise. Many analysts had assumed the bank would sell stocks and bonds to smooth last year's earnings, but the bank decided to hold on to its investments. Provisions for bad debts also ate into the bank's bottom line. Several brokerages have downgraded Hang Seng Bank to a sell, but the pessimism is by no means universal. Sassoon Securities changed its recommendation to hold from buy. Banking analyst Emerald Kwai said the slowdown in disposal of investment securities remained his concern, especially since the bank had been less aggressive in developing core banking businesses than its counterparts. Other analysts pointed out the bank's branch network remained strong, their core business solid and their balance sheet above average. Goldman Sachs banking analyst Roy Ramos said yesterday's plunge in Hang Seng's share price offered good buying opportunities. He said Hang Seng's core business remained strong and the slowdown in asset disposal would not damage the overall outlook. He reiterated his buy recommendation for Hang Seng and set a one-year price target at $110, or 18 times his projection for 1998 earnings. For HSBC, analysts seemed firm in their buy and hold recommendations yesterday, with several re-affirming that the shares would cross the $200 mark this year.