A SPIN-OFF of Hongkong Bank by HSBC Holdings through a separate listing on the Hongkong stock exchange would realise a handsome result, says a local securities house. Vickers Ballas Hongkong says in a recently released report that if the market rated Hongkong Bank's earnings on a level comparable with that of its subsidiary Hang Seng Bank - that is, at a price-earnings multiple of 15 - the bank would have a market capitalisation of $50 billion. That would be equivalent to more than three per cent of the total market capitalisation, which currently stands at about $1.5 trillion. The advantage to shareholders would be that they could choose to participate in the group's currently more attractive Asian banking operations, centred on its traditional cash-cow Hongkong, undiluted by recovering but historically wobbly businesses in North America, Europe and Australia. Assuming the local market could absorb a public offering of the magnitude of Hongkong Bank, given the local stock exchange's stipulation that a minimum of 25 per cent of the shares of a listed company be in public hands, there are a number of ways such adeal could be structured. Vickers Ballas suggests that a targeted share scheme - under which there would be a tax-free distribution of new shares designed to reflect the performance of Hongkong Bank, subject to the consent of existing shareholders - might be the most suitable approach. Unlike a conventional de-merger, this would not involve the formal spinoff of assets or operations, which can involve sticky legal, administrative and operational obstacles. However, it would offer many of the same advantages including drawing attention to the success of one part of the business which might otherwise be overshadowed, greater flexibility with regard to capital-raising requirements and acquisition opportunities, and added incentives to management. When announcing group profits for 1992 last month, HSBC Holdings chairman Sir William Purves dismissed as ''highly speculative'' suggestions that an independent listing was in the offing. He said that description also applied to suggestions mooted that the group might strike a strategic alliance with the state-owned Bank of China as a precautionary measure in the run-up to resumption of sovereignty over Hongkong by China in 1997. However, he refused to rule out either possibility, saying that although there were no such plans on the board's agenda at the present time, management was prepared to consider a wide range of options. The ''overly generous'' 1992 dividend which the parent drained out of Hongkong Bank and its subsidiaries also supports the argument that the bank will be listed separately, says the Vickers report. The cost of HSBC's $5.5 billion dividend, representing a 50 per cent payout on earnings before exceptional items, pales in comparison with the amount which flowed up from subsidiaries, totalling nearly $10 billion plus an undisclosed amount As it stands, the parent company remains a good buy, according to Vickers Ballas. Although the share price has nearly doubled in the past year, outperforming the Hang Seng index by 40 per cent, the market is still undervaluing HSBC Holdings by at least $15, or 25 per cent. In terms of the relative performance of HSBC's share price against that of Hang Seng Bank, the group's overseas operations are weighing it down as the local subsidiary's share price is running neck-and-neck with the parent, benefiting from its image as apure Hongkong play. A present-day valuation of HSBC Holdings would give a target price of between $80 and $90 a share, compared with yesterday's close of $67.50, says the brokerage.