According to HSBC Holdings chairman Sir John Bond, the group is not shying away from the mainland lending business despite higher mainland-related bad-debt charges in the first half and a shrinking mainland loan portfolio. Sir John was speaking in Hong Kong yesterday following the release of the banking group's interim results, which saw a pretax profit rise of 10 per cent to US$4.06 billion. 'As a result of our recent experiences, you would expect us to reexamine our credit analysis but it won't diminish our appetite for banking sound businesses in China.' HSBC said its mainland lending portfolio dropped about 9 per cent in the first half compared with the same period last year. On Monday, the group disclosed a net charge for bad and doubtful debts of HK$1.74 billion in respect of lending to mainland-related companies in Hong Kong, the mainland and Macau - roughly 30 per cent of the net bad-debt charge in Asia-Pacific. Asked whether he felt concerns about recent high-profile mainland collapses were affecting lending in the region, he said: 'There are still lots of creditworthy people who are still borrowing money . . . At the moment in Asia, I would say there's still a fair amount of overcapacity in some property markets in Asia and in some industries, and until that's absorbed, it's unlikely that significant demand for funds will revive.' On HSBC's recently announced US$10.3 billion takeovers of Republic New York Corp and Safra Republic Holdings - which are expected to be completed in the final quarter - Sir John said the group was 'sensitive' to concerns about its ability to retain the private client base and senior staff. 'We've mounted a very serious campaign to have contracts for all of the key private banking executives and that has gone pretty well,' he said.