ON TUESDAY, HSBC Holdings will announce its interim results and some analysts are predicting a growth in earnings per share of up to 44 per cent in Hong Kong dollar terms, and 83 per cent in sterling. Although the outlook for the local banking sector is a little dismal, few are preparing for a disappointment, despite the poor performance of subsidiary Hang Seng Bank two weeks ago. But the bank still seems to hold problems for analysts and investors alike. Analyst with Smith New Court, Gary Baker, explained it was difficult to pin the bank down. He said: ''The bank is so much of a global story now. Investors looking for a play on Hong Kong might see it as that, and yet its overseas holdings make it so much more.'' Managing director of UBS Securities Hong Kong, John Mulcahy, also insisted HSBC was not a play on the Hang Seng Bank. He believed a sell-off on HSBC following the poor Hang Seng Bank results was an overreaction. He said: ''HSBC is a play on its overseas holdings such as the Midland Bank and Marine Midland in the United States, which are showing signs of recovery.'' However, there is little doubt HSBC is undervalued. Regional Banking Research Director for Credit Lyonnais Securities Asia, Laura Grenning, said HSBC's interim results could be promising. She said: ''I expect in Hong Kong dollar terms earnings per share to grow by 44 per cent to $4.43 from $3.08. But in sterling terms, the growth will be more dramatic due to currency fluctuation. In sterling terms I see a growth of 83 per cent, from 21p to 38.5p.'' Despite the decelerating growth in the local banking sector, Ms Grenning believed the market was wrong to tar HSBC with the same brush as Hang Seng Bank. Ms Grenning pointed to Hongkong Bank's Asian operations. She said: ''The bank has a viable and feasible network in Malaysia and in Singapore. Both sectors are looking at accelerating growth. ''Another aspect is the group's fee income from treasury operations and cash handling around the world which makes a substantial contribution. It was about 40 per cent of profits last year. That is a service Hang Seng Bank does not have. ''Finally, Hang Seng Bank is more expensive than Hongkong Bank. Hang Seng is priced at 14.8 times 1994 estimated earnings, while HSBC is 8.2 times 94 earnings. That makes it 55 per cent cheaper but with better prospects.'' Mr Baker said this year was not going to be a flag year in terms of earnings for HSBC. He said: ''People are already looking to 94. For now we are expecting about GBP1.1 billion (about HK$12.8 billion) pre-tax. Given the tighter regime on the local banking scene and disappearing profitability, there will be an increase of interest in HSBC. I expect money to switch from stocks such as Hang Seng Bank and Bank of East Asia.'' Research Director of Vickers Ballas, Barry Yates, suggested in recent research that there was sound argument for a separate listing in Hong Kong of Hongkong Bank. Mr Yates pointed out that by separating the group's banking operations, HSBC's shareholders would have the opportunity to participate directly in what he described as the attractive Asian regional banking operations as well as have an interest in HSBC's global banking operations. There are few analysts who would disagree with him. However, there seems little likelihood of this happening in the near future.