About a year ago ING Financial Markets reported that the outlook for Hong Kong's leading banker, HSBC Holdings, was not bright. Given the group's recent poor acquisitions and low returns, it maintained its 'hold'' stance and recommended a 12-month target price of HK$78. The counter closed at $117 on Friday. ING said that the group's Latin American operations were casting a black cloud over earnings. The operations were a test case for the theory that it could grow by acquisition and earn its cost of capital. '[But] the results are unfavourable; since inception in 1997, HSBC has earned almost no money in the region,'' ING said, adding that the collapse of the Argentinian banking system in 2002 cost the group US$1.2 billion. The failure of Latin American operations to earn a return on investment had helped to drag the group's return on equity down below 14 per cent in the most recent period. In August HSBC posted a larger than expected 25 per cent jump in interim profit to US$4.1 billion on the back of recent acquisitions in North America. Cash profit reached US$4.87 billion, up 32 per cent over the same period last year. The results benefited from the acquisitions of Household International, the biggest independent consumer finance group in the United States, and Grupo Financiero Bital, Mexico's fifth-largest commercial bank. Last month it was reported that HSBC Holdings was buying most of the Brazilian assets of Lloyds TSB Group for US$815 as it expanded in consumer finance in North and South America. It would buy the Losango Promotora de Vandas consumer lending unit and Brazilian treasury operations for US$451 million, plus Lloyds' Brazilian corporate and offshore loan books.