Hong Kong's economy is expected to contract this year but is likely to stabilise near the end of the year, according to Michael Geoghegan, the chief executive of HSBC Holdings. Mr Geoghegan told shareholders yesterday at the bank's informal shareholders' meeting in Hong Kong that the Asian economy remained resilient. Exports might struggle for a while, but government fiscal stimulus packages, together with falling interest rates, should spur domestic demand in the region, he said. 'In 2010, we should see growth in the region strengthen further, led by China and India,' he said. Mr Geoghegan said Hong Kong's exports were likely to recover by next year. He said he expected that the global economy would still be in difficulty in 24 months and that banks worldwide would face 'headwinds'. Mr Geoghegan said HSBC would share some of the pain but the bank had positioned itself so that it could ride out the storm. When asked if the bank would make acquisitions during the economic downturn, he said HSBC had a history of acquiring assets when others had to sell, but 'I am not sure if opportunities are there yet', he said. Mr Geoghegan said he expected to see consolidation in the financial industry later this year and next year, adding that the bank would make acquisitions if opportunities arose. He said the bank was doing well so far this year through organic growth, particularly in emerging markets and Asia. Since some other banks have withdrawn from those markets, its global banking and markets division had a record performance in the first quarter. Stuart Gulliver, head of global banking and markets, said the division had a very good start in the first five months. However, the outlook remained uncertain and it was hard to predict for the rest of the year. Mr Geoghegan said the bank had divided its United States operations into core and non-core businesses. The non-core businesses, including mortgages, vehicles and consumer financial services, were being run off. The remaining card and retail business broke even in the first quarter even amid the recession. He said the outlook for the card portfolio depended on the unemployment situation, but he thought the business could ride out the storm unless the economic picture deteriorated further. Mr Geoghegan added that the bank would look in the next two years at how to link its US card business with its global card business. Separately, Mr Geoghegan reiterated that the bank wanted to list on the mainland but it was difficult to predict the timeframe, since the decision was in the hands of the mainland authorities.