Grand strategies often spring from disaster. For HSBC Holding Plc - whose return to its China roots gained momentum last week when it hired mainland advisers to help it become the first foreign company to list in Shanghai - it began quite suddenly on February 7, 2007. Europe's largest bank shocked the financial world by saying it was writing off US$10.5 billion in bad debts, most of it at HSBC Finance, the United States credit card and subprime mortgage unit it acquired in 2002. HSBC was the first bank to sound the alarm on the subprime crisis, which quickly mutated into a worldwide financial crisis - taking down or hobbling many of the world's largest lenders - and then, arguably, kicked off a global recession. So far HSBC has set aside about US$32 billion to cover losses from its sketchy US mortgage venture, which one wag dubbed 'banking on American trailer trash'. Since then the bank - often prodded by the biting criticism of vocal minority shareholder Knight Vinke - has steadily refocused its operations back on Hong Kong and the mainland, where it began 144 years ago. Two months after its bombshell, HSBC Bank (China), based in Shanghai, started operations as a locally incorporated foreign bank. Of course, the bank never really left China; in Hong Kong, it is one of three note issuing banks and has more than 200 branches. 'We've always been highly committed to China,' said HSBC's Asia Pacific chief executive, Sandy Flockhart. But clearly there has been a resurgence. On the mainland, where it employs 5,500 people, HSBC now has 89 outlets and offices in 20 cities - the largest network of any foreign bank. It holds 19 per cent of Bank of Communications, 16.8 per cent of Ping An Insurance and 8 per cent of the Bank of Shanghai. In June it sold 1 billion yuan of renminbi-denominated bonds in Hong Kong - the first foreign bank in the city to do so. HSBC is also known to be on the hunt for joint venture partners to tap the mainland's vast and rapidly growing insurance and securities markets. But the cap on its return to China would be a listing on the Shanghai stock exchange. There are high hurdles to overcome, but a listing - and being the first foreign company to list - would have significant practical and symbolic benefits for HSBC and Beijing. The bank doesn't need the capital, but it would bring billions in local currency for operations and lending. Plus, once it counts the possibly millions of mainlanders as shareholders, it could likely soon convert many into customers. And the HSBC name is legendary there. For Beijing, an HSBC listing would signal a financial maturity. 'It would be a significant move towards internationalisation,' said Yi Xianrong, a researcher at the Chinese Academy of Social Sciences.