HSBC Holdings is preparing to boost its lending in Hong Kong, India and other parts of Asia this year as the group anticipates an increase in deposits, according to chief executive Michael Geoghegan. He said yesterday many Asian governments, including Hong Kong, were expected to withdraw from their 100 per cent deposit guarantee schemes by the end of the year, which was likely to draw depositors to HSBC. The deposit guarantee schemes were introduced during the financial crisis to bolster confidence in banks. Financial Secretary John Tsang Chun-wah last week indicated Hong Kong would work with regional governments to withdraw from the schemes by the end of this year. 'We will boost our lending in the region in light of the growing deposit base. India, Indonesia and Hong Kong offer a lot of lending opportunities,' Geoghegan said. 'I am particularly bullish about Hong Kong as it will benefit from the economic growth of China.' Geoghegan said it was 'ironic last year that a growth of deposits was exactly why [HSBC's] profit in Asia and Hong Kong declined'. Lending demand did not match the growth in deposits, which cost the bank in interest payments. Hong Kong was HSBC's most profitable geographical segment last year, contributing US$4.2 billion to the group's US$5.8 billion net profit, but this was down 8.8 per cent from US$4.6 billion in 2008. He said enterprises were beginning to expand again. He noted that Britain's biggest insurer, Prudential, had agreed to pay American International Group US$35.5 billion in cash and stock for AIA, its Asian life insurance unit, to expand in China and India. HSBC is one of the underwriters for the rights issue that will finance the deal. Geoghegan said HSBC would like to boost its investment banking business to handle more mergers and acquisitions. He expects a reduction in losses in the US and growth in Asia to determine future profitability. HSBC's share price dipped 7 per cent yesterday to close at HK$80.55, after the group reported lower than expected results on Monday due to more losses from its US operation. Geoghegan, who relocated to Hong Kong from London last month to get closer to the region where the bank wants more expansion, said: 'I want to listen more to what the shareholders and depositors want.' He would visit branches and ATMs. 'I want to make sure the customers are happy.'