Zacks Analyst Interview Highlights: HSBC Holdings, Mitsubishi UFJ Financial Group and UBS AG

Business Wire, Sept 18, 2006

CHICAGO -- Zacks.com releases the latest Analyst Interview. Today's interview is with senior analyst Ann Heffron, who discusses HSBC Holdings plc (NYSE:HBC), Mitsubishi UFJ Financial Group, Inc. (NYSE:MTU) and UBS AG (NYSE:UBS).

A synopsis of today's Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.

Are issues with U.S. banks felt more deeply in European banks or Latin American ones?

Good question. I think that economic issues in the U.S. affect both the European and Latin American banks, but in different ways. For example, most of the European banks I cover have a direct exposure to the U.S. through their investment banking, corporate lending and asset management operations, which are rather large in some cases. Therefore, any sort of slowdown would directly hurt revenues and earnings.

In addition, there is an indirect effect. By this, I mean that fiscal and monetary policy in the U.S. affects other countries, given the increasing globalization of trade and greater global interdependence among countries. A slowdown in the U.S. will be felt across the rest of the globe, whether a bank is located in Europe, Asia or Latin America. This is not to say, however, that banks will not be affected by their local economies--they will. But they will also be exposed to fluctuations in the U.S.

Do you foresee much expansion of foreign banks into Asia, as Credit Suisse recently announced it was planning?

Yes, we do. Asia is proving to be a very attractive market in which to invest, particularly in China, Indonesia, South Korea, and India due to the fact that these economies are expected to grow much faster than those in more developed markets, such as Europe and Japan. For example, HSBC Holdings plc (NYSE:HBC) has made a number of investments in China. These included:(1) the $1.75 billion purchase of a 19.9% interest in Bank of Communications Limited, the fifth largest bank in China with $112 billion in assets; (2) $208 million for a 15.98% stake in Industrial bank; and (3) $1.2 billion to retain a 19.9% interest in Ping An Insurance. In the last few days, Mitsubishi UFJ Financial Group, Inc. (NYSE:MTU) has been holding talks to purchase Indonesia's Bank Nusantara Parahyanagan. UBS AG (NYSE:UBS) recently purchased 51% of Daehan Investment Management Trust Company (DIMCO), Korea's largest asset management company with US$20.5 billion of assets under management. As you can see, the interest is widespread.

Read the full interview at http://at.zacks.com/?id=2647.

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