INTERVIEW-HSBC in Chinese financial bond underwriting deals

By Alison Leung and Clare Jim

HONG KONG, Nov 11 (Reuters) - HSBC Holdings Plc's (HSBA.L) (0005.HK) Chinese unit has said it is working on several yuan bond underwriting deals for banks in China, as Europe's biggest lender looks to break into the lucrative $2.5 trillion market.

HSBC Bank (China) Co., Ltd. is expected to be among the first foreign banks in China to underwrite yuan bonds issued by financial institutions in the mainland domestic market.

"We are working on a number of deals including domestic and foreign banks," David Liao, Treasurer and Head of Global Markets for HSBC China, told Reuters on Wednesday.

Foreign banks starved of revenue elsewhere are eager to grab more business in China, where GDP growth is exoected to exceed 8 percent this year.

"As corporates in China gradually look beyond bank loans and tap into the debt capital market, the growth of the domestic corporate bond market is promising and potentially very lucrative," Liao said. China's bond market is worth around 17 trillion yuan ($2.5 trillion), of which corporate bonds account for 2 trillion yuan.

"There is a lot of room to grow from the perspective of the outstanding loan market, which offers tremendous business opportunities," he said.

HSBC announced in September that CEO Michael Geoghegan would relocate to Hong Kong from London from February 2010. Analysts said the move showed that being close to China and the Chinese government was the most important thing to HSBC going forward. [nLP422830]