Cautious HSBC CEO warns against growing "too fast": report

HSBC Holdings Chief Executive Michael Geoghegan attends a news conference in Hong Kong September 25, 2009.

LONDON (Reuters) - HSBC (HSBA.L) Chief Executive Michael Geoghegan is cautious about "growing too fast" because he fears a second economic downturn that could force further writedowns, he said in an interview published on Monday.

"We have to be very careful we don't grow the balance sheet so far before the recovery has come, only to write it back into the impairment line later on," Geoghegan was quoted as saying by the Financial Times. "I'm cautious about growing too fast."

HSBC (0005.HK) has repeatedly said it will look at opportunities thrown up by the recession, though it remains focused on organic growth and on emerging markets.

However, an unnamed executive at the bank was quoted by the newspaper as saying HSBC would make mid-sized deals a priority.

"You could well see us making a 5 billion-pound acquisition," the senior executive told the newspaper, quoting troubled banks' subsidiaries as areas of interest and highlighting "bits of Lloyds (LLOY.L) and Royal Bank of Scotland (RBS.L)."

HSBC declined to comment further.

HSBC was one of a group of lenders considering buying the Asian business of RBS. Talks between RBS and Standard Chartered (STAN.L) on assets in China, India and Malaysia have collapsed due to differences in valuation.

Geoghegan, who told the newspaper he expected a "w-shaped" recovery, was speaking days after an overhaul that will see him move to Hong Kong, as HSBC's focus shifts further east.

(Reporting by Jon Carter and Clara Ferreira-Marques, Editing by Greg Mahlich)