In the global banking playground, it is HSBC’s turn to be picked on. In the past three months, the bank’s shares have fallen 9 per cent, while the banking sector globally has gained 8 per cent. Troubles at Household, the US consumer finance group acquired in 2003, are the latest catalyst. Losses on Household’s US mortgage book in the third quarter were all the more galling given prior eulogising of the credit risk models built by its 120 PhD-holders.

Based on Household’s travails alone, though, HSBC’s weakness is overdone. Household generates a fifth of group profits and only one part of that business – second lien mortgages – has run into trouble. It is quite possible that broader problems are looming in the US. But UBS reckons that at HSBC’s current share price, the implied value of Household, forecast to generate $2.3bn of earnings in 2007, is less than zero.