HSBC is one of the world’s largest financial institutions, with profits in 2010 dominated from Asia ex. Hong Kong (31%), Hong Kong (30%) and Europe (23%). The bank did not need state aid during the financial crisis and impairments on loans losses fell from 2.8% of total loans in 2009 to 1.5% in 2010. Although PIIGS sovereign exposure is the highest among the major UK banks, EU stress test results were sound and the bank reported a 10.5% Core Tier 1 Capital ratio (2010). Total loan volumes and deposits were up 7% (USD 958bn) and 6% (USD 1228bn) respectively. A lower loan/deposit ratio (78% 2010) than UK peers and capital from the sale of non-core assets offer sufficient liquidity to further expand in emerging markets (EM). The strong capital position combined with ample liquidity will be crucial for HSBC's competitive edge when Basel 3 is implemented. A strong EM distribution network will aid bank insurance penetration and RMB trade settlement businesses. However, an asset bubble scenario in China coupled with aggressive lending by local banks, is a risk.