LONDON (Bloomberg) — HSBC Holdings Plc declined in London trading after Goldman Sachs Group Inc. said Europe's biggest bank by market value may need to increase US bad loan provisions by $13 billion.

The bank declined 4.8 percent to 772.5 pence, valuing London-based HSBC at £91.4 billion pounds ($179.8 billion).

"Our economists now expect the US to slip into recession, and US property prices to fall by 20 percent to 25 percent," wrote Roy Ramos, an analyst in Hong Kong, in an e-mailed report today. "This leads to unnerving prospects for HSBC." Ramos recommended investors sell the stock.

HSBC, which bought US subprime lender Household International Inc. for $15.5 billion in 2003, has since ousted managers, closed mortgage units and stopped trading and selling mortgage-backed securities.

HSBC may need to add $13 billion to sub-prime provisions, on top of $4 billion set aside between the fourth quarter of 2006 and the third quarter of 2007, Goldman said.

About 70 percent of HSBC's $91.1 billion US mortgage loans may fall into negative equity, whereby borrowers owe HSBC more than their houses are worth, the analysts wrote.