HSBC's mortgage book shrinks but profits jump

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The HongKong & Shanghai Banking Corp’s New Zealand branch’s mortgage book continued to shrink in the September quarter, although its profitability increased strongly.

Tuesday, December 9th 2008, 5:02AM

by Jenny Ruth

HSBC’s latest general disclosure statement shows its mortgage book fell to $1.22 billion at September 30 from $1.25 billion three months earlier and from $1.38 billion in September last year.

Using Reserve Bank figures as a proxy for the market, its market share shrank to 0.8% in September from 0.82% in June. The proportion of HSBC’s lending with loan-to-valuation ratios above 80% remained very small but rose to 2.96%, or $36.1 million, at September 30 from 1.93%, or $24.2 million, at June 30.

The bank’s provisions for impaired loans rose to $10.65 million at September 30 from $9.64 million at June 30 and from $6.78 million in September last year. Those provisions are against total advances to customers of $3.78 billion and no break-down of loan type was provided.

Provisions for loan impairment charged against profit were $3.75 million for the nine months ended September compared with a $121,000 credit in the same nine months a year earlier.

HSBC’s net profit for the three months ended September rose 11.4% to $10.3 million from $9.2 million in the same three months last year. Profit for the nine months ended September was little changed at $27.8 million.

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