HSBC's profit jumps despite bad loans ballooning
HSBC continued to run down its mortgage book in the December quarter although profitability surged, despite charges for impaired loans nearly doubling.
Tuesday, March 31st 2009, 4:00PM
by Jenny Ruth
HSBC’s net profit for the three months jumped 44.9% to nearly $12 million, bringing net profit for calendar 2008 to $39.8m, a 10.7% increase on the previous year.
The bank’s charges against profit for impaired loans jumped to $6.5 million at December 31 from $3.75 million at September 30.
Gross impaired assets jumped to $33.1 million at December 31 from nearly $13 million at September 30, although they were still only 0.53% of its total $6.19 billion loan book.
Total provisions for impaired loans rose to $13.8 million from $10.65 million. HSBC gave no breakdown of the types of loans which are impaired.
HSBC’s mortgage book fell to $1.16 billion at December 31 from $1.22 million at September 30 and $1.35 billion in December 2007.
With all the banks’ general disclosure documents now published, that puts HSBC’s share of bank mortgage lending at 0.78%, down from 0.84% at September 30. HSBC’s mortgage book has been shrinking since December 2005.
The proportion of HSBC’s mortgages with loan-to-valuation ratios above 80% jumped to $97.7 million, or 8.4% of the total book, from $36.1 million, or 2.96% of the total book, at September 30.
HSBC’s figures confirm the government-owned Kiwibank did the lion’s share of new lending in the December quarter. Excluding the newly registered SBS Bank’s $1.63 billion mortgage book, mortgage lending by banks rose $0.97 billion in the three months of which Kiwibank accounted for $0.87 billion, or 89.7%.
| « Bluestone actively managing loans | SBS profit jumps in Dec Qtr despite rising mortgage arrears » |
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