HSBC mortgage book shrinkage

The smallest of New Zealand's home lending banks, HSBC, saw its mortgage book shrink in the March quarter for the third successive quarter while profit rose modestly.

Wednesday, May 30th 2012, 9:09AM

by Jenny Ruth

HSBC's latest disclosure statement shows its mortgage book stood at $962.5 million at March 31, down $5.9 million from December 31 and compared with $991.5 million at June 30 last year.

Mortgages with loan-to-valuation ratios (LVRs) between 80% and 90% showed the biggest fall, down $8.7 million to $16.3 million. Those with LVRs below 80% increased by $1.8 million to $935.5 million, accounting for 97.2% of the total book, and those with LVRs above 90% grew by $1 million to $10.7 million.

Assuming Reserve Bank figures are a good proxy for those shown in bank disclosure statements, that puts HSBC's market share at March 31 at 0.56%, down from 0.57% at December 31 and 0.59% at June 30 last year.

Net profit for the three months rose 4.1% to $12.6 million compared with the March quarter last year, mostly reflecting a decline in charges against profit for bad debts to $318,000 from $623,000. Net interest income rose 2.5% to $21.6 million in the three months.

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