HSBC's market share slides

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HSBC has lifted its second quarter net profit 12.9%, although its share of the mortgage market continues to slide.

Tuesday, October 10th 2006, 9:45PM

by Jenny Ruth

The bank's second quarter profit of just under $5 million brought its first-half result to $12.7 million, little changed from the previous first-half.

Its mortgage book shrank to $2.02 billion at the end of June from $2.11 billion three months earlier and from $2.17 billion at the end of June last year. HSBC has been losing market share since it bought AMP's mortgage book in the June 2003 quarter.

Unlike the other banks, HSBC doesn't include loans to loss attributing qualifying companies (LACQs), which are often used by property investors, in its residential mortgages figures.

Financial controller Craig Bell says the size of the LACQ book isn't available for public disclosure.

While HSBC's net interest income halved to $20.2 million in the latest quarter compared with the same quarter a year earlier, net trading income swung from a $15.8 million loss to a $2.5 million profit. Bell says this reflects a reclassification of arbitrage trades.

The bank's operating expenses fell to $18.1 million from $22 million in the second quarter last year.

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