HSBC sees June quarter profit fall as expenses rise and income drops; Grows residential mortgage book

By Gareth Vaughan

HSBC New Zealand saw its June quarter profit fall 12%, as income fell and expenses rose, but lifted its home loan book by NZ$42.7 million.

The bank's General Disclosure Statement  for the half-year to June shows profit after tax for the three months to June of NZ$12.4 million, down NZ$1.62 million, or 12%, from NZ$14.02 million in the June quarter last year. Profit was also down in the March quarter, which John Barclay, HSBC's head of retail banking and wealth management, attributed to "significant investment" in technology.

Operating income fell NZ$5.25 million, or 13.5%, to NZ$33.55 million from NZ$38.8 million as operating expenses headed in the opposite direction, rising NZ$1.51 million, or 10%, to NZ$16.3 million from NZ$14.79 million. Net interest income fell to NZ$22 million from NZ$23.4 million.

Meanwhile, HSBC's residential mortgage book grew by NZ$42.7 million to NZ$1.26 billion. The bank has been targeting wealthy customers through its "Premier" loans, the HSBC group's premium international banking service. Premier customers’ must have mortgages worth NZ$500,000 or savings of NZ$100,000 to qualify for a loan.

Through its Premier loans HSBC offers the lowest advertised fixed interest rate by a bank with its six month 5.49% per annum rate. See all bank advertised mortgage rates here.  HSBC recently ended a special offer whereby it offered 4.99% six month fixed-term home loan rate if a customer also took out a home and contents insurance policy with the bank.

HSBC's total assets and total liabilities were both down slightly in the three months to June. Total assets slipped to NZ$4.68 billion from NZ$4.69 billion and total liabilities to NZ$4.66 billion from NZ$4.68 billion.

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