HSBC has consolidated its position as a top ten bank in the Australian market after a sharp fall in funding costs pushed the local business to a record full year profit.Disclosures on HSBC's global website reveal that HSBC Bank Australia Limited generated net earnings of $288 million in the 12 months to the end of the December.The bottom line was seven per cent up on the 2016 full year profit of $269.5 million.The latest result confirms HSBC as the tenth largest profit-spinner in Australian banking behind Bank of Queensland, Suncorp, ING, Bendigo, Macquarie and the four majors.HSBC managed to grow its bottom line despite flat revenue growth from lending activities.The main driver of the result was a nine per cent fall in interest expenses associated with deposits drawn from consumers and business clients.Total interest costs incurred during the year declined by $26.4 million to $298.6 million.The company's performance was also enhanced by lower impairment charge, which fell by $12 million to $210 million.HSBC is expected to eke out market share gains in home lending this year after it deepened its distribution links with mortgage aggregation groups during 2017.While the Australian operations contributed less than two per cent of HSBC's global profit last year, that was sufficient for the local arm to acquire "significant subsidiary" status within the group's audit process for the first time.This is a significant development for the board of the local arm, which is chaired by former Perpetual kingpin, Graham Bradley.The higher status attached to the Australian business means that its annual performance is now exposed to greater scrutiny of international banking analysts and institutional investors.HSBC group management now discloses more details about the Australian operations in presentations made to the international investment community.The bigger profile means that Bradley's board and management are now under greater pressure to drive profitability in the local operation and to repatriate profits.All of the 2017 profit increase (and some) was swallowed by the parent company through higher dividend distributions.Dividends paid by the Australian business rose by $27.6 million to $157.5 million.