HSBC posts record Australian profit

As most of the country's leading retail banking franchises bumbled through 2019, HSBC Bank Australia hit an earnings sweet-spot.

The local arm of the Hong Kong and London listed banking giant posted a 10 per cent rise in net profit to A$330 million on the back of market-leading growth in home lending and stronger revenue from trading activities.

HSBC, which has been carefully deepening its distribution through mortgage brokers, grew its home loan book by more than $4 billion or 23 per cent to beyond $20 billion in the 12 months to the end of December.

Most of the lending expansion is being funded through deposits, which grew by almost $4 billion to $32 billion.

The surge in deposits was partly attributable to competitive pricing that undermined the net interest margin.

Revenue was also crimped by the sector-wide decline in transaction and administrative fees, which declined more than $24 million.

However, the bank's revenue was bolstered by hefty gains from hedging activities and other trading income.

The Australian subsidiary distributed more than half of its 2019 profit in dividends to the parent.

About $163 million was paid out during the year ended December, with another $73 million declared payable in early February.

However HSBC's London and Hong Kong investors won't be sharing in the Aussie spoils after the Bank of England forced the group board to suspend dividends for the duration of the COVID-19 crisis.

The decision triggered a revolt by Hong Kong investors, with the Nikkei Asian Review reporting last night that shareholders were agitating for an extraordinary meeting to force a vote on the dividend ban.

As political leader C.Y. Leung wrote on Facebook that Hong Kong shareholders should abandon the bank.

"It is not a Hong Kong bank anymore," Leung told Facebook followers. "HSBC has no intention of relocating its headquarters back to Hong Kong... We should set up our own bank instead."