HSBC profit rises 30 per cent

HSBC yesterday reported a pre-tax profit for its Australian operations of US$51 million for the six months to June. This was an increase of only four per cent over the US$49 million of pre-tax profit reported in the previous corresponding period.

The bank said that on a continuing basis the Australian business increased pre-tax profit by 30 per cent, which was in line with earnings growth reported in 2006.

This ongoing result was achieved after making adjustments for a substantial commercial recovery in the first half last year and for an accounting treatment related to the purchase of Westpac's sub-custody business in the latest half.

Total loans and advances at June 30 were US$9.8 billion, compared to US$8.7 billion at the end of 2006. Customer accounts rose from US$8.5 billion to US$10.3 billion over the same period.

HSBC reported the results of its Australian business separately for the first time. In previous reports it has included Australia and New Zealand together.

HSBC Australia chief executive Stuart Davis said the highlights included a 46 per cent increase in credit card business over the previous corresponding period and a 30 per cent increase in online deposits.

A year ago the bank introduced a credit card system developed by the group's US finance company subsidiary Household International (now called HSBC Finance Corporation).

Davis said it had made a big difference to the business. "It has given us a lot more functionality and greater efficiency. Our cost of issuing and account administration has gone down and we have been able to price our products more keenly.

"We have a small base in this market and one advantage of that is that we don't have to protect any legacy business. We have been able to hit our target markets hard."