HSBC reported a mildly reduced profit in Australia for the second half in a row, group financial statements for HSBC published overnight show.In Australia HSBC reported a pre-tax profit of US$84 million in the six months to June 2009, down from US$100 million in the June 2008 half and US$76 million in the December 2008 half.The return on assets (using pre-tax profit and loans as a proxy for assets) fell to 1.53 per cent in the current half, down from 1.6.3 per cent six months ago and 1.57 per cent 12 months ago.The HSBC profit in Australia for the December 2008 half was affected by an investment misadventure with an undisclosed bank in Iceland.HSBC may be doing better than most other foreign banks in the local market on the asset side if APRA data is any guide.The bank reported growth in home loans of 11 per cent in the year to June 2009, APRA data published last week shows. For all banks the 12-month rate of growth was 13 per cent, with Commonwealth Bank an Westpac accounting for most of the system growth.On the liability side HSBC has recorded a decline in household deposits and also business deposits this year.The quarterly "pillar 3" report for HSBC Bank Australia provides some additional insight.The bank recorded A$78 million in impaired loans at March 2009 and A$76 million in loans 90 days or more past due.The quarterly report also shows gross credit exposures of A$20.5 billion at March 2009, a difference of more than 50 per cent to the measures of loans and advances reported by HSBC in its group financial statements.The reported residential lending exposure for HSBC under pillar 3, at less than A$2 billion is less than half the reported residential lending listed in the monthly banking statistics compiled by APRA, at $4.6 billion at March 2009.