Lower profits for HSBC

HSBC Australia's contribution to group earnings fell by almost 20 per cent in calendar year 2007.

According to the HSBC Holdings 2007 accounts, released last night, the Australasian contribution fell from US$154 million of pre-tax profit to US$124 million.

The report does not give reasons for the fall, but currency fluctuations would have been a significant factor. Also, some adjustment would have to be made for the sale of a $2.3 billion broker-originated loan portfolio to FirstMac in late 2006.

Among the three operating divisions in Australia and New Zealand, pre-tax profit for personal financial services was down from $US76 million to $US41 million, commercial banking was up from $US32 to $US37 million and global banking and markets was down from $US46 million to $US42 million.

Loans and advances rose from $US8.7 billion to $US11.3 billion.

That loan book is made up of US$4.3 billion of residential mortgages (up from US$3.6 billion), US$922 million of other personal lending (up from US$586 million), US$2.1 billion of property related lending (up from US$1.6 billion) and US$3.9 billion of commercial and trade finance (up from US$2.9 billion).

HSBC Australia bulked up its sub-custody business after taking over Westpac's sub-custody operation.

The number of retail outlets offering the bank's point of sale consumer finance reached 1100. Retail partners include Ikea, Bang & Olufsen, Clive Peeters and Bing Lee.