HSBC suffers ballooning bad debt charges, mortgage book shrinks
The smallest of New Zealand's home lending banks, HSBC, posted a $3.6 million loss for the December quarter due to ballooning charges for bad loan and its mortgage book shrank.
Tuesday, April 3rd 2012, 4:55PM 
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by Jenny Ruth
HSBC's latest disclosure statement showed charges for bad loans jumped by $23.3 million in the quarter from just $1.2 million at September 30 and compared with the $4.6 million charge in the December quarter of 2010. In the September quarter, HSBC had written back $0.2 million of previous charges against profit for bad loans.
The latest quarter's loss compares with the $17.2 million net profit it reported for the three months ended December 2010. That meant HSBC's net profit for calendar 2011 fell 30% to $39.4 million.
HSBC's net interest income fell 9.6% in the latest quarter to $19.8 million and it was down 7.7% to $82.6 million for calendar 2011.
HSBC's mortgage book shrank by $11.2 million to $968.4 million in the three months ended December.
Interestingly, it was the safer part of the book which shrank while the riskier part grew - mortgages with loan-to-valuation ratios (LVRs) up to 80% shrank $20.8 million to $933.7 million while those with LVRs between 80% and 90% rose $7.5 million to $25 million and those with LVRs above 90% rose $2.1 million to $9.7 million.
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