HSBC continues to lose mortgage market share

That showed its residential mortgage book dropped to $2.2 billion from $2.88 billion at the end of December. That made it look as if its share of the mortgage market fell to 2.2% from just under 3% at the end of September.

HSBC NZ financial controller Hoshang Madon says that after the September quarter document was produced, his bank approached the Reserve Bank of New Zealand for clarification of how it should be reporting its mortgage book.

It had been including mortgages lent to loss attributing qualifying companies (LAQCs) as residential mortgages but the central bank said these loans should be 100% risk weighted rather than the 50% risk weighting normally allowed for residential mortgages.

LAQCs allowed residential property investors to offset any losses against their other income to reduce the amount of tax they are liable to pay.

Madon says $587 million of loans that it would previously have treated as residential mortgages are now reported in its "all other assets" category. That jumped from $2.11 billion at the end of September to $2.74 billion at the end of December.

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