HSBC is the top bank in the local mortgage lending market for second-hand properties with a 27.1 percent market share in October this year, according to the latest report by mReferral mortgage brokerage and Ricacorp mortgage agency.

HSBC had the largest market share in the local mortgage lending market in October this year, the highest since June, 2006, after the bank's housing mortgage prime rate received an overwhelming response.

Trailing 6.9 percent behind HSBC, Bank of China (Hong Kong)'s market share rose from 14.2 percent in September to 19.4 percent, becoming the second lender in the market. It was followed by Standard Chartered at 8.5 percent and DBS at 4.7 percent.

Analysts predict that the mortgage lending market will continue to shrink in the coming two months due to stringent measures on lending by the banks in response to the economic downturn.

"Property market performance is unstable and big banks will cut their lending and offer on interest rate for housing mortgage. This inevitably lowers lending and it is expected banks like HSBC and Bank of China (Hong Kong) will lose some of their market share in the mortgage lending market in the coming months," Cookie Wong, chairman at Ricacorp mortgage agency said.

According to Ricacorp mortgage agency, there were 7,996 mortgage contract registries in October this year, down 11 percent from 8,982 registries in August. Due to the contract registries concerning existing properties only, the drop in figure also implies a shrinking second-hand property sale.

Hendrick Leung, financial director of Centaline, said, "The second-hand property sales will continue to shrink in November and December. Total turnover will drop 10 percent to around 7,100 registries in November and 20 percent to around 5,800 registries in December, respectively."

Sharmaine Lau, chief economy analyst, said in her statement that it was worth noting that the October figures showed smaller sized banks' market share was lifted due to their willingness in taking on the pressure from capital cost. However, Leung thinks this upward trend will not last.

(HK Edition 11/04/2008 page2)