Smaller banks appear to have achieved a first-round victory over larger institutions in last year's price war on residential mortgage rates, latest results show.
The eight smaller counters which have reported their earnings so far said residential mortgages had grown more than 25 per cent last year.
In contrast, Hang Seng Bank - the territory's largest Hong Kong-incorporated bank - saw growth in residential mortgages of only 13 per cent in 1996.
HSBC's breakdown for Hong Kong - which includes contributions from Hongkong Bank and Hang Seng Bank - showed only 6 per cent growth in mortgage assets.
Analysts estimated that stripping out the contribution from Hang Seng and sterling appreciation effects, Hongkong Bank's mortgage loans grew slightly more than 10 per cent.
It is understood in the industry that Hongkong Bank and Hang Seng Bank - being the biggest two players in the market - are 'morally responsible' for maintaining 'a minimum order' in the marketplace.
