``This result was mainly due to a 23 per cent increase, to A$41.8 million, in profit before tax of our commercial banking business, largely arising from a 16 per cent rise in net interest income,'' chief executive officer Chris Crook said in a statement, noting that losses in its HSBC Securities unit had affected the overall result.

``Fees and commissions declined by A$23.5 million to A$83.1 million as a result of lower income from HSBC Securities Australia Ltd,'' Crook said.

The bank said HSBC Securities reported a pretax loss of A$14.1 million. HSBC Asset Management Australia posted a 26 per cent lower pretax profit of A$5.5 million, Hong Kong Bank of Australia said.

Net recoveries of bad and doubtful debts were A$3.3 million, a better than expected result, and reflected the strength of the Australian economy despite regional weakness, Crook said. Total assets of the Australian unit rose five per cent to A$5.0 billion.

Hong Kong Bank of Australia Ltd is the Australian unit of HSBC Holdings Plc which on Monday reported a 19 per cent lower calendar 1998 pretax profit of US$6.57 billion, struck on 5.5 per cent higher net interest income of US$11.55 billion.

The Australian arm said it would shortly change its name to HSBC Australia Ltd in line with the HSBC group's strategy of global branding.