SINGAPORE Foreign banks armed with innovative products and sleek marketing are quickly muscling in on Singapore mortgage lending, the most lucrative part of consumer banking, a published report said on Friday.

The Hong Kong and Shanghai Banking Corp. (HSBC) and standard chartered are targeting double-digit increases in home loans at a time of record low sales that have resigned local banks to single-digit growth rates, the *****Business Times**** said.

Standard chartered increased its mortgages by 14 percent last year while HSBC managed to expand its home loans portfolio by 6 percent to 497 million U.S. dollars.

In contrast to the rush by local banks to pull out surplus Automatic Teller Machines (ATMs) and costly branches, the report said the foreign institutions are staying open for Sunday banking and boosting their ATM networks.

Standard chartered is about to launch Sunday banking at five of its 20 branches. HSBC is currently offering Sunday banking at four and is open seven days a week except holidays.

Under Singapore liberalization of its banking sector, Qualifying Full Bank Licences (QFBS) were issued to four institutions in 1999.

They were Citibank, Standard Chartered, Abn Amro and BNP Paribas, Europe's second-largest bank.

HSBC holdings Chairman John Bond said the bank would consider applying for one of two more licences scheduled to be issued this year.

Malaysia's Maybank is reportedly keen to obtain QFT status.

Abn Amro has gained customers through aggressive marketing of car loans and mortgages as well as unit trusts, or mutual funds, and insurance products.

Citibank and Abn Amro plan to implement the first shared ATM network among foreign banks here, the newspaper said. The qualifying full bank licences allow them to operate at up to 10 sites, five branches and the rest off-site ATMs.

"It's now a matter of making the systems compatible," Andrew Liew, Abn Amro's head of consumer banking, was quoted as saying.

The hookup with Citibank should be completed by the middle of the year.

Expanding privileges for overseas banks is under review.

Domestic banks have come under pressure to merge to compete with foreign banks as Singapore continues its liberalization of the sector, DPA said.