WELLINGTON/HONG KONG, Feb 15 New Zealand's state-owned Kiwibank Ltd said on Thursday it w

WELLINGTON/HONG KONG, Feb 15 (Reuters) New Zealand's state-owned Kiwibank Ltd said on Thursday it would acquire the AMP-originated residential mortgage book of HSBC Ltd. and provide mortgage finance to AMP customers.

The mortgages, which HSBC , Europe's biggest bank, originally acquired from AMP , were valued at around NZ$720 million ($500 million) and were expected to be sold at a slight premium to the book value, HSBC said in a statement.

The mortgages, which number around 5,900, would be managed under the AMP brand and Kiwibank had agreed with the Australian-based insurer and fund manager to provide home loans to any customers it referred.

Kiwibank Chief Executive Sam Knowles said the acquisition would boost Kiwibank's mortgage portfolio to more than NZ$4 billion.

''Kiwibank is currently evaluating its capital funding requirements for the transaction, including the potential to access the domestic debt capital markets,'' he said in a statement.

HSBC said it would keep the majority of its New Zealand home loan portfolio, worth around NZ$1.6 billion.

Kiwibank, a subsidiary of the state postal operator NZ Post, was established in 2002 as a low-cost totally New Zealand-owned competitor to the main retail banks, all of which are Australian owned.

Last March, Kiwibank took a 51 percent stake in mortgage lender NZ Home Loan Company Ltd. as it expanded its distribution network.

($1=NZ$1.45) REUTERS PV DS1550