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HSBC credits broker expansion with £3bn H1 lending boost

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  • 06/08/2018
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HSBC credits broker expansion with £3bn H1 lending boost
HSBC grew gross mortgage lending by around £3.18bn ($4.2bn) to hit £9bn in the first half of the year, with brokers originating 27% of this activity – up from 21% in 2017.

 

In its interim results, HSBC noted that this was driven by stronger acquisition performance, including the expanded use of broker relationships.

The bank has made it a strategic goal to grow its UK mortgage market share significantly by 2020.

The lender has been focused on expansion into the broker market over the last two years, moving from 43% of coverage in 2016 to 79% coverage at present.

HSBC’s lending growth in the first six months of the year continued its development from 2017, which saw it increase lending totals by £2.6bn to reach £18.2bn, according to data from UK Finance.

Mortgage book breakdown

HSBC also published a breakdown of its current £88.6bn ($117bn) mortgage book, which forms 12% of the bank’s global lending operation.

Almost two thirds (63%) of its UK mortgage book is on fixed-rate deals, with the remaining 37% on variable deals.

Buy-to-let mortgages make-up around 3% of its lending book at £2.8bn, while mortgages on a standard variable rate (SVR) total slightly more at £3.7bn.

Interest-only mortgages form almost a quarter of the book at £20.6bn.

Overall the lender’s portfolio loan to value (LTV) average is 49%, with 52% of loans at less than 50% LTV. However, its new originations have an average LTV of 63%.

And around 28% of the mortgage book is in Greater London.

HSBC added that quality of its UK mortgage book “remained high, with negligible defaults and impairment allowances”.

 

Market share growth

In June, HSBC group chief executive John Flint published eight strategic goals for the bank to lead it into 2020.

The second of these focused on its UK operation to: Complete the establishment of a UK ring-fenced bank, increase its mortgage market share, grow its commercial customer base, and improve customer service.

Only July 1 the UK ring-fenced bank HSBC UK Bank plc commenced business, six months ahead of the legal deadline.

Overall, reported profit before tax was $10.7bn, 5% higher than the same period last year, while adjusted profit before tax of $12.1bn was 2% lower, as revenue growth and lower expected credit losses were partly offset by higher operating expenses, the bank reported.

Flint added: “We are taking firm steps to deliver the strategy we outlined in June.

“Today’s results, which are in line with our expectations, show strong revenue growth in our global businesses. This is creating room to invest while maintaining our commitment to full-year

positive adjusted jaws.

“We are investing to win new customers, increase our market share, and lay the foundations for consistent growth in profits and returns.”

 

 

 

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