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HSBC attempts market land grab with £35bn war chest

by: Mark Banham
  • 02/09/2019
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HSBC attempts market land grab with £35bn war chest
HSBC is to make a high profile land grab in the mortgage sector investing an extra £35bn designed to increase its market share by three per cent, as mortgage approvals hit a two-year high according to the latest figures from the Bank of England (BoE).


In an interview with the Financial Times, HSBC UK chief executive Ian Stuart said he thought the bank’s plans were realistic.

“I think our natural share is about 11 per cent, but I don’t look out too far. We’re about £100bn today, so getting up to £135bn - seems sensible to me,” he said adding that the finance house’s current share stood at seven per cent, but that he was looking to increase that to more than 10 per cent.

Ben Kehoe, mortgage and protection specialist at independent financial advisers Equanimity, said: “I think its really a case of the more lenders and the more financing the better, as it’s going to help drive down rates and make the market competitive.

“It’s interesting timing though, what with the market as it currently is with a lot of people putting that house purchase on hold until we figure out how things will work out [for the UK]. Maybe HSBC knows something or maybe they’re trying to establish themselves more before – or if – Brexit happens, we’ll have to see.”

Anthony Rose, director at LDNfinance, added: “It is great to see HSBC increasing their support for the UK mortgage market as they become a very significant player in the intermediary space.

“The widening of their intermediary distribution, and plans around buy to let, require extra funding if they want to remain as competitively priced as they have been, so this is a real statement of intent.

“Hopefully it will lead towards other lenders who wish to maintain or expand their market share either increasing their own funding lines or increasing their competitiveness in other ways. This is definitely a move to be welcomed in the current financial climate.”

Last month HSBC UK said it had completed £9bn of mortgage lending in the first half of 2019 – the same volume it had achieved during the first half of last year.

Broker originations leaped to 44 per cent of completions, rising from 27 per cent in the same period the previous year.

HSBC is the smallest of the big six in the mortgage lending market compared to big fish Lloyds Banking Group that currently takes a 20 per cent share, headline-grabber Nationwide that boasts a 13 per cent share and Spanish bank Santander that has expanded its presence to take just over 11 per cent of the mortgage landscape, according to recent figures from financial services trade body UK Finance.


UK lending figures

Last week the BoE announced that the mortgage approvals for house purchase had hit a two-year high in July.

The figures showed there were 67,306 mortgage approvals for house purchase last month, up 1.2 per cent on a monthly basis and the highest level since July 2017.

Approvals were also above the six-month average of 65,661.

The BoE did, however, sound a note of caution, and stated that the figures were the “strongest since July 2017, but [remained] within the very narrow range seen over the past two years.”

Recent figures from UK Finance also echo those from the BoE. The trade body said that gross mortgage lending in the UK in July was 2.9 per cent higher than the equivalent month in 2018 and the highest since March 2016.

This reached a total monetary figure of £26.1bn and there were 95,126 mortgages approved by the main high street banks in July 2019, the highest monthly total since July 2009, when the total was 99,970, according to UK Finance.


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