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HSBC mortgage market share rises as bank axes 35,000 jobs

  • 18/02/2020
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HSBC mortgage market share rises as bank axes 35,000 jobs
HSBC claimed a 6.8 per cent share of the UK mortgage market in 2019, up from 6.6 per cent in 2018, according to the lender’s annual results.


However, HSBC has not published a full figure for its gross mortgage lending for the last year, which reached £22.1bn in 2018.

It’s third quarter update showed a dip in lending volumes from £16bn in the first nine months of 2018 to £15bn during the same period last year.

The bank noted that its overall mortgage book grew by around £6.86bn (US $9bn) during the year.


Global job cuts

However, the results were largely overshadowed by the bank revealing it will be cutting around 35,000 jobs from its global workforce of around 235,000.

The restructuring had been foreshadowed in the groups third quarter results, but the scale of the cuts surprised many analysts and it appears the US and European investment banking divisions are likely to be the biggest targets.

Overall pre-tax profits for the year fell by 33 per cent to £10.14bn (US$13.3bn), but this was largely down to a one-off goodwill impairment of £5.57bn (US$7.3bn) and a £762m (US$1.0bn) UK bank levy charge.

HSBC interim group chief executive Noel Quinn said: “The group’s 2019 performance was resilient, however parts of our business are not delivering acceptable returns.

“We are therefore outlining a revised plan to increase returns for investors, create the capacity for future investment, and build a platform for sustainable growth. We have already begun to implement this plan, which my management team and I are committed to executing at pace.”


UK mortgages

As far as the UK mortgage market, the lender suffered from the continued intense competition with its net interest margin (NIM) falling from 2.21 per cent in Q1 to 1.95 per cent in Q4.

It noted that simplifying its mortgage process resulted in 75 per cent of successful applications receiving an offer within 10 days, which was an improvement from 48 per cent in 2018.

And it credited its expanded broker distribution for growing the mortgage book.

It cited negligible defaults and impairments with an average loan to value on new lending in the UK of 67 per cent, compared with an around 51 per cent for the whole mortgage portfolio.

HSBC also has £11bn (US$14.6bn) of UK interest-only loans with an average LTV of 42 per cent, while 99 per cent of these interest-only mortgages had an LTV of 75 per cent or less.

Of the interest-only mortgages that expired in 2017, 86 per cent were repaid within 12 months of expiry with a total of 95 per cent being repaid within 24 months of expiry.

For interest-only mortgages expiring during 2018, 91 per cent were fully repaid within 12 months of expiry.


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