The lender also saw mortgage applications return to pre-lockdown levels by the end of June following a sharp dip after the introduction of lockdown and social distancing measures.
For the first time since opening to the broker market in 2016 more than half of HSBC’s mortgage lending was conducted through advisers.
The lender has been one of the few to continue offering mortgages at 90 per cent loan to value since the introduction of social distancing measures.
In presenting its interim results for January to June, the lender said it had “strong momentum” in the UK mortgage operation.
HSBC granted mortgage payment holidays to 65,000 customers during the pandemic, accounting for around 10 per cent of its UK mortgage borrowers.
The lender added it has around three per cent market share of all mortgage repayment holidays, compared to an overall mortgage market share of 6.9 per cent.
However, it has seen some increase in arrears with 0.23 per cent of its UK loans recorded as impaired by the end of June, a slight increase from the long-term average of 0.16 per cent.
Net interest margin in the UK fell 33 basis points to 1.68 per cent from 2.01 per cent and the end of March.
Profits down, loan losses up
Overall the bank reported a sharp fall in revenue and profits and revealed it will be accelerating the change programme announced in February that will include 35,000 job losses around the world.
First half performance was impacted by the Covid-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility.
Credit impairments from bad loans also increased by approximately £4.63bn ($5.7bn) to £5.61bn ($6.9bn).
And the lender warned these loan losses could increase to between £6.5bn ($8bn) and £10.6bn ($13bn) for the whole year, although the range was highly uncertain due to the volatile environment.
As a result, pre-tax profit was down 65 per cent to approximately £3.5bn ($4.3bn).
For personal lending customers, HSBC granted more than 700,000 payment holidays on loans, credit cards and mortgages, providing more than £22bn ($27bn) in customer relief in the first half of the year.
Diversity
In the results statement, group chief executive Noel Quinn pledged the bank would work to improve the diversity of its workforce.
In May, it launched a new global ethnicity inclusion programme to better enable careers and career progression for colleagues from ethnic minorities, and in July it made a series of commitments to address feedback from Black colleagues.
Quinn said the lender wanted to be “judged by our actions, not our words”.
“We will therefore provide more information about the ethnicity of our workforce in our annual reporting in February, so that our stakeholders can hold us accountable.”
Most demanding period
Quinn noted that this had been one of the most demanding periods he could remember but praised the efforts of the staff while juggling personal and professional priorities and adapting to new and unfamiliar ways of working.
“We maintained a high level of business continuity with 85 per cent of colleagues equipped to work from home, all of our customer contact centres fully operational, and between 70 per cent and 90 per cent of our branches open for business in the first half,” he said.
Quinn added: “Now that many governments have become better accustomed to managing the ebb and flow of the pandemic, we intend to accelerate implementation of the plans we announced in February.
“At the same time, our operating environment has changed significantly since the start of the year.”
