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HSBC UK completes £13bn gross mortgage lending in H1 2022

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  • 01/08/2022
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HSBC UK completes £13bn gross mortgage lending in H1 2022
HSBC UK completes £13.4bn gross mortgage lending in H1 2022.

HSBC said it continued its “strong growth momentum in mortgages” and over the period its market share increased to 7.6 per cent, up from 7.4 per cent, according to Bank of England data. 

For the year to date, its gross new mortgage lending covered 8.9 per cent of the market. 

The UK bank maintained a stable liquidity position although this reduced to 228 per cent, owing to growth in retail mortgages, commercial lending and the impact of foreign exchange movements. 

 

Mortgage borrower profile

It said the quality of its mortgage book was high with low levels of impairment allowances. Mortgage delinquencies were slightly higher than pre-pandemic levels at a ratio of 0.18 per cent, however, which it said was due to the forbearance offered to borrowers during the health crisis. 

The average loan to value (LTV) ratio on new mortgage lending in the UK was 67 per cent, compared with an estimated 49 per cent for the overall mortgage portfolio. 

Of its £122.5bn mortgage balance, £2.5bn is on a standard variable rate (SVR) while £18.8bn are interest-only. Today, the bank announced it was raising its residential mortgage SVR from 4.29 per cent to 4.54 per cent. There will be no change to its buy-to-let SVR. 

All of HSBC’s regions were profitable in the first half of the year, the group said, including a “strong performance” from its UK business which posted pre-tax profits of £1.8bn up 14 per cent from £1.5bn last year. 

It said it benefitted global interest rate rises on revenue and strong cost discipline. Its net interest margin rose nine basis points to 1.3 per cent and it said it expected the base rate to reach 2.75 per cent by the end of 2022. Its net interest income increased by £460m or 20 per cent.

Overall, the group delivered $9.2bn (£7.5bn) of reported profit before tax, down from $10.8bn (£8.1bn) the year before. 

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