HSBC surpasses Barclays as fifth largest lender

Jake Carter

February 23, 2021

HSBC has surpassed Barclays as the fifth largest lender in the UK following its latest financial results.

Over 2020, HSBC completed £24bn of new mortgage lending, a 14% rise on 2019, which equated to a £3bn increase in monitory terms.

This is in contrast to the overall mortgage market, which reduced by 10%, equating to £241bn over 2020.

By the end of last year, HSBC had a 10.3% market share, up from 8.1% in 2019.

In addition, the bank noted that 60% of its lending was completed by advisers and its new originations had a 70% LTV on average.

The lenders mortgage book also rose in 2020, from £108.1bn to £110.7bn, year-on-year.

Breaking down its mortgage types, the bank has £19.4bn worth of interest-only mortgages, £3.3bn on its standard variable rate and a buy-to-let book of £2.8bn.

Looking to the Q4 2020, HSBC noted that 0.19% of mortgages were 90 days overdue, down from 0.23% in June.

Furthermore, despite the increase in new lending, the bank’s profit after tax was down 30% to £5.37bn.

Profit before tax was also down, having dropped 34% to £6.45bn in 2020.

As a result, the lender is reducing its office space by 40%, however, intends to keep its HQ.

Noel Quinn, group chief executive of HSBC, said: “The pandemic inevitably affected our 2020 financial performance.

“The shutdown of much of the global economy in the first half of the year caused a large rise in expected credit losses, and cuts in central bank interest rates reduced revenue in rate-sensitive business lines.

“We responded by accelerating the transformation of the group, further reducing our operating costs and moving our focus from interest rate sensitive business lines towards fee-generating businesses.

“Our expected credit losses stabilised in the second half of the year in line with the changed economic outlook, but the revenue environment remained muted.”

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