HSBC UK said the quality of its mortgage book remained strong, and the average loan-to-value on new lending was 65%, while the overall portfolio had an average loan-to-value of 53%
HSBC UK completed £23 billion in gross mortgage lending over 2023, a marginal decline on its total of £27.9 billion the year before.
The annual results from HSBC showed that, despite this drop in new loans lent, its mortgage market share increased from 7.7% to 8%.
This represented a net growth of £3.8 billion in its mortgage business.
HSBC UK said the quality of its mortgage book remained strong, and the average loan-to-value on new lending was 65%, while the overall portfolio had an average loan-to-value of 53%.
The bank said borrowers were still experiencing financial pressures, as the base rate remained high to bring down inflation. It said it would monitor the impact from this on borrowers facing higher monthly payments.
While HSBC UK’s mortgage portfolio was still “resilient”, it said, there was a marked rise in the level of stress among borrowers, “albeit from a low base”.
Overall, the lender’s loans and advances to customers rose by £7.7 billion, which it said was primarily due to a £4.1 billion growth in mortgage lending. Its mortgage book surpassed £129 billion at the end of the year.
For 2023, HSBC UK reported an 84% rise in its profit before tax to £6.67 billion, which included a £1.3 billion provision gain from its acquisition of Silicon Valley Bank.
It also saw its net interest income (NII) increase from £6.2 billion to £7.7 billion. Although the bank reported a higher NII because of interest rate hikes, it said this was partially offset by the competitive mortgage market and deposit pricing.
Its NIM rose from 1.89% in 2022 to 2.43% in 2023.
HSBC UK lowered its expected credit losses (ECLs) by £61 million to £421 million in 2023, due to “lower provisions for forward-looking economic uncertainty”.
