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HBOS sees net mortgage lending drop to 7%

HBOS has seen its net mortgage lending drop to 7 per cent in the first half of 2008 as it also reveals its profit after tax plummeted 56 per cent to £950m from £2,139m last year.

This comes after both Abbey and Lloyds TSB revealed a huge increase in their share of net mortgage lending for the first half of the year.

HBOS’s share of the net lending mortgage market dipped to 7 per cent in first half 2008, down from 22 per cent in the last six months of 2007. Its recent slump sees it return to the levels of the first half of 2007 after a new pricing strategy for retention business backfired.

The banking giant says it still has a 20 per cent share of the gross lending mortgage market.

Underlying profit before tax including negative fair value adjustments was down 51 per cent to £1,451m from £2,962m in the same period last year.

Mortgages in arrears for three months or more increased to 1.95 per cent, up from 1.67 per cent at the end of 2007.

In its specialist lending book of business, the number of mortgages in arrears increased to 3.27 per cent, up from 2.59 per cent at the end of 2007.

HBOS chief executive Andy Hornby says: “We remain cautious on the outlook for global wholesale funding markets and do not expect any significant reopening of securitisation markets in 2008 or the first half of 2009. Asset growth will therefore slow in the second half of 2008 and we expect to deliver lending growth for the group of mid single digits in 2008.”

“In light of the deteriorating economic environment, we expect to see upward pressure on impairment losses. Mortgage arrears are on a rising trend from historic lows but are supported by strong employment.”


The case in point

FSA director of enforcement Margaret Cole noted recently that if firms settling cases stated publicly they did so for commercial reasons, the FSA might rethink the settlement process, saying those behaving in this way are guilty of “sour grapes”.

Risk business

I find myself increasingly looking forward to my summer holiday, with a chance to recharge the batteries and get away from the credit crunch, the mortgage market, falling client valuations and turmoil in the markets. What a tough year we have had so far.

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