View more on these topics

HBOS ups market share to 22 per cent

HBOS has seen its net share of lending in the mortgage market increase to 22 per cent for 2007, following a dismal start to the first half of the year.

The lender had previously reported a disappointing 8 per cent share of the market for the first half of 2007 after a failed retention strategy.

Its market share was 21.2 per cent in 2006.

The Group has since announced it will no longer set half yearly or annual net lending targets and will favour profitable growth over market share.

HBOS announced in its full year results today that profit before tax was down 4 per cent to £5,474m in 2007, from £5,706m in 2006.

The Group’s net interest margin fell by 9 bps to 1.63 per cent. It says that the main driver of this reduction was in the retail section where margins fell 12 bps reflecting the competitive pressure on mortgages in the first half and the increased costs of wholesale funding in the second half.

In retail, HBOS says that secured impairment losses were only £28m, down from £108m in 2006. Retail unsecured impairment losses in the second half were lower than in the first half at £576m, compare to £690m in the first half of 2007.

HBOS says that the current turmoil in global financial markets continues to cause “considerable uncertainty” into the plans of all financial institutions.

It says: “We are planning on the assumptions that market conditions will remain uncertain throughout 2008.”

HBOS says that in retail it will continue to favour profitable growth over market share.

It says: “Over the last five months we have seen mortgage prices adjust in the light of increased funding costs. Our strong multi-brand savings franchise has been to the fore in 2007 and we expect to see strong deposit growth in 2008, despite an expected increase in competition for retail funds.

HBOS says that during the dislocation in financial markets in the latter part of 2007, customer deposit growth and the supply of wholesale funding to HBOS remained strong.

It says that in recent years, prior to the dislocation, it had lengthened the maturity profile of our wholesale funding, whilst at the same time diversifying the types and sources of funding.

HBOS says: “This has been at some cost to margins during this period but has given us the necessary flexibility to operate in these challenging markets. We will continue to ensure that we maintain an appropriate liquidity profile consistent with our planned business growth.”

Chief executive Andy Hornby says: ‘In 2007, the disciplined execution of our strategy has resulted in good earnings growth for our shareholders despite difficult market conditions. With our multi-brand distribution strength, strong balance sheet and low cost operating platforms, we are well placed to take opportunities presented by these difficult markets and deliver good growth in shareholder value over the next few years.’

Recommended

Adviser’s Standard protest

An adviser has withdrawn all his business from Standard Life after accusing the provider of trying to poach clients through direct mailings.Clifton Business Consultancy principal director Glyn Hazell says Standard is trying to grab IFA clients through marketing literature offering them the opportunity to go direct in general product and life cover mailings. He says […]

MI set to branch out along the third way

Merchant Investors is considering bringing out a third-way annuity product to compete with existing providers.The Hartford, MetLife and Lincoln Financial have all launched third-way annuities but some industry commentators have criticised them for being expensive and not transparent on charges.Merchant Investors head of sales and marketing Richard Ellis says he can see an opportunity to […]

Abe and Modi

Investment ideas to power returns

We believe the most exciting stockmarket opportunities today are in those places where a new generation of leaders are successfully transforming economies and companies in favour of investors. In a new investment guide and website, which is suitable for use with your clients, we set out our views on these reformers. Click here to find […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com