HSBC share price: Group to lend extra £35bn to UK home buyers

By: Tsveta van Son
Tsveta van Son
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree… read more.
on Sep 2, 2019
Updated: Mar 11, 2020

HSBC Holdings’ (LON:HSBA) UK unit is planning to lend an extra £35 billion to homeowners, the Financial Times has reported. The news comes with the Asia-focused lender continuing with its push into British mortgages.

HSBC’s share price has advanced in London this Monday, having gained 0.80 percent to 596.15p as of 14:38 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 1.24 percent higher at 7,296.30 points. The lender’s shares have given up nearly 11 percent of their value over the past year, as compared with about a 1.8-percent fall in the Footsie.

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HSBC continues with mortgages push

The FT reported today that HSBC’s UK chief executive Ian Stewart had said that the bank intended to continue expanding its mortgage book so that its overall share of the market increases from roughly seven percent to 10 percent.

“I think our natural share’s about 11 percent, but I don’t look out too far,” he told the newspaper. We’re about £100 billion today, so getting up to £135 billion […] seems sensible to me.”

The FT notes that while HSBC has traditionally lagged behind competitors in the UK mortgage market, it has expanded its share since the introduction of legislation in 2014 which forced British lenders to ‘ringfence’ their operations in the country, separating them from riskier investment banking.

Today’s update comes after news emerged that HSBC was planning to offer rebates and lower fees for small and medium-sized firms in Hong Kong.

Analysts on Asia-focused lender

Royal Bank of Canada, which rates the FTSE 100 lender as an ‘underperform,’ lowered its target on the HSBC share price from 600p to 580p last week. According to MarketBeat, Europe’s biggest bank currently has a consensus ‘hold’ rating and an average valuation of 657.93p.

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