Brokers fume as HSBC claims its growth is due to cutting them out
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HSBC has angered brokers by attributing its growth in the mortgage market to its limited exposure to the buy-to-let market and brokered mortgages.
In its interim management statement issued last week, the lender says: “In the UK, although unemployment rose and the economy contracted the impact was moderated by continuing low interest rates and quantitative easing measures, together with decisions we implemented in 2006 and 2007 to restrict increases in our unsecured lending.
“Mortgage lending continued to perform well, benefiting from our very limited exposure to buy-to-let and brokered mortgages.”
HSBC grew its share of the market to 9.9% in Q3 2009 from a 9.5% share of new mortgages in June and 4.5% in June 2008.
The bank says it is on track to meet its £15bn lending pledge for new mortgages in 2009, double the amount it advanced in 2007.
The average LTV of HSBC’s business for the year to date has remained below 60%.
Matthew Platt, principal at MLP Financial, says: “What on earth does the fact that HSBC has no broker involvement have to do with it growing its market share?
“Surely if it indulged in broker deals its share would be even higher. If brokers are as bad as some lenders would have us believe, why does HSBC recommend clients who don’t meet its underwriting criteria to John Charcol?”
And another broker, who wishes to remain anonymous, says: “HSBC is at it again. The significance of no broker involvement is that it gives the lender the chance to sell add-ons such as life and critical illness at uncompetitive rates.”
Michael Geoghegan, group chief executive of HSBC, has warned that the regulator should tread carefully when telling banks to hold more capital before the economy has had a chance to recover properly.
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