by Mark Johnston
This week banking giant HSBC has announced £7 billion in profits in the first half of 2010, that’s £445 of profits every second, twenty four hours a day seven days a week. That said, less than 10% of that is made in the UK and much is down to loan impairment being well under predicted levels.CEO Michael Geoghegan said the profits reflected “more stable economic conditions for many of our customers”.
The headline profits has meant that HSBC plan to pay £1.8bn in dividends to shareholders, but Geoghegan stressed they were “very much open for business” and had increased lending to small firms.
He said: “People must have confidence to borrow. There is still far more interest in repaying debt than there is in taking on more debt.”
He went on to comment “We have weathered the storms in different regions and in different sectors precisely because our business is large, broad and diverse. In our view the financial system needs banks which are ‘big enough to cope’ with the worldwide needs of our 100 million customers.”
When HSBC say they are open for business they really seem to mean it. For those looking for longer term security in their monthly mortgage payments, the bank have launched a new five year fixed rate deal.
The new product is being offered to new and existing customers and is offering its lowest ever long term mortgage rate at 3.95% with a loan to value (LTV) of 60%. The product comes with a booking fee of £599.
Other new offers include the banks new tracker mortgage which tracks 1.69% above the Bank of England base rate which is currently 0.5% which means its currentlly 2.19%.
HSBC’s head of mortgages Martijn van der Heijden said that he believed both products “offered the best of both worlds” in terms of giving customers security and flexibility.
A recent study by HSBC has shown that following the recession, the mortgage market is dominated by best deals from direct lenders such as HSBC. The bank’s research also showed that there is a large disparity between lenders early redemption charges.
The study looked at products throughout the UK mortgage market and found that differences could be up to £6,000 based on a standard £150,000 mortgage deal.
The findings were a boost to HSBC as the research showed that they charged the least in early redemption charges of this type. Nationwide suffered at the other end of the scale as the study showed they charged a fee of £7590 on the standard £150,000 mortgage.
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