Mortgage lending rose by $9bn in the UK, its largest mortgage market, ahead of Hong Kong, Singapore and Australia, the firm’s next largest home loan regions, according to the global lender’s annual report.
But it adds that mortgage yields “rose more modestly last year due to competitive pressures and market factors in the UK and Hong Kong”.
The report says: “Europe, including the UK, face challenges from higher energy prices fuelling inflation and necessitating higher interest rates, driven in part by the Russia-Ukraine war.”
It adds the quality of its UK mortgage book “remained strong”, with the average loan-to-value ratio on new lending in the UK at 67% in the period, compared with an estimated 50% for the overall mortgage portfolio.
During 2022 the bank allowed UK mortgage customers coming to the end of an existing fixed-rate loan to secure a new rate earlier as part of its help with the cost-of-living crisis.
Last year, the lender incorporated climate considerations into its UK mortgage originations
It says: “Our UK team is also proactively supporting customers by providing information on our public website relating to how physical risk and home energy efficiency ratings may impact their mortgage applications.
“This gives customers more insight when considering purchasing a property that may be susceptible to physical climate risk or which may not be energy efficient.”
HSBC UK posted $5bn of adjusted profit before tax last year.
The global bank posted credit loss provisions of $3.6bn last year, compared with the release of $900m from its cash cushion the year before, partly to cover potential losses in mainland China’s troubled commercial real estate sector.
It also booked a $2.4bn impairment charge relating to the planned sale of its retail banking operations in France.
The group has agreed to sell its Canadian business and is expected to dispose of its Russia arm as well as its consumer unit in Greece, as it focuses on Asia.
HSBC group chief executive Noel Quinn said: “We have transformed our cost base and restored tight cost discipline across the organisation.”
He added: “Overall, 2022 was another good year for HSBC. We completed the first phase of our transformation and our international connectivity is now underpinned by good, broad-based profit generation around the world.”
