HSBC has offered a glimmer of hope to borrowers looking for a mortgage deal by promising to increase the amount it lends by 20 per cent in 2009.
While many other banks withdraw their mortgage
deals from the ever-shrinking market, HSBC
has thus far largely succeeded in weathering the current credit storm and has not experienced the same losses as its rivals.
As one of few high street banks which has not approached its investors for help, nor accepted it from the taxpayer in the form of the Government's £37billion bail-out package, ministers have welcomed HSBC's pledge to relieve pressure in the mortgage industry and help more people to secure a mortgage.
"Making money available for lending is one of the most important economic issues facing us today." said John McFall, Labour MP and chairman of the Treasury committee. "All the other banks need to follow this example."
The Government has been urging banks to increase the amount they lend, even threatening them with legislative action if they do not comply and act to reduce the effects of the economic downturn.
In his Treasury Committee opening statement last month, Bank of England Governor Mervyn King said that the most pressing issue "is to ensure that normal bank lending is resumed" to prevent the downturn in activity from becoming "protracted and extremely damaging" to the UK economy.
HSBC's promise will see it make £15billion of mortgages available to homeowners next year, twice as much as it lent this year. In light of its continued resistance to the credit crunch while its rivals flounder, HSBC has taken a 15 per cent share of the mortgage market this year, compared to its usual slice of just five or six per cent.
"We are punching above our weight", an HSBC spokesman told the Financial Times. Paul Thurston, HSBC’s UK managing director, said: "By some estimates, net mortgage lending in the UK will fall next year, but HSBC has no intention of closing its doors to customers, nor will we compromise our reputation for responsible lending."
The bank is also one of few to have already passed on the entire one per cut in the base rate, announced by the Bank of England
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