Banking News Abbey To Knock Halifax Off Top Mortgage Spot 1975
Abbey to knock Halifax off top mortgage spot
28 July 2008 / by Rachael Stiles
HBOS-owned Halifax has been a long-serving leader of the mortgage market, but results released tomorrow will reportedly see Spanish-owned Abbey overtake the current defender.
While many of its rivals toil with writedowns from the US subprime mortgage crash, Abbey says that it had “little or no exposure” to the toxic mortgage-backed investments which contributed to the global credit crunch.
Unlike other mortgage providers, which have seen a reduction in profits and lending, Abbey managed to treble its share of the mortgage market to 15.9 per cent in the first quarter of 2008, compared to just 4.9 per cent for the same period last year.
Profits are expected to rise to £4.87billion for Abbey, up from £3.58billion in the same period in 2007, while Halifax is predicted to announce a 50 per cent reduction in profits to £1.3billion.
This will come as a further blow to Halifax which has just carried out a rights issue and been left with stock after existing shareholders bought just nine per cent of the shares on offer. A rise in repossessions and bad debts are also expected to hit Halifax and other banks hard.
Shares in HBOS did, however, rise sharply last week amid rumours that the banking group was going to be broken up, led by US bank JP Morgan.
© Fair Investment Company Ltd