Halifax Loses Top Lending Spot To Abbey
Halifax has lost its top mortgage lending spot to Abbey for the first six months of 2008. Abbey grew its share from its traditional 10% to 15.9% in quarter one, and 35% in quarter two. It has taken advantage of other lenders backing off from the market. The profits of Abbey’s owners Santander are also on the increase.
Halifax has lost its place at the top of the UK’s mortgage lenders to Abbey which has taken more than a quarter of home loan business in the first six months of 2008.
Now owned by Spanish banking giants Santander, Abbey lent 25.6% of all UK mortgages from January to June as Halifax grappled with its problems in the midst of the credit crunch.
Abbey’s leap to prominence looks even more significant when viewing the quarterly figures: in the first quarter it took 15.9% of mortgage business, but this jumped to 35% in the second quarter. Traditionally Abbey has accounted for around 10% of the market.
Abbey’s chief executive Antonio Horta-Osorio said it was taking a different approach from other lenders by increasing mortgage lending to low-risk customers, while other lenders were withdrawing from the market. However, he noted that Abbey was unlikely to sustain such a rate of lending as others returned to the market in the second half of the year.
Abbey also reported a 20% increase in profits for the first six months, up to £485m. Santander is also set to buy Alliance & Leicester in the UK. The Spanish bank’s profits are up to £4.87bn in the first half of the year, compared with £3.58bn in the first half of 2007.
Santander’s success compares markedly with banks in the UK, which have all shown falling profits. This year will be the first that the listed banking sector has seen a fall in profits since the last major recession in 1992. The downward trend is expected to carry on for two more years.
Many UK investors will be delighted with the success of Santander in the UK. When it took over Abbey in 2004, Santander became one of the largest owned shares in the UK. Santander shares are owned by about 1.2m. There are 1.5m BT shareholders and 2.1m HBoS shareholders.
