The largest mortgage lender HBOS down 50 percent on profit

The last six months has seen a decrease in profits for HBOS of 50 percent, the group took a hit of £1.1 billion from investors affected by the credit crunch.

It’s been reported that the bank are considering “selective asset disposals” this is just a week after raising £4 billion from allowing investors to buy new shares. The group’s chief executive Andy Hornby didn’t give any clues as to which assets the group will sell, but it is rumoured that it could be the Irish and Australian operations which could be up for sale. The bank did say they would look at all sensible options.

The banks provisions to cover customers who get into difficult with their mortgage payments have risen by 36% to £1.3b. Although the banks shares are up 7% at 291p in early trading, this was the biggest gainer in the FTSE 100, The banks overall since the peak last year have lost more than 70% of their value.

HBOS forecasts a 9% fall in house prices in 2008. Lloyds TSB predicted a fall of 10-15% in house prices yesterday.

Halifax only has 7% share of net mortgage lending with Abbey as 35% and Lloyds at 24%, Halifax traditionally had 20% share holding.

To attract a greater proportion of house purchase applications than the market average but decreasing on the remortgage side of its lending, the bank has begun a strategy to support the housing market. As a result the business is more profitable that it has been for some time. And the groups are positive that it in 2009 it will get even better.

Source: Guardian

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