The UK’s disastrous mini-Budget in September led to fears at HSBC Holdings Plc that tens of thousands of its customers could be forced on to mortgage products with an interest rate of 7%, according to the CEO of the bank’s British retail business.
(Bloomberg) — The UK’s disastrous mini-Budget in September led to fears at HSBC Holdings Plc that tens of thousands of its customers could be forced on to mortgage products with an interest rate of 7%, according to the CEO of the bank’s British retail business.
“It was a very, very difficult time,” said Ian Stuart, chief executive officer of HSBC UK. “Myself and my team were looking at 60,000 customers in December who were going to be impacted by an increase in mortgages.”
Stuart said that this situation was narrowly avoided after bond markets calmed down in the weeks following the meltdown caused by the short-lived premiership of Liz Truss. HSBC is currently offering a 3.99% five-year fixed rate mortgage.
The executive was giving evidence to UK lawmakers alongside the leaders of Britain’s other major high-street banks. Alison Rose — the CEO of NatWest Group Plc, who had initially resisted attending the panel — said the lender wasn’t seeing any signs of distress among its mortgage customers.
That echoed comments from the other lenders although Stuart cautioned that headwinds lie ahead.
“We’ve got 222,000 customers this year who will change their mortgage,” Stuart said. “The vast majority of those customers are going to see some increase in pricing.”
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