HBOS yesterday brushed off concerns about the credit squeeze as it wrote down £180m on its investments because of the market turmoil. Financial Times
The UK’s fourth-largest bank said it expected to meet full-year earnings estimates but that its cost of funding would be £60m higher, which would hit its retail banking earnings. HBOS shares fell 68.5p to 764.5p.
Andy Hornby, chief executive, said higher costs would eventually be offset by higher prices, which the bank is reflecting in mortgages. HBOS has been pushing through price increases of up to 35-40 basis points in areas such as buy-to-let loans.
The bank, which saw net new mortgage lending fall to 8 per cent in the first half because of a bungled strategy, said net new lending rose to 17-18% in the second half.
The £180m writedown at HBOS, which operates the Halifax and Bank of Scotland, is far less than those at rivals such as Barclays, which wrote down £1.3bn.