By Ben Simmons
HSBC continues to grow market share in the UK, with total commercial bank lending up 5.8 % on 2010.
The bank's total new lending to UK businesses was £49.38bn exceeding its Merlin lending intention of £38.8bn, agreed with the UK Government. HSBC also issued gross new lending facilities of £11.9bn to Small and Medium-sized Enterprises (SMEs), in line with the 15 % annual increase in lending capacity the Government agreed with banks under Merlin.
HSBC in the UK highlights for full year 2011:
• £1,547 million in pre tax profits, an increase of 17.2 % on 2010
• New facilities advanced to UK businesses of £49.38bn.
• Gross new facilities advanced to SMEs of £11.94bn, 15% increase on 2010
• Gross mortgage advances of £13.2bn, up 12.2%, from £11.77bn in 2010
• New UK mortgage lending market share of 9.60% % up from 8.75% in 2010
• Lending to our Commercial Bank customers in the UK at record high
• Impairment provisions fell to £796m down 34.8% from £1,222m in 2010
• Income broadly level at £5,626 vs £5,667m in 2010
"Despite the ongoing challenging economic conditions, during 2011 HSBC used its unique international strength to lend record amounts to both UK businesses and individual customers, and critically our net lending to businesses grew against a backdrop of a shrinking market,” said Joe Garner, head of HSBC UK Retail Banking. “We remain fully committed to helping the UK economy continue to recover and we will continue to support our customers through the challenges ahead."
HSBC in the UK is a significant contributor to the banking group's overall profit, but as an indication to its global breadth, 90 % of the group's profit (before tax) is made outside of the UK. However, much of this profit is repatriated to UK shareholders via dividends. In 2011 HSBC paid a total dividend of £3.8bn, only two FTSE 100 companies paid more, and since the start of the financial crisis HSBC has been the FTSEs second highest dividend payer.
HSBC Group also pays a significant proportion of it UK profit in tax in the UK. HSBC paid US$1.5bn in UK taxes in 2011, equal to two thirds of profits made by its UK bank. The bank also supports UK businesses who are its suppliers, spending £1.7bn annually.
Even though HSBC significantly increased lending in 2011 to both retail and commercial customers, the bank's UK asset to deposit ratio remains at a conservative 83.3 %. HSBC is the only major UK bank with an asset to deposit ratio of less than 100 - thereby allowing us to continue to self fund our lending and consistently offer market leading products. Retail and commercial customer deposits increased 6 % during the year to support this ratio.
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