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HSBC to Increase Rates on Savings Account and Mortgage in UK

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HSBC Holdings plc (HSBC - Free Report) is planning to raise interest rates on some savings accounts and variable rate mortgages it offers in England. This move follows the rate hike announced by the central bank in early August.

Per a spokesman, increase in rates is expected to be announced in September. The bank is going to raise the rate on its loyalty Individual Savings Accounts (ISA) product by 0.1%, while Help to Buy ISAs and saving accounts for children will witness rate hike of 0.25%.

Furthermore, interest rates on the company’s residential and buy to let standard variable rate (SVR) mortgages might rise 0.25%, to 4.19% and 5.25%, respectively.

Tracie Pearce, HSBC U.K.’s head of retail said, “HSBC’s mortgage rates remain some of the lowest on the market, including our Standard Variable Rate, maintaining our commitment to offer great value for all new and existing customers.”

HSBC is not the only bank to come up with mortgage interest rate hike decision, per an article by Mortgage Solutions. The Royal Bank of Scotland and Lloyds Banking Group (LYG - Free Report) have increased SVR by 0.25% to 4.24%. Also, Santander and Barclays have raised SVRs to 4.99% and 5.24%, respectively.

In June 2018, HSBC had disclosed its eight strategic priorities that might help drive its financials. While these initiatives might lend some respite to the bank, struggle with revenue slump owing to low interest rates and stringent regulatory requirements is likely to continue. Also, the company’s legacy business misconduct matters have resulted in several litigations and probes.

HSBC’s shares have lost 16.3% in the past six months compared with the industry’s fall of 15.9%.

Currently, HSBC carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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