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HSBC stops lending to new investors

A foreign-owned bank has decided to limit its investor loans to existing customers.

Graham Heunis, head of retail banking and wealth management for HSBC in Australia, said the bank has put “a number of measures in place to address the needs of our customers and adhere to our regulatory responsibilities.”

“These mechanisms include limiting investor home loans to existing customers only, as well as providing owner occupier customers with a highly competitive variable rate,” Mr Heunis told Mortgage Business.

HSBC Bank Australia Limited is one of the only banks in the country to hold more investor loans than owner-occupied loans.

According to the latest APRA banking statistics, released yesterday, HSBC holds $5.2 billion of investor home loans as at 31 August this year, compared to an owner-occupied book valued at $4.2 billion.

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From August 2014 to August 2015, the bank’s investor loan book grew by 10.3 per cent, while its owner-occupied loans grew by 5.6 per cent over the same period.

The news comes after AMP Bank announced in July that it would no longer accept new or assess existing investor home loan applications. The decision was made in response to APRA’s crackdown on investor lending and is expected to last until later this year, depending on market conditions.

All AMP Bank investor loans that had been approved were subject to a 47 basis-point increase on settlement.

“We appreciate the position this puts our customers in and will be working with our distribution network to actively communicate with them,” AMP Bank managing director Michael Lawrence said at the time.

“Australia’s property market is experiencing high levels of investor property lending growth, and we are supportive of the regulator’s intention to slow this growth to appropriate levels.”

While AMP’s exit affects mortgage brokers and their clients, HSBC’s decision will not as the bank does not distribute through the third-party channel.

HSBC exited the third-party channel in 2006 after selling its broker-originated loan book to Firstmac, which at the time consisted of over 10,000 customer accounts worth $2.26 billion.

Last year the bank confirmed to Mortgage Business that it does not plan on re-entering the broker channel.

HSBC stops lending to new investors
mortgagebusiness

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