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HSBC takes the UK mortgage market by storm

Despite the woes of the UK property market it appears as though UK banking giant HSBC has benefited from the troubles many competitors are experiencing. The company has almost trebled its share of the UK mortgage market from 2.4% in 2007 to 7% in 2008. The group has been very proactive over the last 12 months with regards to the significant number of customers coming off cheaper fixed mortgage agreements and instigated a link which became known as the "rate matcher" which effectively offered similar terms to those which had just ended.

HSBC estimates that an additional £5.4 billion of business was generated by this new "rate matcher" with confirmation that over £100 million of mortgages were agreed each day in April 2008. The fact that the group has been able to pin down UK householders on to longer term mortgage agreements should ensure that they at least retain a substantial percentage of their new market share as when the UK economy pulls out of the recession.

However, even though HSBC has traditionally targeted low risk mortgage customers it has still not been able to escape the ongoing demise of many homeowners and corporate clients. The recent £12.5 billion fund raising will be used to shore up the bank's financial ratios and cover what has become a very difficult period for the company's US operations.

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