Shares in HBOS, the group formed by the merger of Bank of Scotland and Halifax, have dropped 2% today after the company announced it would miss profitability targets as it cuts back on mortgage lending.
The company predicts its market share will slip as it tightens up lending criteria in the wake of interest rate increases that have taken the Bank of England’s base rate to 4.5%.
HBOS, which is involved in nearly a quarter of outstanding UK mortgages, admits it will probably not meet its corporate goal of 20% annual return on equity.
The statements have come in a pre-close briefing – a close period being a regulatory requirement not to communicate company financial matters with investors - held before the company releases results for the six-month period ending 30 June.
HBOS shares were down 12p to 689.5p at 12.50PM today.IFAonline
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