HSBA, NWG: Banking stocks in focus after BoE's interest rate hike

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HSBA, NWG: Banking stocks in focus after BoE's interest rate hike

 HSBA, NWG: Banking stocks in focus after BoE's interest rate hike
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Highlights

  • The Bank of England hiked the interest rates on Thursday by 0.25 percentage points, taking it to a 13-year high of 1.25%.
  • Several lenders had increased their mortgage rates ahead of the central bank's announcement.

Homeowners are bracing for additional pressure as their mortgages will rise after the latest interest rate hike by the Bank of England (BoE). The central bank on Thursday raised the benchmark borrowing rate by 0.25 percentage points, taking it to a 13-year high of 1.25%.

This comes as the standard variable rate mortgages are already at their peak in over 13 years. Following the BoE's hike, it could further rise by 0.25% as the two generally move in line.

Several lenders had increased their mortgage rates.

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Amid the anticipations of the rate hike, several lenders had raised their mortgage rates. According to reports, at least 10 lenders had announced the hikes during the day.

Let us take a look at two major lenders listed on the London Stock Exchange who raised their mortgage rates.

HSBC Holdings plc (LON: HSBA)

The largest bank in Europe raised its mortgage rates by up to 0.5 percentage points on Thursday, a much higher increase than the BoE rate. This is the third-rate revision in the past 10 days from the lender. As per a Telegraph report quoting an HSBC spokesman, the bank regularly reviews the mortgage rates after taking into account multiple factors. The spokesman clarified that the hike was not in anticipation of BoE's base rate decision.

Shares of HSBC closed at GBX 511.60 on Thursday, with a market cap of £102,741.43 million. The shares have provided a return of 16.79% to the shareholders over the past one year. The year-to-date returns stand at 14.03%.

NatWest Group plc (LON: NWG)

The Edinburgh-headquartered banking and financial services provider increased the majority of its fixed-rate mortgage offerings by up to 0.27 percentage points. For those interested in remortgaging, the company announced exclusive online-only deals. As per a spokesman quoted by The Telegraph, the lender reviews its proposition with time to ensure that is in line with the current market conditions.

NatWest Group has a market cap of £22,548.57 million at present and its shares closed at GBX 215.30 on 16 June 2022. The share value has appreciated by 4.77% over the last one year, while it has declined by around 5% on a year-to-date basis.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

Homeowners are bracing for additional pressure as their mortgages will rise after the latest interest rate hike by the Bank of England (BoE). The central bank on Thursday raised the benchmark borrowing rate by 0.25 percentage points, taking it to a 13-year high of 1.25%.

This comes as the standard variable rate mortgages are already at their peak in over 13 years. Following the BoE's hike, it could further rise by 0.25% as the two generally move in line.

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