Two FTSE-listed lenders to check out in November

October 27, 2022 05:30 PM AEDT | By Abhishek Sharma

Two FTSE-listed lenders to check out in November — Image source: © Cammeraydave | Megapixl.com

Highlights:

Mortgage rates have shown signs of reduction following Rishi Sunak's coronation as UK PM.

The rates saw a steep rise since the previous chancellor Kwasi Kwarteng's mini-budget in September.

Just a day after Rishi Sunak took over as the new prime minister of the UK, mortgage rates have started to fall.

Sunak's appointment is expected to calm the country's financial markets, which were sent into a tizzy after previous chancellor Kwasi Kwarteng's tax-cutting bonanza in the mini-budget. Kwarteng had announced tax cuts worth £45 billion, but the government later took a U-turn, reducing it to £43 billion.

This sparked concerns that the government's debt to fund these tax cuts would rise, forcing the Bank of England to opt for bigger interest rate hikes. Anticipating these hikes, several lenders have been raising their mortgage rates.

Image source: © Lekjorruang | Megapixl.com

However, after Rishi Sunak became the PM, the mortgage rates have begun falling. As per analyst Moneyfacts, the average two-year fixed mortgage deal is now 6.5%, down from 6.54% on Tuesday. This rate stood at 6.65% last week, before Liz Truss' resignation as the PM.

With money markets welcoming Truss' resignation, rates started to fall on Friday, with the two-year fixed deal dropping to 6.55% from 6.65%.

Meanwhile, the fixed-rate deals have dropped to 6.36% overnight. The fixed-rate was at 6.51% before Truss' resignation announcement.

According to reports, the lenders that cut their rates in the past 24 hours are Santander and Yorkshire Building Society's Accord Mortgages brand.

Notably, the rates have steeply risen since the mini-budget on 23 September.

Kalkine Media® deeps dive into a few mortgage stocks on the London Stock Exchange.

HSBC Holdings Plc (LON: HSBA)

The global banking and financial services provider reported pre-tax profits of $700 million more than analysts' expectations for the year's third quarter. Its net interest income soared by a third to $8.6 billion during the period. With a market cap of £88,389.56 million, the lender had an EPS (Earnings per Share) of 0.62 as of 26 October. The 52-week return stands at -0.47%, while the year-to-date or YTD return is presently at -1.72%. As of 1:30 pm GMT+1, the shares were trading at GBX 440.85, down 0.41%.

Barclays Plc (LON: BARC)

The multinational lender reported a 6% rise in pre-tax profits for the three months to September. Its net interest income rose by almost 60% to £3 billion during the period, aided by the jump in borrowing costs. Barclays' market cap stands at £23,814.12 million, with an EPS of 0.38 as of 26 October. Its share value has depreciated by over 25% over the past 52 weeks, while the YTD return is -20.49%. BARC shares were trading at GBX 148.80, down 0.95% as of 1:58 pm GMT+1 on Wednesday.

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.

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