Foreign banks lending on UK shores

by BN25 Aug 2009

While foreign banks fled Australian shores due to the GFC, they are returning to the UK due to reduced competition, according to reports.

A lack of capital, extremely cautious lending policies and reduced competition has seen Chinese, Israeli and Swedish banks start lending to borrowers in the UK.

Among the banks now offering competitive mortgage products are Israel's Bank Leumi (UK), Sweden's Handelsbanken and the world's third biggest bank, Bank of China.

The official cash rate in the UK is just 0.5% but mortgage rates vary from 4% to 7% a year.

Currently Bank Leumi is offering the lowest tracker rate (a mortgage that tracks the Bank of England rate changes) in the UK at just 2.52% while Bank of China's rate is 3%.

Do you think foreign banks will return to Australia? Send your thoughts to brokernews@keymedia.com.au or comment in the box below.

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COMMENTS

  • by marty 25/08/2009 10:43:01 AM

    hope so.

  • by christine 25/08/2009 2:39:46 PM

    I hope they do, we need the competition.

  • by brizbroker 25/08/2009 9:36:03 PM

    With all due respect Marty and Christine- there is already plenty of competition in the market, but no one uses it!