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- Move will enable bank to clear backlog of applications -
- Parent HSBC to make similar product available for non customers -

first direct is temporarily withdrawing its mortgages, including its two-year fixed rate offset mortgage (4.95%), from sale to non first direct customers with effect from 5pm on Tuesday 1 April 2008. (The bank will continue offering the product to existing first direct customers, regardless of whether they have a mortgage with the bank.) The move will enable first direct to focus its efforts entirely on processing the unprecedented number of applications for its home loans in recent weeks.

first direct will resume offering mortgages to non customers when the backlog has been cleared. In the meantime, the bank's parent, HSBC, will offer non customers a two-year fixed rate on similar terms to first direct's best buy product. The HSBC mortgage is priced at 4.99% (6.6% APR) with a fee of £1,499. It is available from HSBC branches and by phone on 0800 169 6333.

Chris Pilling, first direct´s chief executive said: “We've seen unprecedented demand for our mortgages since January thanks to our highly competitive pricing and the decision of other lenders to raise rates. As a result, we're currently seeing applications running at five times our normal volumes.

“first direct won its reputation for its amazing customer service and our first priority is to ensure we give all our customers the level of service they expect from us. The flood of interest in our mortgages has meant we're taking longer than we'd like to handle applications, especially from non customers. Rather than increase interest rates dramatically to discourage new applications, we've decided to withdraw temporarily from offering mortgages to non customers until we've cleared the backlog. I'd like to apologise to customers for any delays they may have experienced and give them my commitment that we'll not rest until we've restored first direct's normal standards of service.

We've made arrangements for our parent company, HSBC, to make available a similar two-year fixed rate to non customers to help them with their mortgage needs in the meantime.”

ENDS

For further information please contact Rob Skinner on 020 7992 1571 or email robskinner@hsbc.com.

Notes to editors

HSBC Holdings plc
first direct is a division of HSBC Bank plc. HSBC Holdings plc serves over 128 million customers worldwide through around 10,000 offices in 83 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of some US$2,354 billion at 31 December 2007, HSBC is one of the world’s largest banking and financial services organisations. HSBC is marketed worldwide as 'the world's local bank'.

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