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Abbey profits jump to £235m in Q1

Abbey has seen profits jump by 17 per cent from £210m in 2007 quarter one to £235m in 2008.

In Santander’s Q1 results, the parent company revealed that Abbey’s gross mortgage lending increased by 18 per cent in Q1 2008 compared to the same time a year ago.

Abbey says it has estimated that its net lending share was 15.9 per cent in the Q1 this year compared to 4.9 per cent in Q1 2007.

It says that capital repayments were 6 per cent lower reflecting in part the impact of its improved retention strategy and the nature of the mortgage market.

Abbey says: “Since September 2006 we have been managing the profitability and margin of our mortgage business, carefully maintaining a balance between the profitability of new business, prudent lending criteria and our market share aspirations.

“We have not chased market share by writing unprofitable or higher risk business. This prudent strategy means we have been well placed to benefit from current market conditions. We have improved margins and our net lending share is above stock share.”
Abbey says its mortgage book was made up of almost entirely secured prime-residential lending therefore it has a stronger risk profile than other lenders.
It claims that only 3 per cent of new lending is above 90 per cent loan to value.
Abbey says it expects net mortgage lending to be £80bn in 2008 down from £108bn in 2007.


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