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Countrywide financial services arm launches cost-cutting review

Countrywide is launching a cost-cutting review in its financial services division after a weak mortgage market in the first half of 2012.

In its Q2 investor report, published last week, the firm reveals its financial services turnover remained static at £15.6m compared with the same period in 2011.

Earnings before interest, taxes, depreciation and amortisation fell 24 per cent from £2.7m in the first half of 2011 to £2m this year while operating profits fell 48 per cent from £1.3m to £688,000.

The number of mortgages arranged in Q2 rose slightly from 13,338 to 13,475 as did the value, growing from £1.6bn to £1.7bn.

However, the property giant says continued uncertainty in the banking sector has put pressure on mortgage volumes and significantly impacted the performance of financial services. It says there is both stricter lending criteria and higher pricing than six months ago.

Countrywide financial services director Nigel Stockton says: “While we expected modest lending growth in 2012 and invested in mortgage distribution in preparation for this growth, it is clear that mortgage volumes in 2012 are going to be even lower than 2011.

“We are focused on responding accordingly and all operational overheads are being reviewed as we focus on reducing costs in line with the reduced market.”

Coreco Group director Andrew Montlake says the mortgage market is tough and will continue to be so. He says: “It is very difficult once you get outside the M25 and a firm like Countrywide, which works all over the UK, is more exposed.”

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