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Lloyds posts £415m profit as mortgage lending rockets 40%

Lloyds Banking Group increased its gross mortgage lending by 40 per cent in 2013 and increase its market share to 21 per cent as it rebounded into profit.

In its annual results, published today, the bank revealed a huge increase from the £26.2bn lent in 2012 to £36.9bn last year.

Using Council of Mortgage Lenders annual figures of £145.2bn lending in 2012 and £176.3bn lending in 2013, Lloyds grew its market share from 18 per cent in 2012 to 21 per cent last year.

The bank made a £415m profit in 2013 marking a major turnaround from a £606m loss in 2012.

Lloyds says it lent £9.7bn to 80,000 first time buyers with a target of £10bn to 80,000 first time buyers in 2014.

Its average loan to value on new lending increased from 62.3 per cent in 2012 to 63.6 per cent last year. On buy-to-let its average LTV fell from 64.5 per cent to 64 per cent.

It also set out its total misselling provisions for 2013 with a £3bn provision for payment protection insurance misselling claims and £130m for interest rate swap misselling.

Rising house prices also helped also helped the bank also saw significant boosts to its mortgage book with borrowers in arrears of three months or more falling 11 per cent from £9.6bn to £8.8bn.

The number of mortgages on its books in negative equity fell from 11.7 per cent in 2012 to 5.2 per cent in 2013.

Bank bonuses increased by 8 per cent to £395m, compared to £365m last year, with chief executive Antonia Horta-Osorio taking home £1.7m in deferred shares.

Earlier this week Barclays increased its bonuses by 10 per cent to £2.4bn despite profits plunging by one-third in 2013.

Last September the Government started selling its 42 per cent stake in the bank to institutional investors with more sales expected this year.

Horta-Osorio says the bank will start paying dividends to shareholders in the second half of the year for the first time since the crisis.

He says: “Over the last three years we have reshaped, strengthened and simplified our business to create a low-risk efficient retail and commercial bank that is focused on our customers and on helping Britain prosper.

“These results confirm that the Group is returning to robust health, thanks to the commitment of our people and the consistent execution of the strategy we set out in June 2011. We have a strong business model and have made significant progress, despite our legacy issues, in improving our capital position and profitability in a sustainable way.”


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There is one comment at the moment, we would love to hear your opinion too.

  1. GP Styles (GPS Economics) 13th February 2014 at 9:53 am

    Despite the very positive headlines above… the mainstream mortgage book actually shrank in 2013. Total outstanding mainstream mortgages were £248.7bn in 2012 and now stand at £246.6bn. The only source of mortgage book growth was in BTL where the book rose by 6.5% to £52.8bn. Specialist lending continued to run off as expected.

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