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Lloyds to shrink its share of the mortgage market

Lloyds Banking Group is planning to cut its share of the mortgage market from 28 per cent to 25 per cent.

In a call with analysts to discuss the company’s first quarter results last week, LBG chief executive Antonio Horta-Osario pledged to increase the bank’s share of the retail deposit market and reduce its share of the mortgage market.

Horta-Osario aims to align Lloyds’ share of the retail deposit market with that of the mortgage market to reduce the bank’s reliance on more volatile wholesale funding.

Horta-Osario said: “In the retail book we have a stockmarket share of 28 per cent in mortgages, while we have a 23 per cent market share in savings and we thought we should equilibrate this market share so that it is 25 per cent.”

Lloyds reduced its total wholesale funding in the first quarter to £231bn, down by 8 per cent from £234bn at the end of 2011 and a 24 per cent fall from £303bn in Q1 2011.

The group posted a 9 per cent fall in profits for the first three months of the year to £288m, down from £316m in the first quarter of 2011.

The bank set aside an extra £375m to cover the cost of compensating customers who were missold PPI, bringing the total the bank has earmarked to nearly £3.58bn.

Emba group sales and marketing director Mike Fitzgerald says: “Lloyds is shrinking its share in a shrinking market. It will be likely to tighten its criteria, meaning fewer people will get a mortgage.”


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