Lloyds Profits Double To £ 2 Billion Thanks To Mortgage Boom | Lloyds Banking Group

A booming mortgage market and economic recovery that made borrowers affected by Covid less likely to default on their loans helped Lloyds Banking Group to double profits in the three months leading up to September.

The group, which owns Halifax and is the UK’s largest mortgage lender, has benefited from increased demand for larger homes linked to the ‘space race’ pandemic, and last-minute efforts by consumers to take advantage of the stamp duty holiday, which ended last month after declining at the end of June.

There was a £ 2.7bn net increase in mortgage lending in the quarter, taking mortgages to £ 15.3bn in the nine months ending September – the biggest increase of this measure for the bank in more than a decade.

It contributed to a 96% increase in pre-tax profits to £ 2bn in the third quarter, from £ 1bn a year earlier. This exceeds average analysts’ estimates of £ 1.3 billion.

The improved economic outlook for the UK, due in part to the success of the Covid-19 vaccination program, has also enabled the bank to release an additional £ 84million. from a pile of cash that had been earmarked for potential payment defaults triggered by the pandemic.

This compares to the £ 301million he set aside in the same period last year and the £ 253million expense expected by analysts in the city. Lloyds has released £ 740million in loan loss provisions so far this year.

Group CFO William Chalmers has confirmed that Lloyds bankers can expect bigger bonuses, which have continued to accumulate over the past three months as the bank’s performance improves . The bank removed bonuses entirely in 2020, reflecting the impact of the Covid crisis on its results.

When asked if bonuses are essential in retaining staff, Chalmers said, “We think it’s appropriate, as I said, to reward employees fairly competitively in the environment in which we evolve. »Bonuses will be paid to bankers in the spring.

The Lloyds earnings report came as bank challenger TSB – which spun off from Lloyds in 2013 – came back in the dark with € 43million (£ 36million) pre-tax profit in the third quarter , thanks to stronger mortgages and lower lending. provisions for losses. It compares to a loss of 76 million euros over the same period in 2020.

It continues a string of strong results from UK banks including HSBC and Barclays, which last week announced higher profits thanks to increased trade and transactions and improved economic forecasts in the UK.

Commenting on his first results since taking office as Managing Director, Charlie Nunn said he saw “significant opportunities” for Lloyds to develop and grow, not least through “disciplined investments”. It comes as the lender is increasingly interested in wealth management.

“It can build on the strengths of customer service, distribution and cost management. As we move into the last quarter of 2021, the Board of Directors, Group Executive Committee and I are developing the next evolution of our strategy and longer term priorities, ”Nunn added.

Sign up for the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

The new chief executive is expected to announce the bank’s new multi-year strategic plan in the new year.

Nunn joined the bank after a nine-year career with rival HSBC, where he was most recently global head of personal banking and wealth management. His appointment completed a high-level reshuffle at Lloyds, which replaced its CFO in 2019 and appointed Robin Budenberg chairman, replacing Lord Blackwell, in January this year.

Nunn’s predecessor, António Horta-Osório, who ran the bank for a decade, left at the end of April to join Credit Suisse, where he is now chairman of the Swiss lender.

Source link

About Mallory Brown

Check Also

Liberty Union Mortgage Team Helps Homebuyers Bid Over Other Deals As Post-Pandemic Real Estate Market Continues To Soar

Jason Solowsky, Branch Manager Jason Solowsky, Branch Manager for the Liberty Union Team Jason Solowsky, …

Leave a Reply

Your email address will not be published. Required fields are marked *