Mortgage News
RBS increases mortgage market share
Royal Bank of Scotland (RBS) has reported a £3.6bn loss for 2009 but has increased its gross mortgage lending market share to 12% in 2009 from 7% in 2008.
The loss is down from £24.3bn in 2008 with its core business operating profit rising 89% to £8.3bn.
Gross lending in 2009 totalled £19.3bn, including over £3.8bn to first-time buyers. UK mortgage balances totalled £91.9bn at 31 December 2009, 15% higher than at the end of 2008.
Net mortgage lending over the year was £11.8bn and the group is on target to surpass the £9bn mortgage lending commitment, which it agreed as part of its participation in the Asset Protection Scheme.
Mortgage arrears rates stabilised in the second half of 2009 and repossessions showed only a small increase on 2008.
Acceptance rates for mortgage lending were over 88%. In Q4 2009, RBS added 19,000 mortgage accounts, taking the total number of mortgage accounts to 845,000. The figure is 10% up on December 2008.
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Impairments, or bad debts, rose from £7.4bn in 2008 to £13.9bn in 2009, though RBS said impairments appear to have peaked.
Its investment banking arm, global banking and markets. made a £35.7bn operating profit for the full year compared with a £31.8bn loss in 2008.
Stephen Hester, group chief executive of RBS, said: “We are one year into our five-year turnaround plan and have taken significant steps along the path to recovery. The strengths of our core business are becoming clearer, while the legacy of losses and exposures from the crisis is running off.”
He added that RBS’ progress in 2010 depends on the pace of economic recovery, prospective regulatory change and the improvement of impairment losses and write-downs.
He added: “We have exceeded all the principal milestones we set for the first year of our plan. RBS is also becoming safer and smaller more quickly than we expected. In 2010, we will continue to focus on the recovery factors we can control, while effectively navigating the factors we cannot. We see the outlook as cautiously encouraging for RBS and the economies we serve, although with clear risks.”
The UK taxpayer owns 84% of RBS after the government bailed out the bank in 2008. Earlier this week, Hester waived his £1.6m bonus.