Mortgage News
Lloyds most exposed to risky mortgages, finds BoE
Lloyds Banking Group has the largest exposure to high LTV mortgages of any of the top six lenders in the UK, a Bank of England report has found.
The Bank’s Financial Stability Report showed that around 60% of Lloyds’ mortgage lending is judged to have a “high” or “very high” LTV ratio, reported the Telegraph.
Royal Bank of Scotland is second with 40%, while Santander UK has 35%, Nationwide 30%, Barclays 20%, and HSBC 10%.
A high LTV ratio is classed as 70% to 90%, while a very high ratio is defined as above 90% LTV.
Almost 13% of Lloyds’ £340bn mortgage book – £45bn of loans – exceed the value of the property they are secured upon, the Bank of England found. The number of borrowers in negative equity is around 5%.
This week, Lloyds is set to publish its strategic review. The lender is expected to say it is on course for an early exit from the state-backed emergency funding vehicle, the special liquidity scheme, which was set up in 2008 to help banks raise finance during the crisis.
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António Horta-Osório, Lloyds’ new chief executive, is also expected to outline a £1bn cost-saving plan that could lead to the loss of 15,000 jobs.
As part of the review, the bank is thought to be planning to tell investors it will quit many countries where it operates but will retain interests in Australia and parts of Latin America.