The firm said that the decline in lending, which includes retirement interest-only (RIO) mortgages, came as the market remained subdued because of higher interest rates.
Its lifetime and RIO mortgage book was valued at £6.07bn, up from £5.76bn during the same period last year.
Its retail protection gross premium income increased from £760m to £771m, with new business annual premiums of £77m, down from £75m previously, in what L&G said was a “highly competitive market”.
L&G had a retail protection market share of 18.5%, while its margin has risen by 0.9% annually to 2.2%.
Its retail division, including protection and lifetime mortgages, delivered a profit before tax of £162, slightly up from £160m before.
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Over the six months to 30 June, L&G’s group profit before tax was 28% higher than last year at £406m.
António Simões, CEO of L&G, said: “L&G had an excellent six months with core operating earnings per share up 9%, at the top end of our targeted range of 6-9%.”
Simões said L&G was growing and making the most of the synergies between its three businesses, and its retail customer base has increased to 12.4 million.
“The outlook for our businesses is positive, and we are firmly on track to achieve our financial targets. We are delivering on our promise to return more to shareholders with over £5bn in dividends and share buybacks over three years.”
