This is an increase of £1.4bn on 2011 and in gross lending last year puts the lender behind Barclays (£18.2bn) and HSBC (£16.4bn), but ahead of Santander on £14.6bn.
The bank advanced £3bn to first-time buyers, while Funding for Lending helped it lend more than £500m of mortgages for 4,000 homebuyers, or 14% of all completions in the last quarter of 2012.
Overall mortgage balances grew by £4.1bn with the share of new business at 10%. The results show RBS creeping up the Council of Mortgage Lenders’ gross lending list to rival Nationwide and Barclays.
The bank, which posted a pre-tax loss of £2.2bn in the fourth quarter and £5.2bn overall, was fined £390m for Libor rate-fixing earlier this month.
RBS chief executive Stephen Hester said the risk reduction strategy needed to make the bank sound was nearing completion, although it still suffered from “reputational costs”.
He said the bank had lent roughly £75bn in commercial home loans but acknowledged borrowers had paid back a similar amount of money: “That’s not really surprising. The economy didn’t grow this year and why would people take on more debt?”
RBS intended 2013 to be the last big year of restructuring, he added. “As the spotlight shifts to the ‘new RBS’ post restructuring, we are determined that it will show a leading UK bank striving to be a really good bank. By serving customers well RBS can become one of the most respected, valued and stable of banks. That is our goal.”
The bank had paid out £1.3bn in Payment Protection Insurance compensation by the end of 2012, the results revealed. It expects a “significant percentage” of cash flows associated with PPI to have occurred by the end of 2013.
