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Barclays mortgage lending steady at £10bn as PPI costs soar

  • 28/07/2017
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Barclays mortgage lending steady at £10bn as PPI costs soar
Barclays UK reported gross mortgage lending of just over £10bn in the first six months of 2017 with increasing remortgage business and the closure of Help to Buy 2 bringing lower overall Loan to Value (LTV) lending.

In its first half results to June 2017, the UK’s fifth largest lender in 2016 reported an average LTV of 47% on its mortgage book and 62% on new lending.
This includes over 7,500 first-time buyers in the first half of the year and equates to £1.65bn in lending.

The £10bn lending was in line with last year to date.

Barclays closed 36 branches in the first half and increased its mobile banking customers from 5.1m to 5.9m over the period.

In the UK, profit before tax fell 41% to £634m primarily due to charges for PPI of £700m up from £400m in H1 2016 and the loss of income from Barclays’s disposal of Visa Europe. The bank also said the base rate reduction in 2016 played a part.

On total UK lending, credit impairment charges increased £32m to £398m reflecting higher charge-offs in personal Banking and higher recoveries in H116.

The UK bank’s total operating expenses increased 14% to £2.628bn due to charges for PPI of £700m against £400m in H1 2016, the costs of setting up the ring-fenced bank and investment in cyber resilience and technology.

Speaking globally, Barclays group CEO James Staley said: “Our business is now radically simplified, the restructuring is complete, our capital ratio is within our end-state target range, and while we are also working to put conduct issues behind us, we can now focus on what matters most to our shareholders: improving group returns.

He added: “We have accordingly established a new target today which is to achieve a greater than 10% group return on tangible equity over time.”

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