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Lloyds puts ‘price discipline’ ahead of mortgage market volume

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  • 02/05/2019
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Lloyds puts ‘price discipline’ ahead of mortgage market volume
Lloyds Banking Group is prioritising price stability over mortgage volume in the increasingly competitive market, according to its interim results.

 

The group reported a dip in its overall open mortgage book balances by £2.5bn in Q1 2019, which it said was “driven by expected maturities and ongoing pricing discipline.”

However, it expects this figure to be in line with 2018 year-end total of £264bn by the end of December.

The lender’s rate restraint within the market is also highlighted by its net interest margin remaining resilient at 2.91 per cent, barely down from 2.93 per cent at the same point last year.

 

Digitalisation

The lender confirmed its progress on digitising the group, with the number of active users increasing by 200,000 to stand at 15.9m.

In the three months up to March 2019, technology was 17 per cent of operating costs, with strategic investment standing at £1.2bn.

In Q1 2019 the bank has continued to roll out its Open Banking offering with 60,000 users.

 

Profit up

The group’s underlying profit of £2.2bn was eight per cent higher, driven by increased net income and lower operating costs, with statutory profit after tax at £1.2bn, up two per cent.

Net income of £4.4bn was two per cent higher than in Q1 2018 with higher other income and lower operating lease depreciation.

António Horta-Osório, group chief executive, said in Q1 2019 the bank delivered a strong business performance with continued strategic progress, increased statutory and underlying profit and strong financial returns.

He added: “While Brexit uncertainty persists, and continued uncertainty could further impact the economy, I remain confident that our unique business model, and in particular our market leading efficiency and targeted investment, will continue to deliver superior performance and returns for our customers and shareholders.”

 

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