The lender, which includes NatWest and Ulster Bank, said it had also increased its share of the UK mortgage market to 12 per cent, however the intense competition was showing as its net interest margin (NIM) took a hit.
“Bank NIM of 2.02 per cent was five basis points lower than Q1 2019 primarily reflecting competitive pressures in the mortgage business and the contraction of the yield curve,” RBS said.
Figures from UK Finance earlier this week revealed RBS’s market share slipped slightly in 2018 to 11.4 per cent, however it appears to be reclaiming some of that in 2019.
Market share growth
For 2019, RBS said mortgage growth was driven by the owner-occupied portfolio with new mortgages in the buy-to-let sector remaining subdued as tax and regulatory changes in the UK affected borrower activity.
The mortgage portfolio loan-to-value (LTV) ratio increased slightly reflecting slower UK house price growth.
By value, the proportion of mortgages on interest-only and mixed terms reduced, driven by fewer buy-to-let mortgages and low volumes of owner occupier interest-only new business.
The domination of fixed rate mortgages throughout the market was also present within RBS activities.
It noted that 97 per cent of all new mortgage completions were fixed-rate deals, 62 per cent of which were five-year deals, “as customers sought to minimise the impact of potential rate rises”.
And of its total loan book, 85 per cent of customers in the UK personal banking mortgage portfolio were on fixed rates; 47 per cent on five-year deals.
Net loans to customers increased by £4.2bn, or 2.8 per cent, as a result of strong gross new mortgage lending and lower redemptions.
Profit and digital up
Overall RBS reported a pre-tax profit of £2.7bn, up £868m on H1 2018.
It also added that it was continuing to see large corporates delay financing reflecting Brexit uncertainty.
Its UK personal banking arm had 6.3 million regular mobile app users, with 74 per cent of active current account customers being regular digital users.
And total digital sales volumes increased by 19 per cent, representing 48 per cent of all sales in H1 2019, with 60 per cent of personal unsecured loan sales via the digital channel, 4 per cent higher than H1 2018.
