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Barclays reports net balance mortgage growth of £6.9bn in first half of the year

  • 28/07/2021
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Barclays reports net balance mortgage growth of £6.9bn in first half of the year
Barclays reported £6.9bn in net balance mortgage growth in the first half of the year, nearly triple the growth reported last year.


Barclays did not disclose its gross mortgage lending for the period.

The increase in business was attributed to a strong flow of new applications and stable customer retention.

It noted the revenue was partially offset by a £1.8bn decrease in its Education, Social Housing and Local Authority portfolio as well as a £1.5bn decline in unsecured lending balances.

Barclays added that new mortgage business was driven by heightened demand in the property market due to the stamp duty holiday.

The average loan to value (LTV) of its mortgage portfolio stayed stable at 51 per cent, compared to 52 per cent in the same period last year.

The lender has been reintroducing higher LTV products in a “phased manner” in the first half of the year as Covid-19 restrictions were lifted. This includes 95 per cent LTV product under the government scheme in April.

It explained that the lower LTV loan proportion was due to the government’s guarantee scheme only being live for around three months.

The lender pegged mortgage balances for the second quarter were pegged at £115.2bn, which is up by £3.3bn from the first quarter this year and an increase of £10.1bn from the same period last year.

The value of mortgage applications have reached a high of £11.9bn in Q2, the fourth consecutive quarter of growth.

This is compared to a low of £5.1bn during the same period last year. They recovered to £11bn in the third quarter of last year and have since exceeded that figure.

The lender said margins continued to be “attractive” but they were expected to fall from levels seen in the first half of the year.

The bank delivered a profit before tax of £5bn, up from £1.3bn in the first half of last year.

According to Hargreaves Lansdown analyst Nicholas Hyett it was driven by a £4.5bn swing in provision for bad loans.

Hyett said that conditions were not ideal for banks, with low interest rates and international consumer loans and cards business falling but said this had been offset with the swing in credit impairments.

He explained: “None of that matters all that much right now though, a huge swing in credit impairments has swept all before it in these results. And that’s likely to be a theme for the rest of the year. So long as the economic outlook continues to improve Barclays results will look rosier.”

Its return on equity also improved to 16.4 per cent, a near sixfold increase compared to the same period last year.

Earnings per share were pegged at 22.2 pence per share, up from 4 pence per share. Barclays share rose 4.1 per cent in early trading.

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