The FTB’s lending figure takes the bank close to its £10.0bn full-year lending target for that group.

Total lending in the open book had reached £289.9bn as of 30 June 2021, compared to £277.3m at 31 December 2020.

The average LTV on new lending was 63.1 per cent for H1 2021, against 63.9 per cent for H2 2020.

This comprised an average LTV of 63.3 per cent on mainstream loans and for BTL, 60.2 per cent. 

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Going digital

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Tech investments

Lloyds said it rolled out video capability to 1,500 advisers during H1, “providing enhanced access and flexibility with 800 appointments a week outside branch opening hours”.

It invested in machine learning, “to drive faster mortgage approvals for 20,000 franchise customers using automated income verification analysis”.

Some 45 million customer records were migrated to the cloud.

 

UK mortgage book

The open mortgage book growth of £12.6bn, or nine per cent, was partially offset by the run-off of the closed book. 

The closed mortgage book declined by £1.2bn to £15.3bn in H1 2021.

Total loans and advances rose to £306.6bn as at 30 June 2021, up from £295.4bn on 31 December 2020.

The total UK mortgage loan book comprised 80 per cent mainstream, 16.6 per cent BTL and 3.3 per cent specialist lending.

Lloyds said it had used robust affordability and credit controls over recent years to improve the quality of the UK mortgage book and to position it with low arrears and a low LTV profile. 

Balances of higher risk portfolios, originated before 2008, have continued to reduce.

The average LTV had reduced to 43.1 for H1 2021, compared to 43.5 in H2 2020.

The lender has granted 491,000 payment holidays. Of these 460,000 are being repaid, 2,000 have been extended and 29,000 have missed payments.

The number of mortgages with more than three months missed payments was 34,327 as of 30 June 2021, compared to 35,906 at 31 December 2020.

Stock of repossessions was 257 at end of H1 2021, compared to 343 as of 31 December 2020.

 

Impairment charge

There was an impairment charge of £175m in UK mortgages in the first half.

The lender said the purchased or originated credit-impaired (POCI) assets included a fixed pool of mortgages that were purchased as part of the HBOS acquisition at a deep discount to face value, reflecting credit losses incurred from the point of origination to the date of acquisition. 

The residual expected credit loss allowance, and resulting low coverage ratio on POCI assets, reflected further deterioration in the creditworthiness from the date of acquisition. It said that over time, the assets will run off as loans redeem, pay down or losses crystallise.

The expected credit loss on UK mortgages at 30 June was £905m.

 

Group performance

The bank’s net interest margin reduced by nine basis points to 2.50 per cent, reflecting the lower rate environment and change in asset mix, including lower unsecured balances.

Group profit before tax was £3.9m.