Together breaks its loan book record to hit £4.8bn in Q1

This was up 21.5 per cent year-on-year, and up eight per cent on the previous quarter’s £4.4bn.

Average monthly loan originations of £234.7m were up 87.1 per cent, compared with £125.4m last year, and up 17.4 per cent on £199.9m during the previous quarter as the group continued to increase lending volumes.

Underlying profit before tax was down 14.5 per cent to £37.6m compared with £44m during the same period in 2021, and down 12.6 per cent on the last quarter, owing primarily to certain debt facility refinancing costs incurred and costs related to the ongoing review of the strategic options for the business.

Annualised cost of risk remains low at 0.05 per cent compared with zero per cent in the three months to December 2021, which the lender chalked up to a strong loan book performance and continued growth in property values, offset in part by a deterioration in macroeconomic forecasts.

Profits and losses

Cash receipts were up 8.7 per cent year-on-year at £456m, but down 10.1 per cent compared with the previous quarter. The lender said the “decrease in cash generation compared with September-December 2021 was due primarily to some specific, higher redemptions in the prior quarter in our bridging loan book.”

It saw interest receivable and similar income of £98.7m, up 9.8 per cent compared with £89.9m last year, and up 3.5 per cent on the last quarter, reflecting a growing loan book.

Underlying net interest margin remained attractive at 5.4 per cent, down 0.4 per cent on the previous quarter, reflecting “a cautious approach to implementing rate rises for our customers”.

However, the weighted average indexed loan to value (LTV) sat at a conservative 51.7 per cent, down 0.9 per year-on-year.

February and March 2022 saw consecutive record monthly loan originations, but the weighted average origination LTVs remain conservative at 60.3 per cent, down 1.1 per cent on the previous quarter.

Gerald Grimes (pictured), group CEO designate at Together, said: “We continued to shape our business for the future, delivering further improvements to our systems and to the experience for our customers and intermediaries.”

Together provides property finance including personal mortgages and secured loans, short-term bridging finance, specialist buy-to-let mortgages and development finance.

Grimes added that the group has increased the “scale, diversity and maturity” of its funding to support its future growth plans since December, including raising or refinancing over £1.95bn.

He added: “Despite the economic uncertainty, with a strong track record, a clear purpose and strong diversified funding, Together remains well placed to help increasing numbers of customers realise their ambitions and to play our part in supporting the UK economy.”

The lender operates a financial year beginning July 1, making the January to March quarter its Q3.