Together lending falls 60 per cent in 2020

The lending total was £1.3bn lower than the £2.2bn completed in 2019, but the latest set of results show the lender is continuing to rebuild its operations.

Having completed £482m of lending in the first three months of the year, this dropped sharply as the pandemic hit, with £60m completed from April to June, and then improvements to £131m in Q3 and £223m in the three months to December.

And Together noted loan originations continued to increase in January to £104m.

The lender said key modernisation projects were now underway to improve the application process with the intention of increasing efficiency, reducing costs and improving the user experience for customers and intermediaries.

This includes, automating identification and validation, income verification, affordability assessments, asset valuations and enhancements to risk-based product pricing.

It is intending to improve the layout and user experience of its My Broker Venue intermediary platform.

And providing digital document uploads, paperless direct debits and E-Disbursements are also on the cards.

The lender provided mortgage-payment deferrals to 7,800 customers and by mid-February 2.1 per cent of customers by value remained within a payment deferral, down from three per cent in November.

And of the accounts who have exited payment deferrals, 82 per cent have resumed full payments, 14 per cent are making part payments and four per cent making no payments.

Underlying profit up

Overall, the group loan book was £3.9bn in December, down 6.6 per cent compared with £4.2bn a year earlier and down 2.9 per cent compared with the £4.0bn in September as redemption levels remained strong while the group continued to cautiously increase new lending.

Underlying profit before tax was £38.2m in the three months to the end of December, up 4.7 per cent compared with £36.5m in the previous quarter.

Gerald Grimes, group CEO designate of Together, said the lender delivered a robust performance in the quarter to 31 December, as it “remained focused on supporting our customers, protecting our colleagues and shaping our business for the future”.

“Average monthly lending rose to £74.4m as we continued to cautiously increase originations, with the loan book ending the quarter at £3.9bn with a very conservative LTV of 52.2 per cent.

“We remained highly profitable and cash generative, with underlying profit before tax increasing to £38.2m and cash receipts increasing to £430.6m as redemptions continued to be strong during the quarter and, at 8 February, the Group had accessible liquidity of £366m.”

The lender also successfully issued a £500m bond in January to support its funding position further.

“While we expect economic conditions to remain uncertain for some time, with strong levels of capital and liquidity and our modernisation and transformation programmes underway, we believe the group is well positioned to take advantage of future market opportunities and to play our part in supporting the UK’s economic recovery,” Grimes concluded.