RBS takes over 10% share of new mortgages

The Royal Bank of Scotland has reported a 10.6% market share of new mortgage lending in the first three months of the year, its latest results reveal.

Net mortgage lending at the state-backed bank hit £2bn in Q1, compared with an increase of £3.2bn in Q4 2009.

RBS attributes the slower rate of growth to competition in the mortgage market and says it suffered a hit to growth in Q1 as a knock-on effect from completions that were pushed through in December ahead of the end of the Stamp Duty holiday.

RBS added 4,000 mortgage accounts in the first three months of the year, bringing the total number of mortgage accounts to 849,000.

The total number of mortgage accounts is up 10% compared to March 2009.

The bank also received over 54,000 mortgage applications, up 22% from Q4 2009.

Stephen Hester, group chief executive of RBS, says the bank remains on track to implement its five-year plan to overhaul and restructure RBS.

He says: “RBS’s retail and commercial businesses are beginning to recover and should drive our growth over the next few years. 

“While we have taken decisive management actions to improve these businesses, the pace of recovery will also be affected by the rate at which credit conditions change and when interest rates return to more normal levels, giving some relief to liability margins.”

He adds: “As 2010 unfolds we remain optimistic for RBS and the prospects of achieving the plans laid out and our vision to restore RBS to an admired and high performing institution. 

“Progress to date should give encouragement, but there is no complacency within RBS as we continue the work across our businesses.”

RBS has pledged to lend an additional £8bn in net mortgage lending between March 2010 and February 2011.

This comes after the bank exceeded its £9bn net mortgage lending target for 2009 by £3.7bn.

As a group, RBS has reported a operating profit for Q1 of £713m, compared to a loss of £1.35bn in Q4.

After restructuring and other non-operating costs, and £500m paid for the government’s Asset Protection Scheme, the bank recorded a loss before tax of £21m against a profit of £134m in the fourth quarter of 2009.