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Lloyds plans to cut share of mortgage market to 25%

Lloyds Banking Group is planning to cut its share of the UK mortgage market from 28% to 25%, according to reports.

In a call with analysts yesterday discussing its Q1 2012 results Antonio Horta-Osario, chief executive of Lloyds group, pledged to reduce his bank’s share of UK mortgage lending.

He is also aiming to increase its share of retail deposits from 23% to 25% to align with its share of the mortgage market.

Lloyds says it has maintained a strong presence in the house purchase market and there has been a reduction in the amount of remortgage business.

Its approval rates have remained consistent compared to last year and around eight in 10 applications are approved.

A spokeswoman for Lloyds says: “The retail  deposit market continues to be highly competitive, and the costs of deposits remain high.

“However, given that retail deposits remain cheaper than wholesale funding, we see it as sensible to continue to grow our deposits further.”

Lloyds reduced its total wholesale funding to £231.3bn, down 8% compared from the end of 2011 and 24%, or £71.8bn since the end Q1 2011.

Wholesale funding with less than one year maturity reduced to £91.4bn, down by 41% since March 2011 standing at £154.6bn as of 31 March 2011.

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  • Isabella Clutterbuck 4th May 2012 at 9:12 am

    They’re not talking about gross lending, it’s stock to 25%! That means gross below 20% – only a bit down on where it has been for the past 2 years..

  • Adam H 2nd May 2012 at 4:21 pm

    I don’t think we need to panic too much. Colin is quite right it isn’t exactly earth shattering.

    Plenty of other lender are looking to increase their market share – Coventry are looking to move from 3% to 5% this year and I’m sure that Santander/Nationwide will be happy to pick up the other 1…

  • Les 2nd May 2012 at 3:29 pm

    A 3% reduction could easily be achieved by ceasing direct sales. It would also assist in meeting the MMR requirements of eliminating non-advised sales.

    I guess that is why it won’t happen

  • Ancient Wisdom...is a mortgage broker in N3 2nd May 2012 at 3:00 pm

    Antonio Horta-Osario – dont worry my amigo, your awfully priced mortgage products and high SVR will mean your market share will automatically fall to below 25% – faster and sooner than you expect.

    Thats worth a bonus of £3m in itself right amigo?

    mmm…im in the mood for some Rioja tonight..

  • We're all doomed!! 2nd May 2012 at 2:18 pm

    Yes Roger, Banks are being told to lend – to businesses!!!

  • colin 2nd May 2012 at 2:09 pm

    slash ??..28% down to 25%…….thats hardly earth shattering is it ???…..assumings a £120bn market its £3.6bn, assume average loan of £150k..it equates to 24000 mortgages…….

    Halifax arent really playing at the moment anyway apart from in Buy to Let, but seeing as thats such a cash cow I don t think the reduction will come from there!!!!!!!

  • Roger Travis 2nd May 2012 at 2:04 pm

    This is an 11% reduction in lending from a state owned bank. I thought the banks were being told to lend. How are other lenders going to cope with Lloyds reducing their lending so much. I can only see further tightening of criteria and increasing of rates.