Mortgages -
Abbey Triples Mortgage Share by 17% - 30/04/2008
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UK lender Abbey has tripled its share of mortgage lending and increased profits by 17 per cent after taking advantage of its rivals’ weakness in the first quarter.
The lender, owned by Spain’s Santander, had grabbed 15.9 per cent of country’s mortgage market following worsening state of housing markets, which forced rivals to retreat.
Its net profit also rose to £235 million from £201 million as revenue rose 9 per cent and costs were held flat.
Net lending, according to it, reached £2.9 billion in the quarter, more than double the £1.3 billion in the same period last year.
With just over 9 per cent of the traditional share of the mortgage market, Abbey is ranked third in the UK, behind HBOS Plc and Nationwide building society.
Santander chief executive officer, Alfredo Saenz commented that: “Our market share is more than 15 per cent which is more than our natural share because of the market conditions.”
The CEO added that most of the lender’s mortgage signings were from customers seeking to remortgage old loans with the bank, and that very few brand new mortgages were signed, adding that lending remained prudent.
“We are selecting loans very carefully, altering our spreads and conditions,” said he.
In February the bank said it would take advantage of difficult situation to outperform rivals, benefiting from the strong capital base of its owner.
Growing share, it said, was also funded through increased deposits.
As the situation in Britain’s mortgage market got worse a good number of products were removed by lenders while tougher lending conditions were introduced. A major contender in the market, Northern Rock also faced crisis leading to its nationalisation by the government.
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