Lloyds Banking Group has reported a return to profitability in its third quarter ended September 30, as its open mortgage book increased by £3.5bn in Q3 amid a ‘mini boom’ in the housing market.
In an interim management statement published yesterday (October 29) the group reported a statutory profit before tax of £1bn in its third quarter.
António Horta-Osório, group chief executive of Lloyds Banking Group, said: “Although our performance has clearly been impacted by the pandemic and the associated challenging economic environment, I am pleased that we are now seeing an encouraging business recovery and, with impairments significantly lower, a return to profitability in the third quarter.
“In particular, we increased open mortgage book lending by £3.5bn in the quarter, with a 22 per cent share of approvals building a strong pipeline for the fourth quarter, and have supported businesses with an 18 per cent share of government support scheme lending.”
Separate data from the Bank of England showed mortgage approvals for house purchase last month reached their highest level since September 2007.
Halifax, part of Lloyds Banking Group, said in its house price index for September that it had received more mortgage applications across the last three months from first-time buyers and homemovers than at any time since 2008.
The group is ranked by UK Finance as the largest mortgage lender to individuals in 2019.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Lloyds wins a rosette for a surge in applications for home loans and a huge increase in mortgage lending, led by the mini boom in the housing market.
“It doesn't end here, as Lloyds has also nabbed a large share of approvals for the next quarter as well.
“This is encouraging news, but once the stamp duty holiday ends and given the fragile economic recovery, there are concerns the mini housing boom could turn into a bust, which would lead to a reversal of fortunes for this part of Lloyds business.”
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