Abbey fills mortgage market gap

Oct 29 2009 by Iain Laing, The Journal

LENDER Abbey has claimed more than a fifth of a shrunken mortgage market between July and September as it filled the gap left by struggling rivals.

The group’s gross lending of £19bn represented 20.5% of the market - well above its historic 13.4% share - although the figure was 37% down on the previous year.

Spanish-owned Abbey said new mortgage lending of £5.1bn - overall lending less repayments - represented more than half the estimated market size.

The group has two million mortgage customers and also owns Alliance & Leicester and the savings business of Bradford & Bingley. It lifted pre-tax profits by more than 30% to £1.16bn in the third quarter of 2009.

Abbey, which has also raised its corporate lending levels, said it continued to be “a consistent mortgage lender in difficult times”.

Bad debt provisions are rising but at a lower than expected rate due to the quality of the loan book and record low interest rates.

Chief executive Antonio Horta-Osorio said: “Our strategy of offering value-for-money products, underpinned by responsible lending and controlled costs, has seen us deliver a significant uplift in revenues and allowed us to continue to support the UK economy with increased lending to homeowners and businesses.”

The business also has around 15 million savers following its moves for A&L and B&B last year.