Lloyds TSB mortgage lending to be cut.
A recent announcement has been made advising that Lloyds TSB mortgage lending is to be reduced.
Lloyds Banking Group has chosen to reduce its loan book in an effort to mitigate rising funding costs. Customer lending was revealed to have shrunk by 5 per cent to £538 billion for the first quarter of 2012. The reduction in lending allowed wholesale funding to be cut by 8 per cent during the quarter.
Lloyds net income dropped by around a third to £1.9 billion, however despite this the bank still ended up with £288 million in pre-tax profit for the period. This was a massive improvement on the £3.5 billion loss of a year ago.
The new Lloyds TBS mortgage strategy follows closely that of Santander UK, who also advised plans to shrink mortgage lending by withdrawing from both interest only lending and more risky high LTV loans.
Lloyds has however been keen to point out that it has no intention of leaving more sensitive sectors such as the first time buyer market high and dry.
A spokesperson commented on the planned reduction of Lloyds TSB mortgage lending, advising that the decision made was not a reflection of the lender's concern over the UK economy. Tthe decision was purely about better alignment of both lending and deposit funding.
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