Co-op mortgage lending hits £1bn in 2012
In its interim statement published today the bank said a further £0.5bn was lent via Platform up from £0.3bn in H1 2011.
The lender’s loan-deposit ratio broadly in balance at 101% (December 2011: 94%).
The statement also shows that early in the third quarter of 2012 £650m was raised in a prime mortgage securitisation.
Two months ago Co-operative restructured Platform’s management team as part of a strategic review and David Tweedy stepped down as managing director.
Lee Gladwell, director of sales and proposition at Platform, remained as an interim head of Platform while James Hillon, Co-op’s head of mortgages, took overall responsibility for the intermediary business.
Overall the bank reported a 67.9% drop on operating profits to £36.9 which it said was down to on-going uncertainty in the eurozone, low interest rates, increased bad debts from lending to corporate customers, and provisions for payment protection insurance.
The loss before tax was after a charge of £40.0m for PPI mis-selling – down from £90.0m in 2011.
The bank said: “In line with many of our competitors, we have seen an acceleration in the rate of claims during 2012, driven largely by the activity of claims management companies, and the additional charge in 2012 reflects this. We remain committed to doing the right thing for our customers, especially if we get things wrong and will deal with their complaints in a fair, personal, easy and responsible manner.”
Impairment losses were broadly flat year on year reflecting the high quality of new lending, and continuing improvements in the collection of arrears, against the backdrop of the deteriorating economic environment.
Mortgage quality has been maintained with continued low rates of impairment, and late arrears (>2.5% of balance) on only 0.29% of accounts (December 2011: 0.30%).
The bank said: “The outlook for our industry looks unlikely to improve in the short to medium term and the risks remain considerable. Any economic recovery is likely to be slow at best, offering little prospect of near term recovery in funding margins, while the impact of increased financial regulation will continue to add cost pressures.
“Impairment pressures are unlikely to significantly abate in the short term. However, the exciting prospects from the acquisition of the 632 Lloyds branches should be of considerable benefit for both the financial strength of the Bank and the quality of service and product range offered to our customers.
“The focus of the business is to continue our transformation journey and become the compelling co-operative alternative, while delivering an acceptable level of financial performance in this very challenging economic environment.”