C&G heads mortgage war
Tuesday 07 February 1995
This growth was driven by C & G's strategy of keeping mortgage rates very competitive as well as offering cash-back loans and mortgages with no value or application fees. Analysts expect the price war in the market to intensify.
Halifax issued its response to these pressures yesterday by agreeing to buy the UK mortgage portfolio, worth £1.5bn, from France's Banque Nationale de Paris. The gain for the Halifax, Britain's biggest building society, is about the same as the new business won by C & G. There are estimated to be some £20bn of mortgage portfolios for sale in the UK, with many small lenders willing to cede. The Abbey National recently bought two such portfolios.
Michael Lever, analyst at Nomura, said C & G's aggressive strategy had pushed its market share to about 7.3 per cent of net new lending. But he pointed to the increased cost/income ratio of 31.9 per cent, from 26.4 per cent in 1993, incurred to achieve this higher lending volume. Although the society's provisions for bad debts fell to £32m from £76m in 1993, analysts' expectations that this would be reflected in higher profits were dashed by the increased costs of acquiring new business.
Pre-tax and pre-provision profit fell last year to £258m from £278m in 1993. C & G's tough policy fits well with statements from Lloyds which go in the same direction. Analysts expect that if the acquisition goes ahead, the society could become even moreaggressive in its bid for market share, raising the stakes in the mortgage battle.
- 1 What happens to your body when you give up sugar?
- 2 Have sex with your iPad thanks to the new sex toy no-one asked for
- 3 The 'sex selfie stick' lets you FaceTime the inside of a vagina
- 4 Why you're almost certainly more like your father than your mother
- 5 Westboro Baptist Church couldn't picket Leonard Nimoy's funeral because they didn't know where it was
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
End of the licence fee: BBC to back radical overhaul of how it is funded
Nigel Farage promises Ukip will not 'stigmatise' would-be migrants – and says he wants 'everyone to speak the same language'
Ex-head of MI6: 'We shouldn't kid ourselves that Russia is on a path to democracy'
Most people think legal tax avoidance is just as wrong as illegal tax evasion, poll suggests
iJobs Money & Business
£8 per hour: Recruitment Genius: This Pension Specialist was established early...
£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...