Yet another partly state owned bank has announced profits this week and landlords looking for a bank to provide funds for extending their property portfolio, could be well advised to try Lloyds.
Lloyds Banking Group today posted a half year underlying profit of £1.6 billion in a dramatic reversal of fortune. In the same period last year the bank lost over £3.9 billion. The bank which was rescued by the state and is still partly owned by UK, taxpayers reported good profits from its retail banking section achieved by acquiring bigger profit margins on its mortgage lending and lower loan impairment losses from its commercial banking section.
Surprisingly, the group reported that net lending to the business sector had not increased, despite politicians clamouring for the banks with a state stake holding to support small businesses by lending to them again. Eric Daniels, the Chief Executive of Lloyds, explained by saying “We are seeing very little demand out there … so it is not a question of us being mean and turning customers away.”
The insurance arm of the business was held back by a £70m charge related to its decision to stop offering the now controversial payment protection insurance policies that had been a profit maker for banks in the past.
With Lloyds insurance sector struggling and the retail arm looking to lend to business there would appear to be an opportunity for a residential landlord to arrange cheap landlord insurance at the same time as securing a loan to buy more properties.