British bank Lloyds sees increased profits on mortgages

Taxpayer-backed Lloyds Banking Group today said moves to increase rates on new mortgages and borrowers switching from cheaper fixed-rate deals was driving higher profits on home loans.

Lloyds, which is 41% owned by the Government, saw increased income in its retail banking arm during the third quarter thanks to greater mortgage margins.

Borrowers reverting on to standard variable rates and raised rates on new lending helped offset “subdued” demand for home loans, according to the group.

The Halifax and Cheltenham & Gloucester owner said it had a “good” third quarter overall thanks to further declines in losses on loans turned sour since the half year, when it reported profits of £1.6bn (€1.84bn).