Lloyds Profit at Risk as Britons Refinance Mortgages, Exane Says
- Customers will probably seek lower interest rate home loans
- About $144 billion of mortgages on higher rates, analysts say
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Lloyds Banking Group Plc, Britain’s largest mortgage lender, could see its profitability shrink as customers refinance their home loans with cheaper deals this year, Exane BNP Paribas said.
The London-based bank has written about 100 billion pounds ($144 billion) of mortgages over the last three years that are prone to move to lower interest rates, analysts led by Jonathan Pierce wrote in a note to clients. This could create a “substantial drag” on the bank’s profit margins in 2016. Exane cut Lloyds’s rating to underperform from neutral.