Bad Credit Mortgage Lender - Platform’s bad debt causes Britannia profits to dip 40%
The bad credit mortgage lender’s or sub prime market sector witnessed a new victim today as Platform, the well known bad credit mortgage specialist intermediary lender incurred loss’s resulting in its parent company Britannia Building Society posting a profit shortfall of 40% in the first six months of 2008.
Britannia Building Society is UK’s second largest building society and it recently posted pre tax profits of just £50.5 million which is approximately 40% down on the £81 million figure it achieved in 2007.
The Britannia Group blamed the huge reduction in profit as a direct consequence of the ongoing credit crunch. Britannia’s mortgage lending total fell from last years £3.7 billion to just £1.9 this year.
Platforms Bad Debt Impacts The Bad Credit Mortgage Sector as The ‘Credit Crunch’ Continues:
It claims the majority of its losses can be attributed to its intermediary lender Platform, who were responsible for lending higher loan-to-value advances for the first-time buyers in addition to providing loans against new-build city centre flats.
Another factor that Britannia believes caused the shortfall, is the arrears arising from specialist lending and the small number of acquired mortgage books which increased as a result of the market downturn. Unfortunately, arrears levels for the lender were above the industry averages at over 1.7 per cent.
The Britannia Group were of the opinion that they’re not immune to the market downturn, and believe their business model budgeted fro the losses arising from some of the lending.
They understood that the general slowdown in the economy as a whole means that losses could come about more quickly than expected, but they intend to take the requisite action to cope with them.
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