When we started this strategy, we thought we’d see underlying growth in SMEs on both sides of the balance sheet. What we’ve actually seen is both sides deleveraging, cash flows, reducing and lending levels debt reducing. Underpinning that, we pulled out some key growth areas, and we are seeing progress. So for example, our merchant acquiring business, which again is a nice fee-based business and is really linked to some of our broader relationships into the large corporate side. We’ve seen good year-on-year growth, that needs to get to scale to deliver the underlying profitability that we want. And we focus on trading businesses because this business historically had been largely a secured lending business, which is great. So it’s not an or strategy, but it’s an and.
And we’re building out this digital transactional banking, working capital proposition, and we’re growing customers in that space. It’s tiny relative to the net changes in that balance sheet. So it’s hard for you to see. So that’s an area which is more difficult because of the trading environment. Insurance, protection, investments, we talked about the annuity business, market share is up after the difficulty around pricing in home insurance. We saw a really strong year. Our ability to start bringing protection products to our mortgage customers. We’ll give you more evidence of that later in the year, but we’re seeing good upticks in that. And our workplace pensions business is the number two business in the U.K., and we have strong ambitions.
We want to be number one. So we’re seeing the growth in that business. On the relationship bank, I won’t go through everything. Mass Affluent, we gave you some of the stats. We’re seeing growth in Mass Affluent, growth in Mass Affluent balances. We’ve launched a new investment service, that’s small, and that’s slightly slower than we thought it would be partly because interest rates have been so strong on savings, but we’re now live with a ready-made investment product. And I mentioned earlier that one of the things we’re really interested is we start to bring that back to U.K. banking, investments as by the U.K. banking. More than 50% of the customers that have engaged with that service are below 35, and they’re doing monthly contributions.
So that’s going to take some time to scale, but that’s really important for lots of reasons. And then finally, on our customer — consumer lendings business, you’ve seen the growth in the transport business. We’ve over-delivered on our Tesco franchise. We’re seeing underlying growth in the consumer finance business. And we’ve announced this embedded finance business. It’s going to take some time for that to become material from an economics perspective. But strategically, it’s really important. The other area that’s been more challenging than we originally laid out is mortgages, and we’ve had the discussion around, I remember, we were the first institution to say we thought mortgage margins would go down to about 75 to 100 basis points, and we said that in February ’22 and there was kind of deep intake in the room around that.
Obviously, both the scale of the mortgage market and the margins have been significantly tighter than we thought originally. The resilience of the business model has more than offset that because we increased our margin guidance for 2026 by 300 basis points at the start of 2023. But that’s a more challenging market. Now the good news is we haven’t been standing still and we’ll continue to give you updates, so I can see the CEO of the business over there around where we’ve been investing to engage customers, be better at remortgaging and then compete in parts of the mortgage market, and there’s some really good stories within that. But obviously, as you’ve seen, our growth in mortgages has been behind where we wanted to be. So yes, we have real confidence around the £1.5 billion by ’26, to £700 million by the end of this year.
For me, the more important thing is to look at the underlying growth in market shares and then the resilience and stability of these franchises. Recognizing, as you know, that the majority of Lloyds Banking Group’s businesses have been losing market share for the previous decade. So we’re — you can already look at the data and see that stabilized, and we’ve turned the corner. And these strategic areas are growing well.
Douglas Radcliffe: Excellent. We’re nearly 15 minutes over. So I think that feels like a great place to stop. I am conscious that there are a couple of other questions, which we’ll deal with either after this in the form of conference or indeed directly. But otherwise, let me just hand back briefly to Charlie just for final…
Charles Nunn: Thanks, Douglas. Well, look, just very briefly, thank you so much for coming today, and thank you very much for your attention. 15 minutes over, this is the end of a very long season for you. I’m guessing you started with the American banks in January, and we’re near the end of the Europeans in the U.K. So really appreciate the time. One kind of sales pitch, if that’s all right. We have our Mass Affluent and IP&I seminar on the 20th of March. It will be part of insurance business, not the whole thing, the investments piece, but that’s going to be another example where we can unpick the covers of what we are doing and we’re making progress. So if you’re interested in that, please join us for that. And again, thank you very, very much for joining today.
