Bradford & Bingley confident of beating profit forecast |
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Published
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Fri, 09 Dec 2005 14:15
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Mortgage bank Bradford & Bingley said on Friday that an improved recovery in buy-to-let mortgage lending would help it beat market forecasts for full-year profits. It also said that lending picked up robustly in the second half of the year.
Analysts had predicted that B&B's annual pre-tax profits to be around £295.6 million, but according to the firm, it would be posting profits close to £306 million.
According to B&B chief executive, Steven Crawshaw, mortgage sales in the second half reached record levels after a sluggish start in the first-half. He said that sales increased in the wake of interest rate cut and rented property also showed a rise in demand.
Mr Crawshaw added: “Our residential lending business has performed strongly with volumes increasing steadily over the period and we expect volumes in the second half to reach record levels.”
The bank said the compensation claims for mis-sold investment and endowment products in its closed subsidiary, IFA “are now expected to exceed the level previously provided”. So, it will be booking a one-off charge similar to the provision made in 2004 of £37.1 million.
B & B expects fundamentals supporting housing market like better employment and cut in interest rates to be strong for the foreseeable future.
B& B is presently Britain’s best- performing bank stock in the last one year.
A statement issued by the company said: “The housing and mortgage markets have shown a good recovery in the second half. Housing transactions and mortgage completions have increased steadily from the lows seen at the start of 2005, boosted by borrowers' confidence levels.”
Its shares rose by 12 pence to 395¾ pence in early trading on Friday.
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Imminent rate cut gossip sparks fixed-rate mortgage rate reductions 