Bradford & Bingley says FY profits in line with analysts' expectations |
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Published
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Thu, 22 Jun 2006 13:35
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LONDON - Mortgage bank Bradford & Bingley PLC revealed today that it is set to meet analysts’ expectations and declare a full-year profit of 6 percent thanks mainly to a sustained growth in buy-to-let mortgages.
The bank issued a trading update ahead of its interim result declaration slated for July 27. B&B said it was conformable with analysts' expectations and had posted strong growth compared to the second half of 2005 when £4.7 billion was lent. "New business volumes have continued to be very healthy and the credit quality of our fully secured lending book remains sound and within our expectations," said group chief executive Steven Crawshaw. "We have a strong pipeline and believe our specialist markets will continue to grow well in the second half of the year."
However the bank could take another charge relating to compensation for endowment and investment products. The bank said it was reviewing its provisions and could take a future charge. Endowments are investment policies designed to pay off property loans, and were very popular in the 1980s and 1990s. But these policies failed to give good returns due to poor stock market performance.
"The volume of claims for compensation related to endowment and investment products has increased markedly, reversing the downward trend established in the second half of 2005," B&B said in a statement. "At this stage, it is not clear whether the recent increase in claims is temporary and reflects only an acceleration of future claims or whether this is a new trend."
Analysts feel the bank has done well to emerge from a murky period. Said Fox-Pitt, Kelton analyst Steven Hayne, "They've done a hell of a good job of talking up their story, but when you read this statement there's really nothing there to add to that momentum."
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Cost cuts, market revival help Bradford & Bingley to better earnings 