Northern Rock posts 14% increase in profits |
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Wed, 25 Jan 2006 13:55
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LONDON: Northern Rock Plc., Britain's eighth largest bank, announced a 14 per cent growth in its profits for the past year helped by an increased demand for low-risk residential mortgages. It said the growth should accelerate in the coming months.
The bank said it is on course to meet its strategic targets in terms of assets and profit growth, return on equity and cost efficiency.
It expects to expand assets by about 20 percent for the next two to three years, with underlying earnings growth rising by around the middle of its 10 to 20 per cent target.
Newcastle-based Northern Rock's underlying pretax profit stood at 504.6 million pounds, up from 441.5 million pounds in 2004. The bank is reporting record earnings for the 22nd straight year. It also reported record gross lending of 26.9 billion pounds during the year, up 15.2 per cent from 2004, while its market share rose to 8.1 per cent from 6.8 per cent. .
Adam Applegarth, the bank's chief executive, said the bank is the lowest cost operator in Europe. It had repriced its mortgage book four years ago and retained 80 per cent of its customers, from around 25 percent before.
The bank announced a 13.6 per cent increase in its annual dividend to 30.1 pence a share. The bank's shares were down a penny at 937 as investors took profits following recent strong gains.
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