Bradford & Bingley, the UK's ninth largest lender, has seen its first half profits rise to GBP164.2, not including some significant impairment charges.
While the Yorkshire-based bank said that residential lending balances were up 19% at GBP28.4 billion and a record level of new mortgage lending was achieved (GBP2.4 billion), some of the gloss of the results was removed by the need to set aside more money for compensation payments.
Bradford & Bingley said that a further GBP89.4 million would be set aside to cover compensation costs relating to endowment product mis-selling at a now-closed part of the business. Analysts at Dresdner Kleinwort told Reuters that this impairment charge was shockingly large.
We have had a very successful first half. We have continued the strong momentum from the second half of last year and delivered record lending growth, excellent income growth and a very strong profit performance, said CEO Steve Crawshaw.
Our business is bearing the fruits of focus. Our markets are continuing to perform well and we have a very robust pipeline, ensuring we are well placed to continue this growth.