Profit before tax for the half-year increased by 8% to £14.6 million compared with £13.5 million for the same period last year. The cost to income ratio for the six-month period was 42%, in line with the same period last year.
Net mortgage growth for the half-year was £100 million, a 2% growth on 2006 year-end, with total mortgage balances of £5.7 billion as at 30 June 2007.
Graeme Hartop, managing director of Scottish Widows Bank, said of the results: “The first-half of 2007 has seen intense price-led competition in the mortgage market, which has had an impact on new business volumes. However, we have seen a pick-up in applications over recent months, and pipeline mortgage business was strong at the half-year end. Despite the testing conditions we have achieved good profitability growth in the first half.”
Credit quality remained very strong, with just 0.18% of the mortgage book two or more payments in arrears at 30 June 2007, well below the industry average.
Retail deposits reduced by £0.1 billion (5%) during the six-month period to £2.5 billion at 30 June 2007, reflecting extremely competitive market conditions.
Hartop concluded: “This is a strong set of results in extremely competitive market conditions. The second-half of 2007 will see continued innovation in product development and our strategy remains to identify and develop niche areas of the retail banking market.”
