Scottish Widows reports record profit

Scottish Widows Bank has reported record financial performance for the first half of 2006.

Profit before tax for the half-year was 13.5m (unaudited), compared with 10.7m for the same period last year, a rise of 26%.

Mortgage lending grew by 564m over the six months to 5.1 bn, an increase of 12% on 2005 year-end balances. During the same period, net deposit growth was 216m (9% growth) with total retail deposits increasing to 2.7bn.

Graeme Hartop, managing director of Scottish Widows, says: “This is the most profitable first half-year return in Scottish Widows Banks history, with continued significant increases in mortgage lending and deposit growth.

Our cost-to-income ratio for the six-month period was 42%, compared with 48% for the same period last year. Credit quality also remains excellent, with arrears levels approximately one sixth of the industry average.

“The underlying strategy of providing consistently competitive products from a low cost base continues to drive success. Our strategic positioning and range of innovative niche products have served us well in the intermediary and affinity partnership markets.

Hartop adds: I am delighted with the progress made and the increased financial contribution to the Group.