Pre-tax profits up 52% at Newcastle

A surge in gross lending helped Newcastle record a 52% jump in pre-tax pro-fits for 2007.

The society’s lending topped the £1bn mark last year, compared with £693m in 2006.

Jonathan Westhoff, finance director at Newcastle, says: “Some 70% of our lending is against residential property, with none being self-cert or adverse. And only around 3% of our residential exposure is in buy-to-let.”

Newcastle’s pre-tax profit increased from £11.6m to £17.6m.

In its full-year results statement published last week the society attributed its profit growth to its merger with Universal, which became effective on December 31 2006.

Newcastle’s costs rose to £41.2m last year from £33.5m in 2006, largely as a result of the absorption of Universal’s £7.1m cost base.

The results come as Newcastle im-plements a recruitment programme. As Mortgage Strategy reported last week, the society has committed to creating 500 extra jobs by 2012.

Westhoff says Newcastle will re-ceive a £1.3m grant from regional de-velopment agency One NorthEast to support investment in its recruitment programme, which will include a relocation of the business.