HBOS lauds IF performance

HBOS lauds IF performance

Halifax Bank of Scotland (HBOS) says its telenet banking subsidiary Intelligent Finance delivered an "outstanding" performance in its first full year to December 2001, winning nine per cent of mortgage lending market share and 70,00 new current accounts.

IF, which reported a savings inflow of £1.7 billion for the year, also sold £239 million of personal loans and issued 31,000 credit cards during 2001.

HBOS, Britain's fourth biggest bank, says 90% of the business gained by IF is new to the group.

However, losses before tax rose to £154 million, against £88 million the previous year, with operating expenses up to £118 million, from £88 million.

HBOS says IF remains on course to break even by the end of 2003.

Reporting a 5.7% drop in profit to £3 billion, HBOS surprised the City this morning by stating its intention to raise £1.37 billion to fund organic growth via a private placing of 150 million new shares.

Operating expenses across the UK banking group as a whole grew by 10% in the year, primarily driven by additional staffing costs, technology investments and marketing. Technology spend particularly at Bank of Scotland increased as new investments were made in core branch banking systems.

The bank says the merger provides an opportunity to extract £120m of cost synergies over the next three years through a combination of distribution integration, central overhead consolidation and IT integration.

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