HBOS says its stand-alone banking unit Intelligent Finance is on course for break even by the end of 2003, despite posting a loss before tax of £147 million for the year ended December 2002.
HBOS says strong growth in net interest income was the key factor behind an improvement in second half performance as IF reported a £29m reduction in losses compared to the first half.
Customer advances increased by £7bn in 2002 as IF took a UK net mortgage lending share in excess of 8%.
The telenet bank now claims 600,000 accounts, double the total at the previous year end. Average products per customer also rose to 2.2, compared to 1.9 in 2001.
HBOS has set a target for Intelligent Finance to break even by the end of the year with average products per customer reaching 2.5.
Across the main bank, HBOS says account customers have continued to migrate to lower cost distribution channels, with telephone and Internet sales growing by 173%.