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Lenders make substantial profits

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  • 11/08/2003
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The Royal Bank of Scotland Group, the second-largest bank by asset size in the UK, has reported a 10...

The Royal Bank of Scotland Group, the second-largest bank by asset size in the UK, has reported a 10% rise in profit for the first half of the year.

Pre-tax profit for the six months ending 30 June 2003 increased to £3.45bn, from £3.15bn for the same period last year. This profit was largely attributed to net interest income from its core lending business, which grew by £152m to £4.03bn.

Fred Goodwin, group chief executive of the Royal Bank of Scotland, said: ‘These results provide further evidence of the core strengths of our group: the ability to grow income strongly, while improving efficiency and maintaining credit quality. Coupled with our strong cash generation, these attributes present us with a wide range of strategic options.’

The Royal Bank of Scotland is the third major bank in the UK to exceed its half-yearly expectations, with HBOS and HSBC, the country’s largest bank, both announcing pre-tax profits of 21%.

Earlier this year HSBC purchased Household International, the second-largest consumer finance company in the US, a move which has been credited with the surge in its pre-tax profits for the first half of this year.

Sir John Bond, group chairman of HSBC, said growth was also boosted by the low ‘ and declining ‘ interest rate environment.

He commented: ‘Growth in consumer credit prompted unprecedented levels of mortgage refinancing in the UK and US. HSBC gained both market share and significantly increased fee income.’

Elsewhere, Portman Building Society, the fourth-largest mutual in the UK, boosted its total assets to £11bn, with gross new mortgage lending up 8% at £1.5bn.

And Leeds & Holbeck, the UK’s eighth-largest building society, announced record results registering assets of over £5bn for the first time in its history.


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