A&L posts slim profits

UK banking giant Alliance & Leicester has posted a 5.4 per cent increase in profits for 2005, up from 2.4 per cent in 2004 but below analysts' expectations.

The bank reported that cost-cutting measures had enabled the company to improve profits, with more customers choosing to bank online and over the telephone.

A&L stated that its core operating profit was up by just 1.5 per cent, from £540 million ($939 million) in the previous year to £548 million ($953 million) in 2005.

Mortgage business rose for the bank to £4.9 billion ($8.5 billion) last year, giving A&L a market share of 5.4 per cent, compared with just 2.4 per cent in 2004. However, losses from bad debts rose steeply in 2005, from £46 million ($80 million) in 2004 to £74 million ($128.7 million) last year.

The company announced total income of £1.39 billion ($2.4 billion) for last year, with sluggish revenue growth boosting it marginally from £1.37 billion ($2.38 billion) in 2004.

A&L chief executive, Richard Pym, commented: "This is an exciting time for Alliance & Leicester and I believe the bank has never been in better shape. We have a sustainable business model to deliver future revenue growth and efficiency improvements."

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