Northern Rock reports record UK lending

25 January 2007

UK mortgage bank Northern Rock yesterday reported significant increases in lending and pre-tax profits, as it seeks to increase its share of the British mortgage market.

The bank said that gross lending for 2006 was up 12 per cent to top a record £33 billion, pre-tax profit for the year totaled £627 million - an increase of 21 per cent on 2005.

The company now takes up around 13 per cent of new lending in the UK, although it has only 7.1 per cent of total lending in the country.

Commenting on the results, Northern Rock's chief executive Adam J Applegarth said that the company was in a strong position, and that the new Basel accord due to come in to force later this year would benefit the company still further.

"Our capital ratios remain strong, enhanced by the issue of £400 million preference shares and we remain well positioned to begin to take advantage of the introduction of Basel II during 2007," he said.

"The proposed total dividend for 2006 amounts to 36.2 pence - an increase of 20.3 per cent over the 2005 total dividend. This reflects our confidence that Northern Rock's business model remains robust and continues to deliver growth in shareholder value."

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