Alliance & Leicester Profits Up In H1

"I am delighted to be able to announce record pre-tax profit," chief executive Peter White said.

Britain's fourth largest building society, which earlier this year decided to opt for bank status, said pre-tax profit for the period was up 12 percent at 183 million pounds ($284 million) from 163 million pounds the year before.

While its gross mortgage lending was significantly lower at 927 million pounds, from 1,757 million at the end of June 1995, this was offset by a successful customer retention policy which resulted in a low level of mortgage redemptions, it said.

The fall in mortgage lending accompanied by increasing profit mirrors a similar trend at Halifax Building Society HAL.CN, which is also moving towards flotation.

The Alliance was now experiencing "a gentle upward movement" in its mortgage lending business as "some of the more ludicrous deals" offered by competitors had been withdrawn, group finance director Richard Pym said But the market remained very favourable to the consumer, despite the removal of some of the deals offered. Pym said prices in the British housing market were beginning to rise gently and this should remove negative equity.