HBOS defies the doom-mongers

BANKING giant HBOS delivered a resolutely optimistic message on the economy and the housing market as it reported a 13% leap in half-year profits.

The group formed from the merger of Halifax and Bank of Scotland said it had grabbed a 31% share of the mortgage market, beating its targeted 25%.

Chief executive James Crosby defied doom-mongers on the future direction of house prices across the UK, but conceded there were 'real supply and pricing pressures in London and the South East'. Overall, he said: 'We expect growth in house prices through 2003, albeit at a much lower and more sustainable rate than in 2001 and 2002.'

Pre-tax profits in the six months to 30 June came in at £1.578bn against £1.402bn a year earlier and retail banking profits surged to £671m from £570m before. Bad-debt provisions rose to to £1.1bn against £1.034bn a year earlier, although at the same time lending surged by nearly £20bn to £144bn.

Crosby said there had been little deterioration in the bank's credit experience, even in business banking, where it is aggressively expanding. Shareholders will pick up an interim dividend of 9.8p a share - up 5% on this time last year.

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