Alliance & Leicester in 99% profits tumble

Pill · August 1, 2008, 7:19am

Arsenal · August 1, 2008, 7:37am

Half-year profits at Alliance & Leicester (A&L) have been almost wiped out after the UK mortgage lender wrote down the value of its assets.

Profit before tax for the first six months of 2008 sank to £2m, against £290m in the first half of 2007.

The bank blamed the global credit crisis for the write-downs, but said its core business was in “good shape”.

Earlier this month, Spanish bank Santander agreed a deal to buy A&L for about £1.26bn.

The deal will see A&L shareholders get one Santander share for every three they now hold in the UK bank.

The move will give the UK bank “greater stability and greater certainty” amid risks of a worsening economic outlook and continued credit market disruption, the firm said.

Earlier this week, HBOS - which owns Halifax and Bank of Scotland - and Lloyds TSB both reported sharp falls in profits for the first six months of the year due to the collapse of the wholesale money markets.

HBOS said pre-tax profits dropped 72% to £848m, while Lloyds TSB reported a similar profits tumble, to £599m, compared to the same period in 2007.

Mortgage slowdown

The declining value of its investments saw A&L take a £209m write-down for the first half of the year, slightly greater than the £192m expected hit it warned of in May.

But besides the losses in its investment portfolio, the firm said it was well capitalised and that its retail and commercial banking businesses were performing better than expected.

It said the quality of its mortgage and unsecured personal loan books remained strong with little increase in the number of accounts in arrears.

But it still suffered from the slowing housing market, with net home loan lending down 44% from last year.

Arsenal · August 1, 2008, 7:38am

news.bbc.co.uk/1/hi/business/7536573.stm

link for article in previous post

random_punter · August 1, 2008, 7:46am

Alliance & Leicester profits all but wiped out
* Julia Kollewe
* guardian.co.uk,
* Friday August 1 2008
* Article history
Alliance & Leicester, which last month agreed to a £1.26bn takeover by Spain’s Santander, has seen its first-half profits almost wiped out by the credit crunch.

Profit before tax slumped to £2m, against £290m in the first half of last year. A&L took a £209m hit from losses on investments and asset write-downs in the wake of the global credit crisis, and suffered soaring funding costs in the wholesale money markets.

Pill · August 1, 2008, 7:51am

Speaking of Santander

businessworld.ie/livenews.htm?a=2244095;s=rollingnews.htm

geckko · August 1, 2008, 9:10am

Chavez. What a clever guy.

Pill · August 1, 2008, 9:39am

A complete idiot - let’s copy Cuba because I want to not because it’s a good model to copy. Dangerous fool.

daveirl · August 1, 2008, 10:11am

You’ll get your head bitten off. He’s a hero to most of the champagne socialists in this country.

Hobo_Sapiens · August 1, 2008, 10:12am

Seems to be liked by the poor, perhaps because he redistributes wealth?

ray · August 1, 2008, 11:20am

Indeed, nearly as clever as the politicians who practically gave away the countries infrastructure and state companies for nothing but not before the IMF forced them to loosen labour laws or else get no financial support

Pill · August 1, 2008, 11:26am

If he carries on with his stupid nationalisation programme, there’ll be no wealth left to redistribute.