Performance remains in line with Northern Rock’s own forecasts and its strategic intention of achieving annual growth in assets and underlying profits of 20%. The performance of the bank also remains on track to meet independent analysts’ expectations.
The lender is prospering in the healthy UK mortgages market, which has been helped by low levels of unemployment. The bank said that house price inflation has generally slowed and housing transactions this year have risen from the levels seen in 2005, as first time buyers drift back into the market. This background has led to an increase in mortgage lending for house purchases during 2006 for the industry as a whole.
Northern Rock also pointed to strong lending performance, which is continuing in the second half of the year. The bank’s lending continues to be dominated by loans secured on residential property, which represent 90% of total lending.
As the mortgage market remains strong and as our retention performance continues to gain strength, we can achieve our targeted growth with only modest increases in gross residential market share, the bank said in a statement.
The company also said that it expects bad debts to be lower in the second half of the year.
