Co-Operative celebrates mortgage success

The Co-operative Bank has reported a surge in mortgage lending during the first-half of the year.

The bank announced that total loans and advances to customers leapt to £7.4 billion over the first six months of 2004, up from £5.2 billion during the same period last year.

However, the Manchester-based firm also revealed that profits had dipped for the first time in 10 years.
Interim pre-tax profits fell 6.9 per cent to £70.1 million, against £75.3 million for the same period last year.

Chief executive Mervyn Pedelty highlighted the growth of the company's mortgage business after the bank moved back into the mortgage market in 2001. He insisted that the short-term costs of building the lending business had affected profits, but had helped the Co-Op develop a more secure balance sheet in the long term.

The bank has expanded its range of mortgages to include variable and fixed-rate home loans but has deliberately avoided the riskier, high loan-to-value end of the market.

The Co-Op, which has 65,000 mortgage accounts, said there were indications that high interest rates were starting to slow down the market and noted that it had seen an overall drop nationally of 20 per cent in mortgage applications over the last couple of months.

The Co-op employs more than 4,200 staff at 100 branches in the UK, and has two million customers. The bank has an "ethical" strategy of investing in companies involved in fair trade or social enterprise, and avoiding companies which damage the environment.
© DeHavilland Information Services plc