Bradford & Bingley Group Interim Results 2002

Bradford & Bingley plc today issued its interim results for the half year ending 30 June 2002. These results demonstrate the Group’s strategy of expanding financial services retailing and growing its selective lending and property services businesses is proving successful. Our 14% increase in the interim dividend reflects our confidence in our continued success.

Financial highlights

• Profit before tax and exceptionals increased by 4% to £135.0m (H1 2001: £129.8m)
• Net interest margin of 1.85% (year-on-year reduction contained to 0.03%)
• Costs down 3.5% to £220.0m
• Return on equity (before exceptionals) up to 15.1% (H1 2001: 14.3%)
• Underlying earnings per share improved by 11% to 14.3p (H1 2001: 12.9p)
• Interim dividend of 4.9p per share, up 14% from 4.3p in H1 2001

Business highlights

• £320m added to managed lending assets in the half year
• Strong specialist lending growth with balances up 19%
• Savings business stabilised with net cash inflow in the half year to June
• Distribution profits increased by £10.6m to £14.7m compared to H1 2001
• Financial services revenues increased by 11% to £73.2m
• Property services revenues up 8% to £56.8m (from a reduced branch network)
• Adviser base up 8% to 1,015 (936 at year-end)
• Bad debt provisions are flat year-on-year
• Capital management on track with 12m shares repurchased (at a cost of £37.9m)
• Issued £150m innovative tier 1 capital and repaid £100m of subordinated debt

Board changes

Roderick Kent will be appointed to the Board as a non-executive Director in September 2002. Mr Kent will become Chairman on the retirement of Lindsay Mackinlay in November 2002. A separate announcement has been issued today regarding this appointment.

Commenting on these results, Christopher Rodrigues, Group Chief Executive, said:

“Our first half performance provides further evidence that we are delivering on our strategy of offering choice and advice in financial services and growing our selective lending and property businesses. Our lending balances are growing and our distribution business is starting to make a significant contribution to the bottom line.

Our strategy means we are well positioned to capitalise on the opportunities a changing regulatory environment will present. Our low risk business is focussed on secured lending in the UK with conservative provisioning and strong credit quality.

Looking to the full year, we remain comfortable with the market's expectations, despite our belief that both the housing and mortgage markets may slow, and the investment market will remain challenging.”

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