Mortgage lending rose 32% to £3.46 billion, while deposits remained constant at £2.2 billion. Mortgage arrears (3 or more missed payments) remained around one tenth of the industry average at 0.08%.
The bank also reduced further its cost income ratio from 54% to 43% through system improvements and further economies of scale.
Graeme Hartop, Managing Director of Scottish Widows Bank, who has now completed his first full 12 months in charge said: "Last year was an extremely eventful year and contained many challenges, including the move to statutory regulation under the FSA for mortgages. However, our underlying strategy of providing consistently competitive products and excellent customer service from a low cost base is paying dividends.
"The introduction of mortgage regulation was a huge focus for the industry in 2004 and I am delighted that such a major project has been implemented extremely successfully, while not deflecting us from our development plans. Although the mortgage market in general has slowed over the last six months we are confident that our mix of innovative products, focus on customer service and our growing stature in the Independent Financial Adviser and Mortgage Intermediary market will continue to deliver results.
"The retail deposit market remained extremely competitive with a number of new entrants and existing providers paying loss leading rates, despite this our deposit book remains strong. We will, however, continue with our strategy of paying consistently competitive rates for those seeking a good deal over the longer term.
"The last 10 years have proved extremely successful, having delivered cumulative profits before tax of over £60m over this period and Scottish Widows Bank is making a real financial contribution to Scottish Widows and the wider Lloyds TSB Group. I am confident that with our product offering, we will be able to increase this contribution over time”.
