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Wednesday, September 30, 1998 Published at 12:21 GMT 13:21 UK

Business: The Company File

Bank of Scotland nets bigger profits

A bigger share of the mortgage market helped boost profits

A bigger slice of the mortgage market helped to boost the Bank of Scotland's pre-tax profits to £420m in the first half of the year.

The increase in profits, up from £346m last year, emerged against the odds.

Many leading High Street banks have suffered as a result of the strong pound and the crises in Russia and Asia.

Gavin Masterton, the group's treasurer and chief executive, said: "We believe the strategy we have adopted and the improvements we have made over the last few years in positioning our business, will enable us to deal with these uncertainties in a positive, but prudent manner."

The announcement of the higher than expected profits - which analysts had forecast between £415-425m - caused Bank of Scotland's share price to rally 6p to 585p.

Economy on the brink

But he warned that the business market will be less benign in the immediate future.

He said: "The economy is in a high state of nervous tension right now."

The group has slowed its rate of lending growth since the beginning of the year because of the economic uncertainties, he added.

However Mr Masterton said that a downturn could offer the bank the opportunity to make acquisitions.

He added that the improvement in profits had been driven by a 15% increase in mortgage business.

At the end of August the group's UK mortgage market share stood at 6.42% against 6.13% six months ago.

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