A&L ready to beat profit forecast

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Alliance & Leicester has said its full-year profits will beat market forecasts thanks to "slightly higher" revenues and reduced costs.

The bank estimates it will exceed operating profit forecasts of £506m for 2005. Last year's figure was £526m.

It added that operating costs would be well below the £714m seen in 2004.

Despite challenging trading conditions, Alliance said its share of the net mortgage market had risen to 4.1% from 2.4% a year earlier.

Strong business banking

Alliance & Leicester said mortgage arrears remained steady at around the 0.68% level seen in 2004.

Personal lending had risen despite the fact it had raised the credit score needed to approve loans.

Business banking was particularly strong, with new account openings growing by more than 50% compared to the same period last year, it added.

The company's share price rose 2.5% on the London market in early trading.