British mortgage bank Northern Rock said today it was on track to meet analysts' profit expectations for 2006 after net lending in the first quarter rose 26 per cent from a year earlier.
Britain's eighth-biggest listed bank said it was comfortable that its 2006 post-tax attributable profit will reach £352 million ($612 million), up 14 per cent from last year.
The bank said its total lending pipeline stood at £5.7 billion, up 15 per cent from a year ago and 8 per cent higher that at the start of this year.
Northern Rock said it expected to improve its ratio of costs to income in 2006, having reached 29.8 per cent in 2005, already the best for a UK bank.
It said asset growth would slow to near the middle of its targeted 15-25 per cent range in the next two to three years and that underlying earnings would move towards the mid-point and then above its targeted 10-20 per cent growth range, repeating forecasts made in January.
Northern Rock's profits jumped 14 per cent last year as strong demand for low-risk residential mortgages helped it to make record earnings for the 22nd straight year.
The mortgage specialist forecast the UK gross mortgage market would grow to about £300 billion this year, up from £288 billion in 2005.