British mortgage bank Northern Rock has reported a sharp rise in first-half profits, but has also repeated that British interest rate rises would hold back its 2007 profit growth.
Northern Rock reported an underlying pre-tax profit for the six months to the end of June of £346.6m, including gains on disposals, up 27% from a year ago.
The bank said it expected underlying profit growth to slow to about 15% for the full year due to a rise in funding costs following five UK interest rate rises in less than a year.
Northern Rock gains over 70% of its funding from wholesale markets, making it more sensitive to debt market moves than rivals such as HBOS, which gets about half its funding from customer deposits.
The bank said its share of net mortgage lending was 18.9% in the first half, above its traditional share of 8%, which could lift it above HBOS as Britain's biggest new lender during the period.
It also said the amount in its Irish savings operations now stood at just over £1.6 billion (€2.4 billion), up around 6% from the figure at the end of December. Northern Rock also said that 13,400 - more than half - of its Irish customers now had an internet account
