Alliance & Leicester has made an update on the London Stock Exchange in a bid to calm investors’ fears over its exposure to the US sub-prime crisis.
This comes just a week after A&L head of specialist mortgages Jeremy Claridge told Money Marketing that lenders must be more open about their exposure to the US sub-prime crisis and that the market is spooked because lenders have not been open enough.
A&L says it has invested about £390 m in a variety of structured investment vehicles although it says that only a small proportion was exposed to potential losses.
The bank also said it was operating a conduit facility totalling about £770m, invested in a variety of structured credit assets, including collateralised debt obligations and collateralised loan obligations.
A&L says its exposure to highly structured credit products containing US sub-prime mortgages was £175 million. A&L added: “Current conditions in the funding and liquidity markets have had no material impact on either profits or franchise growth.”