Bradford & Bingley shocked the market last week with its profits almost halving after it cut the value of risky assets.
Underlying pre-tax profitfell to 126m in 2007 from 246.7m in 2006. The newsled to a 10 per cent fall in the firm’s share price.
B&B claims that if it stripped out “unusual and extreme external events”, then underlying profits rose by5 per cent to 351.6m.
Items excluded from the underlying profit include a loss on sale of commercial and housing association portfolios of 58m, treasury asset impairment of 94.4m, hedge ineffectiveness of 23.5m and other fair value movements on treasury instruments of 49.7m.
The company says that bad debt charges on its residen-tial mortgage book trebled to 22.5m in 2007.
The number of mortgage borrowers in arrears by three months or more has increa-sed by 42 per cent to 6,170.
But B&B maintains maintained it faced no funding problems and had 2bn of agreed credit from banks. It also says that customer dep-osits funded 60 per cent ofits loans.
Group chief executive Steven Crawshaw says: “These results demonstrate the strength of our underlying business, which has performed well in a challenging year for the sector.
“With significant funding in place and our savings business continuing to attract new money, we are confident of our ability to continue to be a leading player in the specialist lending market.”