Growth strategy pays dividends for Alliance & Leicester Commercial Bank

Alliance & Leicester Commercial Bank, the corporate banking arm of the group, delivered a particularly strong performance, with core operating profit increasing by more than a third (39%) to £96 million (from £69 million in the first half of 2006).

All core business areas saw an increase in the first of 2007:

A record 16,600 business banking current accounts were opened, 29% more than in the same period in 2006. At the end of June 2007 the bank had a total of 83,800 active business current accounts.

Commercial lending balances increased to £7.3 billion, a year-on-year increase of 16 per cent, whilst maintaining strong asset quality.

Cash sales increased to £32.9 billion.

Treasury profits increased £3 million to £24 million.

Richard Banks, Managing Director of Alliance & Leicester Commercial Bank said: “These results show that our strategy is working. Over the past few years we have transformed Alliance & Leicester Commercial Bank from a cash handling and money transmission focused business to one which provides market-leading, full service banking and is recognised as a real challenger to the traditional business banks.”

Richard Banks, continued,“We also have ambitious development plans in sectors such as the pre-paid card market, which will enable us to deliver significant growth in the future.”

Alliance & Leicester Commercial Bank has significant expertise in a number of commercial lending sectors, which has enabled it to grow a diversified lending book. Examples of deals in the first six months of the year include financing a number of aircraft for a leading airline, and being part of a syndicate to finance a tanker, the bank’s 150th ship, as well as 37 new coaches for a major coach company and the launch of the bank’s own coach rental fleet. New ventures include the acquisition of a majority stake in a commercial property finance business, Mitre, and the bank’s first equity stake in a Public Private Partnership company in the health sector.

The bill payment network for customers doubled, with the addition of access to the 17,000 strong payzone network outlets in addition to the Post Office network. Other developments include the negotiation of a new cash handling contract with the Post Office.

During the first half of 2007, the bank extended its regional business centre network, opening new premises in Sheffield and Southampton. These centres have delivered good growth, helped develop stronger customer relationships and increased both new account openings and lending balances. In total, the bank now has a network of 11 centres and has announced that it is to accelerate expansion with at least a further nine centres planned to open over the next 18 months. The bank also plans to more than double the number of relationship managers to ensure that the business centres continue to maximise business leads and provide a high standard of customer service.