Julian Hodge Bank Report Profits Of GBP20.4 Million

Wed, 09 Jan 2008

The Julian Hodge Bank has reported record pre-tax profits, but warned that the impact of the global credit crunch will continue to affect financial markets for sometime.

The Cardiff-based bank, whose funding is financed mainly through retail deposits, revealed an increase in profits by 27 per cent to £20.4m for the year (ended October 31, 2007).

Meanwhile profit on continuing activities rose by 3 per cent to £16.9m, aided by the bank’s sale of Hodge Insurance Brokers for £3.5m.

Speaking at the bank’s fourth annual review, Chairman John Mitchell said: "Our core businesses, Commercial Lending and Hodge Equity Release, performed well ahead of expectations with loans and advances to customers growing by 20 per cent to £366m even allowing for the sale of £40m of mortgage assets to other financial institutions."

Mr Mitchell said commercial lending enjoyed record profitability with end of year figures showing a 9 per cent increase in lending balances to £219m.

The bank’s Equity Release products generated sales of £89m, with its flexible mortgage product achieving a 44 per cent increase in sales (£45m) over the previous year.

The Chairman added: "Hodge Equity Release concluded its first sale of £30m of flexible mortgage assets in July 2007 and, at the end of the financial year, had £101m of mortgage assets under management for other financial institutions and a further £155m remaining on balance sheet."

Commenting on the sub prime mortgage crisis, Mr Mitchell said: "This year is likely to be characterised by uncertainty and the ‘credit crunch’ will almost certainly remain with us for a significant part of the year – meaning that consumer access to credit will be restricted and this should curtail economic growth."

"Accordingly we are well placed to build on our success of this year by benefiting from a strong balance sheet, a high-quality asset portfolio and an enviable liquidity position," he concluded.
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