| HBOS hopes to beat market forecast for FY2005 |
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LONDON: Banking major HBOS Plc. said good growth in its insurance and investment units and tight cost control will help it beat analysts' forecast for the year ending December 2005 of 84.4 pence a share.
The UK's fourth-biggest bank said in a final trading statement for the year that its lending arrears have grown at a similar pace to the first half of the year since June and the bad debt charge for the full year will be in line with market expectations. Analysts had put the bad debt charge of about 1.6 billion pounds, up from 1.2 billion pounds in 2004.
The bank announced that it will return 750 million-pound capital surplus to investors in 2006 through a share buyback programme. This cash return will be in addition to the existing 1 billion-pound plan, out of which the bank had already returned 910 million pounds to shareholders. The bank expects its full-year expenses, excluding investments, to increase by less than 3 per cent.
The economic slowdown in the country had been a cause of concern for the bank with a heavy focus on the country for its business activities. But chief executive officer James Crosby said the bank expected the national economy to return to its growth phase in the next 12 to 18 months and the bank will continue to have tight cost control and measured asset growth during this period to sustain itself.
The bank is bringing down its 800 million-pound pension fund deficit through substantial initial contribution and increased annual contributions over the next five years. It is also targeting "high single digit growth" in lending.
HBOS shares went up 30.5 pence, or 3.5 per cent, to 897.5 pence a share in early trade in London, its biggest gain since December last year.
The bank had restated its accounts for parts of its business for the half year, after it had opted for a new organizational structure. It is expected to publish the results on 1 March 2006.
Posted
on : Tue, 06 Dec 2005 16:15 GMT | Banking News
By : Mike Lawson
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