British specialist mortgage lender Bradford & Bingley just beat analysts' forecasts with an 8% rise in annual profits on Tuesday as it reported record lending in a buoyant housing market.
B&B, Britain's ninth-biggest listed bank, said underlying pretax profit rose to 336.1 million pounds ($653.9 million) in 2006, from 310.1 million pounds a year before and ahead of an average forecast of 333 million pounds from Reuters Estimates, based on a poll of 20 analysts.
The bank said its net interest margin slipped to 1.19% last year, from 1.21% in 2005 but just above a forecast of 1.18% from analysts polled by the company.
B&B said it started 2007 with a record pipeline of new business and strong trading had continued in the first few weeks of the year.
It reported record gross new residential lending last year of 10.3 billion pounds, up from 7.2 billion in 2005.
Its net new residential lending last year was 5.1 billion pounds, up from 2.7 billion the year before. It said its market share of net lending was 4.5%, well up from 2.7% in 2005 and the bank's traditional market share of 2.9%.
B&B has transformed itself in recent years into a specialist lender and shifted away from mainstream mortgages, where it lacked scale. It is now the biggest UK buy-to-let lender, with about 20% of the market.
It said it expects house price growth to moderate to 5-7% this year, but predicts buy-to-let lending will outpace the mainstream market due to a healthy rental market as tenant demand keeps rents rising.