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Halifax profit rises
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February 20, 2001: 3:26 a.m. ET
Bank relies on new products for growth, cuts mortgage rate
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LONDON (CNN) - Halifax, Britain's biggest mortgage bank, said full-year profit rose almost 10 percent thanks to growth in insurance and savings products.
Net income rose to £1.17 billion ($1.7 billion), or 52.3 pence a share, from £1.06 billion, or 46 pence a share, a year ago.
The bank said its share of new mortgages granted in the UK rose to 10 percent from 6 percent in 1999.
Group net interest margin – a measure of a banks profitability from lending -- declined to 1.76 percent from 1.92 percent.
Halifax is moving away from its traditional dependence on the lower margin mortgage market, where it has a 19 percent share of outstanding home loans.
As an indication of the tough competitive conditions in the home loans market, Halifax said on Tuesday it would cut is base lending rate to 6.75 percent from the current 7.5 percent level.
The bank has diversified towards more profitable long-term savings products. As part of that strategy it bought financial services firm St James's Place last year and recently clinched a deal to buy the assets of failed life assurer Equitable Life.
"One consequence of the St. James's Place and Equitable transactions is that we now expect diversified businesses to account for more than half of the profits in 2001," said chief executive James Crosby in a statement.
Pretax profit rose 7 percent to £1.71 billion for 2000, while analysts polled by Reuters forecast earnings of between £1.65 billion and £1.72 billion. 
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