Alliance and Leicester reveals further sub-prime hit with the value of assets, including investments backed by sub-prime mortgages, dropping to £185 million.
In an unscheduled trading update Tuesday, the commercial bank and mortgage lender said that its £55 million charge revealed in October had risen to £185 million, for the year ended 31 December 2007.
Most of the increased loss came on A&L's investments in mezzanine and capital notes in structured investment vehicles (SIVs), A&L said.
The restructuring of a number of SIVs in which A&L had holdings had incurred losses, it said.
Balance sheet
A&L said there would be a £147 million post-tax charge against its balance sheet reserves, although this did not affect the group’s regulatory capital.
The lender said that underlying profits were expected to be in line with its November guidance to exceed consensus forecast of £598 million for 2007, compared with £585 million in 2006.
A&L also informed investors that chief executive David Bennett is on temporary leave of absence due to illness. Finance director Chris Rhodes has been named as acting CEO.
The group will announce its preliminary results for 2007 on February 20, 2008.
January 29, 2008
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