24% fall in profits for HBOS

by David Masters

Story link: 24% fall in profits for HBOS

Halifax Bank of Scotland (HBOS) has announced a 24% decrease in profits for 2007, down to £232 million. The company said that this reflects a £135 million in loss resulting from the UK floods, and wished the emphasise its growing strength in the household business.

Premiums fell by 1% to £1.76 billion whilst the number of policy holders increased by 26% to 2.8 million. The company’s motor accounts rose by 12% to £355 million, and its household accounts were up 5% to £549 million.

Combined ratio was 90%, 8 percentage points higher than in 2006. However, the company said that was it not for the UK floods, the ratio would have stayed level.

HBOS said of the results: “Growing our share of the household insurance market is an important strategic priority allowing us to leverage our market leading mortgage position.

“We have therefore increased our investment in sales and marketing activity to raise product and brand awareness, supported by some highly successful promotions.

“Strong price competition has continued, although we are starting to see some signs of price increases in the UK market.

“With the strength of our brands, we believe these price increases will provide an opportunity for significant growth in market share.”