Bad debts hit result at C&G

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The Independent Online
CHELTENHAM & Gloucester Building Society managed to increase operating profits by a third in 1992. However, provisions for bad debt pushed after-tax profits down by a third to pounds 86.5m, writes Vivien Goldsmith.

The black spot in the results was the pounds 90m set aside against bad loans, split between loans inherited from Portsmouth Building Society and commercial loans. Andrew Longhurst, chief executive, said this was a one-off charge. 'By comparison with the industry as a whole, and against other large societies, C&G's core mortgage book remains strong.'

C&G increased its share of the mortgage market to 3.9 per cent, but lending dropped by 36 per cent to pounds 2.3bn. Around 40 per cent of new loans are now taken out at fixed rates.

Net retail funds were pounds 235m down at pounds 474m, but this is still one-and-a-half times the total net inflow to all building societies.

C&G pushed its costs down from 68p to 63p per pounds 100 of mean total assets.