NS&I posts profits rise of 14 per cent

The Government-backed bank National Savings & Investments posted a 14 per cent rise in its annual profits yesterday, boosted by a successful advertising campaign fronted by the star of The Apprentice, Sir Alan Sugar.

The company also unveiled plans to team up with WHSmith to promote its products. From November, the high street retailer will begin carrying application forms for premium bonds and NS&I's savings accounts in 400 of its stores.

NS&I's net financing - its total contribution to the Government - rose by £700m to £5.56bn in the year to 31 March, on the back of an 18.2 per cent rise in sales to £14.17bn - hitting its five-year target a year early. It now has funds under management of £78.9bn - up 7.6 per cent on last year.

Sales of products over the Post Office counter fell during the year, as savers moved online. Internet sales almost doubled to £2.43bn, while telephone sales rose by more than 28 per cent to £2.16bn. Value Added - the difference between NS&I's running costs and the cost of raising finance through the sale of gilts and Treasury Bills - rose almost 30 per cent to £337m.

As well as its advertising campaign, NS&I attributed its success to the introduction of five £1m premium bonds to celebrate the product's 50th anniversary. It also sponsored several events, such as The Chelsea Flower Show and BBC Proms in the Park.

Jane Platt, NS&I's chief executive, said: "In the past year we reached some major milestones, achieving our Net Financing goals in four years, rather than five, and very nearly attaining our five-year target for Value Added, demonstrating the robustness and appeal of our products. The new marketing partnership with WHSmith ... means we have an additional retail channel to work alongside our strong and long-standing partnership with the Post Office. This is an exciting time in NS&I's development and means we can reach a wider audience in WHSmith stores across the country."