A&L profits almost wiped out

Half-year profits at Alliance & Leicester have slumped to £2m from £290m for the same period last year after the bank was forced into massive write-downs triggered by the global credit crisis. But the mortgage lender claimed its core business was still in "good shape".

The A&L write-down was slightly greater than it had itself predicted, at £209m instead of £192m. But A&L said the quality of its mortgage and unsecured personal loan books remained strong with little increase in the number of accounts in arrears.