In the first half of this year, A&L boosted its commercial lending, won thousands more new small and medium-sized business customers and got involved in Private Finance Initiative (PFI) contracts. It had a small wholesale business even before it became a bank in 1997, but it announced two years ago that it would build this up with a focus on cash sales to banks, commercial lending (especially where asset quality is high), business banking and treasury operations.
It is a diversification strategy that makes sense at a time when UK consumer demand has slowed and retail banking is in the doldrums. Richard Pym, A&L’s chief executive, explains: “With only a minor exception, the banks that grew their profitability in the first half of this year were those that were growing from their overseas or investment banking operations. The profitability of UK retail banking in most of the large institutions was flat or slightly down, and our performance was very much in line with the market.”
