British mortgage lender HBOS said today that full-year profit before exceptional items will "comfortably exceed" market forecasts after trading beat expectations.
HBOS also announced it will buy back up to £750 million ($1.44 billion) of shares next year.
Cost growth for the year is below the bank's target of 5 per cent and its profit margin is better than expected, HBOS said. Asset growth for the year will be about 10 per cent , with deposit growth higher, it added.
The bank put the analyst consensus forecast for 2004 full-year pretax profit excluding exceptionals at £4.56 billion, up 17 per cent from 2003. HBOS shares rose 2.1 per cent to 776 pence yesterday.
The stock has gained 5 per cent this year, making it the third-best performer of the United Kingdom's 10 listed banks and the top performer in the past month.
HBOS is the latest British bank to update the market on its performance in 2004 ahead of full-year results and has produced the most upbeat statement of Britain's big lenders.
Britain's banks have been buoyed by a mortgage and consumer boom that is now slowing and investors are looking for comments on the outlook for 2005.