Alliance & Leicester reveals further losses from crunch

14 May 2008

Alliance & Leicester has reported further losses caused by the credit crunch as well as a rise in the value of unsecured loans in arrears.

The lender revealed the state of its loan book in a new report in which it was disclosed that it has been hit with a further £391 million hit.

The value of unsecured loans in arrears rose by £2 million, with the proportion of unsecured balances in which repayments are over 30 days in arrears up from 5.5 per cent to 5.65 per cent.

Meanwhile, the bank, which is Britain's seventh largest, also reported a rise in the number of mortgage accounts over three months in arrears by 300 between January and April to take the total to 2,650.

As a result of the increase, Alliance & Leicester is likely to spur the bank to further tighten its lending criteria, in particular for those with blemishes on their credit records, in a bid to restore order to its balance sheet part.

However, these borrowers can still secure credit through unsecured loans, such as tenant loans and urgent loans, with non-mainstream providers.