First National Building Society has reported a 12.75 per cent rise in pre-tax profits to £10.9 million in the six months to the end of June, benefiting from continued strong growth in its core mortgage business. Its interim figures, issued yesterday, show the group advanced £284 million in new loans over the six-month period compared with £240 million in the first half of 1996. Its deposit base has also expanded strongly with its share account and deposit account base up by £243 million to £2.36 billion at the end of June.

Its treasury business also recorded solid growth realising an investment surplus of £1.079 million against £640,000 in the first half of 1996.

The building society showed a marginal improvement in its cost/ income ratio dropping from 69.7 per cent to 69.1 per cent in the first six months of 1997. Group managing director, Mr John Smyth, said the strong results had been achieved across its core business area, with its markets in Ireland, Northern Ireland and Britain performing well. In Britain, its Mortgage Trust subsidiary advanced £82 million sterling (£87.2 million) in new loans over the six months, against £57 million sterling in the same period last year. Margins in its British mortgage business have improved as it has increasingly moved away from discounted lending.

It has also consolidated The Mortgage Corporation business, purchased in 1996, with Mortgage Trust and both companies are working from the same location in Surrey. "The outlook in Britain remains positive. The UK economy continues to improve and further progress is expected," Mr Smyth said.

In Northern Ireland, its latest acquisition, the Cheltenham & Gloucester, also made substantial progress in the first half of 1997, he said.