The group's chief executive, John Stewart, said its share of net mortgage lending rose in the second quarter and overall the mortgage bank reported net lending of 1.5 per cent during the first half of the year. Woolwich reported slightly higher than expected pre-tax profits for the period.

Woolwich to buy back 150-200 million stg Woolwich reported pretax profits up 12.1 per cent to 240.4 million pounds during the six months to the end of June, up from 214.5 million pounds during the same period in 1997. This was above analysts forecasts of 232-239 million pounds.

The group -- which said it would pay an interim dividend of 3.5 pence per share -- said the first half of the year had seen intense competition in the retail savings and mortgage markets, with its net interest margin "resilient at2.02 per cent."

Since converting to become banks last year, Woolwich and the other former building societies have faced intense competition from the remaining mutually owned home loan providers such as the Nationwide and Bradford & Bingley .

But Woolwich said its diversification strategy was beginning to pay off, with a 21.8 per cent increase in non-interest income to 113.5 million pounds "demonstrating the groups ability to cross- sell successfully to its existing customer base."

It said unit trust and personal equity plan income had risen by 70 per cent, independent financial advice by 42 per cent and funds under management by 58 per cent.