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Halifax Bank of Scotland today unveiled plans to expand in the south of England by opening 100 new branches over the next five years, creating 1,500 new jobs.
The news came as HBOS - the UK's biggest mortgage lender - reported a pre-tax profit of £4.8bn for 2005, a 17% rise on the previous year.
However, the bank also reported a 28% rise in bad debts on its loans, representing 2.37% of advances.
HBOS, created by a merger between the Halifax and Bank of Scotland, said the economic background to trading in the UK remained encouraging, although consumer spending and inflation pressures were still subdued.
"Despite recent indications to the contrary, we continue to expect interest rates to fall further," HBOS said. "Growth in the economy should quicken later in the year, ensuring that employment prospects will remain robust."
HBOS said most of its new bank openings - the largest network expansion by the Halifax since the 1970s - would take place in the south of England and London, where it has less of a presence than its rivals.
"Branches are at the heart of retail banking. We need more branches in the south of England, and now we will have them," Andy Hornby, who replaces James Crosby as the chief executive in April, said.
"The right branch coverage really helps us to deliver our market share targets. This is a big opportunity for us to continue to win customers from the big four banks."
The first new Halifax branch will open in Cannon Street, in the City of London, and will be one of 12 branches to open this year.
The decision to open new branches reverses the trend of recent years, when big banks such as Barclays and HSBC announced a raft of closures.
Halifax currently has approximately 1,000 branches and estate agencies across the country. The expansion adds up to around a 15% increase in its presence in the south of England.
Around 50 of the branches will be in towns where Halifax has had little or no presence. The other 50 or so will involve existing branches moving to bigger and better locations in the same towns. Each branch will have approximately 19 banking staff, including mortgage and investment advisers.
The branch opening programme, the biggest of its kind in the UK banking sector for many years, will take place despite the growth of internet banking.
"People want both," said Jason Clarke, an HBOS spokesman. "They want branches where they can talk to people and the convenience of online banking when they can log on out of hours. The two feed off each other."
HBOS said its branch expansion underlined its commitment to achieving its medium term market share target of 15%-20% in all its core retail markets, especially current accounts, savings and investments.
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