Directors' report

Business review - Our strategy

Experts in specialist mortgage lending

In each of our markets we are creating lasting sources of competitive advantage that will make us the leading provider of specialist mortgage products. These sources of advantage extend across our whole business.

Understanding and meeting customer needs

Changing customer needs are driving growth in our core lending markets. We have been offering specialist lending products for many years and our understanding of customers, together with our skills and experience in product design and underwriting, are core strengths of the business.

During 2007, we continued to make significant investments in our product capabilities by further investing in people, systems and infrastructure. This includes extending the product design teams, credit analysis and modelling and customer information that will allow us to stay at the cutting edge of product development in our chosen markets.

Specialists in mortgage distribution

The majority of our new business is distributed through mortgage intermediaries under our Mortgage Express brand. We have a long established record of driving mortgage origination growth through this channel. Throughout 2007, we have made significant improvements in our intermediary service proposition which will further enhance our position as one of the industry's leading intermediary lenders.

In addition to organic mortgage origination, during 2007 we continued to acquire prime mortgage portfolios under agreements with GMAC-RFC and Kensington Mortgages. While this activity slowed during the second half of the year, it remains a valuable alternative distribution channel for us.