Bradford & Bingley has seen its pre-tax profits grow by four per cent, it was revealed today.

The firm, which last week announced it was to break a 150-year-old tradition and move its head office from Crossflatts, Bingley, to London, also says it believes the housing and mortgage market are set to slow.

It has seen profits before tax rise to £135 million from the £129.8 million it made for the same period last year.

The firm, which has also been linked in merger rumours with Barclays, also revealed in its interim results that it has cut costs by 3.5 per cent to £220 million.

Christopher Rodrigues, group chief executive, said: "Our first half performance provides further evidence that we are delivering on our strategy of offering choice and advice in financial services and growing our selective lending and property businesses."

More than a million small shareholders will receive interim dividend cheques of £12.25.

But shares in the bank were down 10p at 330p in early trading on the London Stock Market today, reflecting a 75-point fall overall in the Footsie.