LONDON, Oct 23 (Reuters) - Tesco Bank said its tradingprofit increased by 15.9 percent to 102 million pounds ($164million) in the six months to the end of August, driven by astrong increase in lending.
The bank, which is owned by Britain's biggest retailer, saidon Thursday customer numbers grew by 13.9 percent compared withthe year before despite greater competition.
Tesco Bank is one of a number of new lenders that haveemerged to challenge Britain's biggest four banks - Royal Bankof Scotland, Lloyds Banking Group, Barclays and HSBC.
Tesco Bank said its mortgage business had grown to 1.03billion pounds at the end of August compared with 697 millionthe year before.
The bank also said it had set aside another 27 millionpounds to compensate customers mis-sold loan insurance.
Tesco Bank reiterated that its profit growth for the fullyear would be offset by investment in its new personal currentaccount service, which was launched earlier this year.
The bank's parent, Tesco, reported a larger than expectedhole in its accounts, forcing it to scrap its full-year tradingprofit outlook. (1 US dollar = 0.6231 British pound) (Reporting by Matt Scuffham)