Halifax Bank of Scotland, the country's fourth largest banking group, is on course to deliver annual profits of more than £5 billion.
HBOS said yesterday it was "comfortable" with analysts' forecasts that underlying profits for 2006 would rise to £5.2 billion from £4.8 billion last year.
Its comment held no surprises for the City and shares in the £3.5 billion company fell in early trading as analysts expressed disappointement that the group was not doing even better.
HBOS finance director Phil Hodkinson said: "I would be disappointed if we were unable to deliver full-year results in line with consensus, or even marginally ahead."
HBOS is set to benefit from strong sales of savings and investment products, while group costs are expected to grow by no more than its target rate of 5.7 per cent, Mr Hodkinson added.
His comments, made to City analysts, came as the bank - the UK's largest mortgage provider - said its performance in the first half of the year was "robust".
HBOS said in a pre-close period trading statement that its share of the net mortgage lending market was running at a similar rate to the first half of last year when it hit 17 per cent.
In April, HBOS signalled that its share of new mortgages early this year had returned to within its 15 per cent to 20 per cent target range.
It came after its share dropped in the final quarter of last year as the company focused on profitable lending rather than chasing growth.
HBOS received a boost on Tuesday when figures from the British Bankers' Association and Council of Mortgage Lenders both showed that May was a bumper month for lending as the housing market showed signs of a renewed recovery.
The bank said bad debts were "in line with market expectations".
And it added that sales of its investment products were strong, while business was "very encouraging" in its international division.
The positive news from HBOS followed a similarly bullish update from Lloyds TSB earlier this week as the banking sector enjoyed a strong start to the year.
The Edinburgh-based company, which was created by the merger of Halifax and Bank of Scotland in 2001, has 22 million customers in its core UK market.
Barclays Stockbrokers analyst Neil Cooper said the statement contained "few surprises".
But others said they had expected HBOS to report a bigger growth in its share of the mortgage market in the light of Tuesday's statistics.
Analysts at Keefe, Bruyette & Woods, said the trading update was less positive than they had expected.
"The statement was short and featurless, and as such, may be modestly disappointing," they said in a note to clients.
While JP Morgan said the numbers confirmed expectations, DKW said HBOS looked set to maintain its position as the best performing UK bank over the last 12 months.
It added that the trading statement "firmly refutes" worries that HBOS had gone ex-growth.
Shares closed down 14.5 at 938.5p.