Andy Hornby's first move, 24 hours after taking over as chief executive of HBOS at the age of 39, was to rubbish suggestions that his ambitions may include a dramatic bid to transform Britain's biggest mortgage lender.

Presenting half-time results for the merged Halifax and Bank of Scotland, Mr Hornby stressed that in every category of financial activity except mortgage lending HBOS's share of the UK market was less than 20 per cent, providing ample opportunities for organic growth.

"I believe in the basic maxim that acquisitions are guilty until proven innocent," he declared.

"I am not looking at anything at all. Today's results show with real clarity that organic growth is the absolute core of what we are about and I have no intention of changing that."

HBOS reported underlying profits 13 per cent ahead at £2.612 billion. A 15 per cent gain in earnings per share is matched by an identical rise in the interim dividend for HBOS's 2.2 million shareholders to 132.5p.

Despite that - and despite a started intention to step up the share-buy-back programme to 500 million shares in the second half of this year, to match the first six months - the shares slipped 2 p to 9721/2p.

Birmingham Midshires, HBOS's specialist ending subsidiary, had its biggest ever month for mortgage applications in May, when they totalled £2.483 billion.

Its total mortgage assets are now approaching £40 billion.

"This is a very strong first-half performance for Birmingham Midshires," said Nigel Stockton its managing director.

"We have embedded our position as the UK's number one specialist mortgage lender. And we are really beginning to establish ourselves as one of the top direct savings banks in the UK."

The performance is down to our people. BM colleagues are on track for a healthy bonus at the end of the year and we are delighted that our people can share directly in our success."

HBOS's share of net UK mortgage lending bounced back to 21 per cent, from 11 per cent in the second half of 2005, all-but in line with its 22 per cent share of the stock of existing mortgages. This success was partly due to a drive to keep borrowers, who might otherwise haver switched to another mortgage lender.

Some analysts, though, were disappointed that the retail operation's profit was only four per cent higher at £1.133 billion.

Losses from "impaired" loans rose to £592 million from £470 million in the first half of last year, entirely due to unsecured loans turning bad.

Mortgages account for 93 per cent of HBOS's retail lending and the percentage of these considered "impaired" dipped to to 2.07 per cent from 2.21 per cent at the end of 2005.

The equivalent for unsecured loans was 13 per cent, up from 11.51 per cent.

Shares closed down 2p at 972.5