Alliance & Leicester - one of UK banking's weakest performers - has reported half-year profits to 30 June of �252m.

This compares with �247m last year, and executive chairman John Windeler said the results were good in spite of difficult market conditions.

But A&L shares have halved in value over the past year, and the latest results show nothing to suggest that the situation is likely to improve.

One of the UK's smaller mortgage lenders, A&L has struggled in an increasingly competitive market and been regarded as a potential takeover target since its failed merger with Bank of Ireland last year.

"These are not thrilling figures, but they are bang in line with expectations," said banking analyst Hugh Pye at Robert Flemings.

"Given that the stock is a bit oversold, I would hope we would see a bit of a bounce," he said.

Future plans

A&L has unveiled a restructuring plan this week.

It is aimed at improving customer focus, cutting costs and boosting revenues.

The bank said it would try to grab a slice of the small business banking pie dominated until now by the top four high street banks.

A&L also said it would launch an internet banking arm in the fourth quarter of this year - lagging behind key rivals such as Abbey National's Cahoot.

Analysts saw the proposals by new managing director Peter McNamara, a former Lloyds TSB director, as helping the bank either fend off an unwanted bid by a rival or at least command a good price for its shareholders.

The company's share price has lagged the FTSE All Share Banks Index by roughly 30% so far this year.

Competition in the UK savings and mortgage markets over the past year has intensified, made keener by the growth of online banking services.

A recent cut in mortgage rates by HSBC's UK retail bank prompted expectations of a price war in the industry.