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Alliance & Leicester (A&L), the second-worst performing UK bank stock in 2007, has said full-year profit will be lower than previous estimates.

In a statement issued today, the bank confirmed its operating profit would have surpassed the £598 million consensus estimate of financial analysts but for a charge on credit-related securities.

However the charge against Treasury investments means that "core-operating profit will be lower than the current range of analyst forecasts".

The change in fair value and Treasury impairments totalled £55 million at the end of October.

"We have continued to manage our funding requirements successfully during the second half of the year through a combination of raising new funds or rolling over existing funding as it matures," the statement added.

While shares in the bank have fallen this year after concern that the company may require central bank aid to fund new customer loans, its stock has risen of late, up 12 per cent to 713.5 pence at 08:09 GMT.

Some 57 per cent of its customer loans were funded by customer deposits as of the end of October, the statement confirmed, adding that "additional funding facilities" have been installed to "pre-fund" medium term financing and commercial paper maturing.

David Bennett, group chief executive, explained: "Recognising the unprecedented conditions in the world's financial markets, we have pre-funded our maturing medium-term funding, commercial paper and certificates of deposit into the third quarter of 2008."

He added: "Alliance & Leicester continues to deliver good franchise growth, cost control and strong lending asset quality, and we continue to offer great value to our customers."

Northern Rock is the only constituent of the nine-member FTSE 350 Banks Index to have performed worse than Alliance & Leicester this year.