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Alliance and Leicester has said that its annual core operating profit is likely to be within the top range of current forecasts, as Britain's seventh-largest bank looks to the future with a new chief executive.

In a statement the group announced that its finance director David Bennett will replace current chief Richard Pym, who stands down on July 27th.

A separate trading update issued by the bank stressed that its revenue growth rate for the first half of 2007 was likely to be "significantly higher" than that achieved in recent years as a result of a growth in core products and a more stable net interest margin.

The margin, which measures the difference between interest charged to borrowers and that paid to savers, was slightly lower in the first three months of the year than the 1.3 per cent recorded for the whole of 2006.

Alliance and Leicester also revealed that during the quarter residential net mortgage lending totalled about £1 billion, giving it a 3.9 per cent share of the UK market – higher than its 3.5 per cent share of UK mortgage balances.

The bank has also increased its presence in the sub-prime lending market, with its agreement with Lehman Brothers over the provision of specialist mortgage products raking in more than £80 million of new lending during the first three months of 2007.

Unsecured personal loan gross advances reached £802 million in the first quarter, up on the same period in 2006, but Alliance and Leicester stressed that fewer balances were in arrears compared to the end of last year.

The bank therefore expects bad debts on unsecured lending to be lower over the first half of 2007 when compared to the same period in 2006.

In a generally upbeat statement, Alliance and Leicester also predicted that its costs for the first six months of the year are likely to be slightly lower than the £358 million reported in the latter half of last year.

Commenting on his appointment as the bank's new chief executive, incoming boss Mr Bennett said he intended to ensure that the "growing momentum" of the group "continues at pace".

"Alliance and Leicester has a great management team and I have every confidence in the group's continuing and growing success," he said.