mortgage bank Northern Rock said yesterday it was on target to meet growth expectations for 2006.

The Newcastle lender is on track to increase profit by about 15 per cent and assets by about 20 per cent in the year.

Britain's eighth biggest listed bank said it was comfortable that its 2006 post-tax attributable profit will reach £352m, which it said was the consensus forecast from 19 analysts, up 14 percent from last year.

"We have started 2006 strongly, with lending performance and pipeline ahead of the good numbers of the comparable period last year," said chief executive Adam Applegarth.

"We are comfortable that we are again set to deliver against all our strategic targets in 2006."

In a trading statement for the three months to March 31 Northern Rock said net lending had risen 26 per cent from a year earlier and its total lending pipeline - or deals waiting to be finalised - stood at £5.7bn, up 15 per cent from a year ago and eight per cent higher than at the start of this year.

It said UK economic fundamentals were sound and forecast the UK gross mortgage market would grow to about £300bn this year, compared to £288bn in 2005.

It also said that the end of 2005 and start of this year had seen a small but encouraging increase in first time house buyers, which it expects to continue.

Northern Rock, which employs about 4,000 in the region, announced plans in August to develop a £60m office complex at Rainton Bridge, Sunderland.

The 380,000 sq ft campus, with a gym, restaurant and shops, would see 1,000 jobs transfer from Northern Rock's call centre in Sunderland's Doxford International Business Park and create a further 2,500 jobs.

The group is also increasing the size of its Gosforth headquarters, which, in the long-term, will create another 1,000 jobs.

But developments at Rainton Bridge have been delayed because of an Article 14 order, preventing a planning decision, that has been put in place by the Highways Agency over fears that North-East roads cannot cope with the expansion.