LONDON (ShareCast) - Half year pre-tax profit rose a weaker than expected 16.8% at Cattles as the sub-prime lender tightened its credit criteria and the squeeze on consumers' disposable income caused arrears to rise.

It posted a profit before tax of £70.2m for the first six months of 2008, up from £60.1m in 2007, but worse than the 36% increase to £82m expected by broker KBC Peel Hunt.

A more careful approach to lending sent acceptance rates down to 5.2% from 6.3% a year ago, leaving volumes up just £2m at £661m.

The money lender also flagged a rise in instalment arrears to 7.2% from 7% at the end of 2007, while customer balances with a proportion in arrears rose to 31.4% from 29.2%.

In a separate statement it said James Corr is to step down as finance director in February next year to spend more time with his family and pursue other interests.

The interim dividend rises to 6.51p a share from 6.20p last time.

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