The Skipton Building Society has reported lower profits for the first six months of the year.
Group profits before tax were £72.1m, compared to £90.0m for the six months ended 30 June 2014 and included a charge for the Financial Services Compensation Scheme (FSCS) levy of £6.8m.
Underlying Group profits before tax were £78.2m, compared to £84.7m over the same period in 2014.
The mutual said the reduction in underlying profitability was largely due to an increase in costs and loan impairment provisions in the mortgages and savings division, the latter mainly as a result of changes made to its credit risk loan impairment models, together with a reduction in profits from Connells, its estate agency division, following the slowdown of the housing market in the second half of 2014.
Pre-tax profits in the mortgages and savings division were £49.1m.
Gross mortgage lending in the six months amounted to £1.9bn, up from £1.5bn in the first half of 2014, an increase of 31%. The average loan-to-value (LTV) of the society’s new lending was 66% and the maximum permitted LTV remained at 90% for residential mortgages and 75% for buy-to-let mortgages. During the six month period 95% of lending was introduced through intermediaries and 9% was on buy-to-let products.
Net mortgage lending, being the growth in mortgage balances, amounted to £1.0bn during the first six months of 2015, compared to £0.6bn for the comparative period in 2014 and £1.3bn for the whole of last year. T
The number of group residential mortgages in arrears by three months or more has fallen further to 1.00%, comparing favourably to the Council of Mortgage Lenders’ industry average of 1.30% for residential mortgages in arrears by more than three months.
David Cutter (pictured), Skipton’s group chief executive, said: “I’m delighted to report that Skipton has had another strong start to the year. It is very pleasing to see a continued growth in our membership, and that our gross mortgage lending increased by nearly a third, with continued strong growth in both mortgage and savings balances, and further upgrades from two ratings agencies.
“The society is in robust health and we are on course to deliver another strong and balanced performance for the full year.”