Skipton Building Society has reported a significant rise in pre-tax profits for the six months to 30 June 2014.
Pre-tax profits were £90.0m, an increase of £61.7m from £28.3m for the six months ended 30 June 2013.
The core Mortgages and Savings division increased its pre-tax profits by £39.1m, to £51.3m from £12.2m (year ended 31 December 2013: £51.5m), and was the major driver of the increase in overall Group profitability. This was due to the margin earned on higher mortgage balances and lower funding costs, and the reduction in impairment losses.
Gross residential mortgage lending in the six months amounted to £1.5bn, up 34% from £1.1bn in the first half of 2013 and compared to £2.4bn in the whole of 2013.
Net residential mortgage lending, being the growth in mortgage balances, amounted to £0.6bn during the first six months of 2014, compared to £0.5bn for the comparative period in 2013 and £1.0bn for the whole of last year, representing an annualised growth rate of 11% during the first half of 2014.
Meanwhile, residential mortgage arrears, where the arrears balance is more than 2.5% of the outstanding balance, have fallen further to 0.92%, compared to the CML industry average of 1.24%.
Group chief executive David Cutter (pictured) said: “The Society has continued to make good progress in growing its customer base, showing above-market growth in both its mortgage and savings balances. It has also increased its financial strength with profits and capital further improved, providing current and future members with the reassurance that they are dealing with a solid financial institution with a bright future.
“Significant investment continues to be made in the growth and development of the Society, the products and services we provide, the people who make Skipton what it is, and the communities in which we operate.”
The Society remains primarily funded by retail savings (representing 86% of total funding), as we continue to focus on retail savings balances to fund asset growth. The Society had drawn £800m under the Government’s Funding for Lending Scheme by the end of January 2014, but subsequently repaid £350m, resulting in £450m remaining outstanding at 30 June 2014.
