Skipton's profits plummet but mortgage lending up fivefold

26 July 2011 | By Natalie Thomas

The group’s pre-tax profits were £3.9m in the first half of 2011, down from £15.9m in the first half of 2010.

Its loan impairment losses were £17.2m in the first six months of 2011, up from £3.2m in the same period in 2010 and £11.6m in the second half of 2010.

It says this is due to its specialist and commercial lending prior to the credit crunch.

The number of loans where the arrears balance was greater than 2.5% of the total outstanding balance was 1.48%, up from 1.42% as of December 31 2010.

This compares to the industry average of 1.47%

Accounts where the amount in arrears was 2.5% of the balance outstanding has fallen to 0.65% of the society’s total mortgage book from 0.66% at December 31 2010.

The group has recently launched a 95% LTV mortgage and launched a successful securitisation, raising £800m of funding.

David Cutter, group chief executive of Skipton, says: “The past six months have seen us concentrating heavily on our mutual commitment to enabling homeownership while continuing to provide good value to savers despite Bank Base Rate remaining at only 0.50%.

’We have increased our new lending fivefold and helped to boost market competition by offering product solutions for evolving needs, such as mortgages for low-deposit buyers and landlords.

“Considerable challenges remain in the wider economy, coupled with uncertainty over the impact of regulatory developments such as the Independent Commission’s review of the banking sector. However, despite this, our confidence in the underlying performance of our business is reflected in our plans to prudently grow the business during the remainder of the year.”

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