Hinckley & Rugby doubles mortgage lending in 2011

9 February 2012 | By Tessa Norman

In the year to November 30 2011, the society advanced £77m in mortgages, 120% more than the £35m it advanced in 2010.

Mortgage applications also more than doubled from £48m in 2010 to £90m in 2011, meaning the lender has carried through pipeline business of £28m to 2012, up from £15m the year before.

The lending included a modest amount of buy-to-let advances at low LTVs, with buy-to-let accounting for 6% of Hinckley & Rugby’s total mortgage book at the year end.

The society posted a slight reduction in the size of its savings balances and total mortgage book, at £423m in 2011 compared to £429m in 2010.

Its pre-tax profit was £73,000 for 2011, down from £164,000 the previous year.

Chris White, chief executive of Hinckley & Rugby, says the lender remained profitable last year against a backdrop of heightened tension in funding markets and a continued squeeze of household incomes.

He says: “These factors affecting the supply of money and people’s appetite for taking major financial decisions such as house purchase meant activity in the wider mortgage market has been very subdued.

“However, the society has grown market share by prime residential mortgage lending, principally funded from the retail markets. There has been an increase in the net interest margin and in total income, plus improved capital ratios with careful management of costs.”

Nigel Frostick, chairman of Hinckley & Rigby, adds: “Market conditions will remain challenging in 2012 and beyond. In particular, the low interest rate environment will continue to depress profit margins.

“However, we are confident the society’s high quality balance sheet and robust capital ratios will continue to underpin its financial strength and place it is a strong position to trade through these conditions.”

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