View more on these topics

Mutuals’ results paint mixed picture of sector

Building societies have reported a mixed bag of results for 2009, with Yorkshire Building Society seeing pre-tax losses of £12.5m.
The result represents a dramatic fall from the Yorkshire’s position in 2008 when it recorded a pre-tax profit of £8.3m. Provisions on mortgage losses went from £25m in 2008 to £59m 2009.

A statement from the society says the increase in mortgage loss provision is an appropriate step, taken in response to harsh economic conditions.

Gross mortgage lending at the mutual was just £900m for the year while mortgage assets fell by £1.3bn.

Chelsea Building Society, which is set to merge with the Yorkshire, also made a hefty pre-tax loss of £27.1m for the year.

But some mutuals have reported healthy figures, with Skipton Building Society seeing pre-tax profits of £63.5m for 2009 – up £41m on the previous year’s £22.5m.

Skipton now plans to merge with Chesham Building Society, the UK’s smallest mutual.

Chesham cites low interest rates and falling profits from mortgages as reasons for its decision to merge with Skipton.

It says it has been under signifi-cant pressure since the Bank of England lowered its base rate to 0.5% a year ago. This resulted in the society’s earnings from mortgages falling substantially during the period as many of its deals are linked to the base rate.

This, along with the fact that the cost of acquiring and retaining retail deposits has remained high, resulted in the need for the society to hold higher levels of short-term liquid assets.


Stricter regulation is the way to avoid problems in future

If the FSA expected an easy ride following the publication of its MMR proposals it must have been sorely disappointed. While it might have anticipated some strong words on extending its approved persons regime – which might explain its underestimation of 20,000 affected individuals – I wonder whether in today’s environment it expected such a […]

Hot water: soccer scandal brings back memories for Kent Reliance boss Lazenby

Terry, Hoddle and the Nationwide line

Just weeks ago John Terry’s future as England soccer captain was in the balance as his affair with Vanessa Perroncel (pictured) dominated the tabloids. But in contrast to February 1999 when Glen Hoddle’s position as England manager was in question, this time sponsor Nationwide dismissed the scandal as a private matter, adding that the society […]

This month’s decision: hold

With inflation on the up and growth still weak, raising the base rate this month could do more harm than good, according to Mortgage Strategy’s Monetary Policy Committee

Pensions - thumbnail

Changes to capped drawdown tables

The tables used for capped drawdown maximum income calculations have been updated. We look at the reasons for the change and what the impact could be. Changes to capped drawdown tables Capped income drawdown involves taking a pension directly from a fund instead of buying an annuity. However, there’s a limit on the maximum amount […]


News and expert analysis straight to your inbox

Sign up