Moody’s upgrades Leeds’ credit rating

Moody’s has upgraded Leeds’ credit rating.

Financial institutions use the rating to assess the credit risk of banks and building societies and their ability to meet financial obligations.

Leeds was one of only two societies to receive an improved rating.

According to Moody’s, the upgrade reflects the good financial performance of Leeds in recent years, particularly its profitability compared to its building society peers, its sustainable generation of non-interest income, strong management of costs, excellent asset quality and its solid funding structure.

Ian Ward, chief executive of Leeds, says: “This is excellent news and confirms the superior performance of the society.

“Our high levels of profitability have been achieved without a similar rise in costs.

We significantly improved our cost asset ratio to 62p per 100 of assets in 2005, compared to 67p the previous year.

The other key measure of efficiency is the cost income ratio and the society’s is one of the lowest in the industry, which means that for every 1 in income earned we spend only 44p, down from 47p.

“Our net interest margin is also lower than the average of the top 22 societies which demonstrates that our members are enjoying a wide choice of flexible, competitively priced mortgage and savings products as a result of our overall efficiency.

“The improved credit rating will enable us to secure cheaper funding and expand the breadth of potential investors in the society.

This will in turn allow us to continue to offer good value for money products for the benefit of our members.”