Yorkshire Building Society has reported a pre-tax loss of £12.5m for 2009, as the building society reveals it has allowed for losses on its mortgage book totalling £59m.
The Yorkshire’s 2009 results reflect a massive drop from its position in 2009 when it recorded a pre-tax profit of £8.3m.
Provisions on mortgage losses have gone from £25m in 2008 to £59m last year.
A financial statement from the Yorkshire says the increase in mortgage loss provisions is “an appropriate step taken in response to the harsh economic conditions.”
Gross mortgage lending at the mutual was just £900m for the year, while mortgage assets decreased by £1.3bn.
The average LTV on the Yorkshire’s book as at December 31 2009 was 52%.
The proportion of mortgages in arrears by three months or more was 1.84%, which the Yorkshire says is below the Council of Mortgage Lender’s industry average.
In December the Yorkshire announced its planned merger with the Chelsea Building Society, following the Yorkshire’s earlier merger with the Barnsley Building Society last year.
The merger between the Yorkshire and the Chelsea will see the integration of the UK’s second largest building society with the country’s fifth largest.
When the merger is complete the enlarged Yorkshire Group, as it will be known, will have approximately £35bn in assets, 178 branches and 75 agencies in the UK.
Iain Cornish, chief executive of Yorkshire Building Society, says: “We are seeing green shoots in the housing and mortgage markets and we are optimistic about the future prospects of the group and plan to prudently increase our lending in core prime residential mortgages.
“Our agenda, through the merger with Chelsea Building Society, is to provide a compelling alternative to banks and a real choice to consumers across the UK.”
The Chelsea has also released its full-year results today, revealing the building society made a pre-tax loss of £27.1m for the year to December 31 2009.