Skipton increases mortgage lending by 18%

Skipton Building Society increased its total mortgage lending by 18% to £481m in 2010, up from £407m in 2009.

Skiptonbranch1.tif.jpg

The society has revealed its financial results for 2010 today, which show group profit before tax from continuing operations of £35m, compared to £18m in 2009 – a 94% increase.

This excludes the one-off gain of £40m from the sale of Callcredit Information Group in December 2009 and the profits it generated that year.

The society’s Core Tier One capital ratio up 18% to 11.1% and Tier One capital ratio is up 17% to 12.6%, from 10.8% in 2009.

Its solvency ratio is also up 14% to 16.6%, compared to 14.5% in 2009.

The ratio of funding from retail balances has increased to 82% with 97% of mortgage lending funded by members’ deposits.

Its estate agency business, Connells, returned a profit of £48m despite a more challenging housing market during 2010 and it has managed down losses within the core Mortgages and Savings division, from £33m to £7m.

The quality of its lending improved further during the year, with falling arrears and possessions resulting in a much reduced charge for impairment losses of £15m, compared to £44m in 2009.

The group also sold its subsidiary mortgage distribution business Pink Home Loans for a profit of £1.2m.

David Cutter, group chief executive of Skipton, says: “Despite continued buffets from external market developments such as the impact of government austerity measures on our still-fragile economy, the Society has continued to underline its financial strength through prudent, cautious management coupled with a strategy to now grow the business whilst maintaining appropriate levels of capital and liquidity.

“We’ve held our margin steady at a low enough rate to give great value to members whilst being high enough to operate the business in a prudent manner.

“Skipton remains a successful mutual building society with tremendous future opportunities. It is thanks to the tireless commitment and team effort of our people that we remain optimistic about the future and our ability to overcome any further challenges which arise.”