Leeds Building Society delivers rise in profits

Pre-tax profit in the first half of 2010 was 18m, compared to 16.3m in the same period last year.

The savings balances rose by 254m to a record level of 7bn. Over the half year, 34,000 new members joined the society, taking total membership to a record level of more than 688,000.

Ian Ward, the chief executive, said: "Throughout the first half of 2010, we offered a wide range of mortgage products, with new lending totalling 400m, enabling many people to remortgage or buy their first home. All of the society's residential mortgage lending is funded entirely by retail savings and we are targeting 1bn of new lending this year.

"Efficiency remains a cornerstone of our success and this is highlighted by our excellent cost ratios. Our cost income and cost asset ratios remained very strong at just 35 per cent and 45p per 100 of assets. These are very favourable compared to the average of the major building societies, which were 86 per cent and 83p respectively, at the end of 2009.

"Strong profitability and high levels of capital enabled the society to repay 39m of its subordinated debt. Our capital and reserves remain very strong at 515m (543m 31 December 2009) and our regulatory capital is in excess of regulatory requirements.

"As we move into a period of austerity following the worst recession for over 60 years, there are inevitably a very small number of borrowers experiencing difficulties meeting their mortgage repayments and we continued to work with these customers through this period. Our residential arrears (2.5 per cent or more of outstanding mortgage balances) have increased slightly to 2.32 per cent.

"Despite this, the charge for impairment losses and provisions for commercial and residential property reduced to 24m in the first half of 2010 (26.6m, 30 June 2009) and pre-tax profit increased to 18m (16.3m, 30 June 2009). Total balance sheet provisions increased to 77.1m at 30 June 2010 from 59.1m at 31 December 2009.

Leeds Building Society has maintained its strong long term deposit 'A' credit ratings, with both Fitch and Moody's.

Mr Ward added: "Our business model remains robust and successful as we continue to focus on efficiency, a prudent approach to lending, maintaining very strong levels of capital and high credit ratings.

"This, combined with delivering good value for money products backed up by excellent service to our members, means that we are in a very good position to deal with the challenging economic outlook for the remainder of 2010 and beyond."