Skipton sees first-half profits slip

The mutual’s pre-tax profits were £72.1m, in comparison to the same six month period for the previous year when profit stood at £90m. For the year ended 31 December 2014 the mutual reported profit of £181.6m.

Underlying group profits before tax also fell from £84.7m to £78.2m.

The reduction in underlying profitability was largely due to an increase in costs and loan impairment provisions in the mutual’s Mortgages and Savings division, the latter mainly as a result of enhancements made to its credit risk loan impairment models, together with a reduction in profits from Connells, Skipton’s estate agency division, following the slowdown of the housing market in the second half of 2014.

In the first six months of the year, the society increased its membership by 25,520 to 820,259. It also increased savings balances by an annualised rate of 11 per cent.

Mortgage balances increased by an annualised rate of 15.5 per cent, as gross lending of £1.9m increased by 31 per cent compared to the same period in 2014.

David Cutter, Skipton Group chief executive, said: “The first six months of this year has seen us maintain our strong financial position, remain focused on our core mortgage and savings business and invest in our processes and people.

“It remains a very difficult time for savers, with low interest rates and Bank Base Rate having remained at 0.5 per cent for over six years. However, over these past six months we’ve continued to support both our savings and borrowing members, with a suite of competitive and award winning products, and the strong growth in savings and mortgage balances is testament to the Society’s relative competitiveness.”