Skipton completes turnaround; Leeds delivers record results

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SKIPTON Building Society completed its turnaround last year with a standout set of annual results showing the mutual has fully recovered from the financial crisis.

Britain’s fourth biggest building society reported market-beating growth in savings and mortgage balances, a 75 per cent increase in pre-tax profits and a robust capital position.

Skipton Building Society chief executive David Cutter at Skipton Castle

Skipton Building Society chief executive David Cutter at Skipton Castle

David Cutter, chief executive, told The Yorkshire Post: “It was certainly difficult times in 2009 and 2010 but we have turned around and it’s been a lot of hard work by a lot of people.”

Meanwhile, Leeds Building Society presented another set of record annual results yesterday, showing strong profit performance driven by growth in lending.

The region’s three main building societies, Yorkshire, Skipton and Leeds, accounted for 22 per cent of the growth in the UK’s residential mortgage market last year, highlighting the vital role they are playing in supporting Britain’s economic recovery.

Skipton was helped through the downturn by its diverse portfolio of subsidiaries, most notably Connells, the national estate agency chain, which helped offset losses in the group’s core mortgage and savings business.

Last year however, recovering margins helped the core business to generate 70 per cent of the group’s profits.

Mr Cutter said: “That’s the part of the business that’s owned by the members. It’s the one that needs to show financial strength and it’s pleasing that the imbalance has been corrected.”

The group reported profit before tax of £181.6m. The sale of subsidiaries generated a combined profit of £25.8m.

Skipton said savings balances grew 11 per cent to £11.4bn, while its mortgage book rose by the same percentage to £12.7bn.

Mr Cutter added: “Our vision is ‘building a better society’ and so much was achieved this year towards making this a reality.”

He acknowledged that the low interest rate environment remains difficult for savers.

Leeds, the fifth largest building society, said new residential mortgage lending rose by 24 per cent to £2.7bn, “significantly” above its market share and net residential lending was a record £1.1bn.

Operating profits rose by 26 per cent to a record £80.9m.

Peter Hill, chief executive, told The Yorkshire Post: “I’m very pleased with an excellent year.”

He said: “These achievements illustrate how our growth strategy – including investing in the best talent and modernising our brand and the ways in which we can meet our members’ needs – is enabling us to compete with larger rivals to attract more savers and borrowers in a challenging marketplace.”

All three societies, Leeds, Skipton and Yorkshire, are investing heavily in their digital capabilities as consumer expectations move online.

Leeds is moving on to a new computer system later this year which will act as “a springboard for very significant developments”, said Mr Hill.

The mutual created 100 new jobs last year and expects to create a 100 more this year; it is taking on new office space to accommodate the growth in numbers.

Mr Cutter said that after a number of disposals, including the sale of Homeloan Management and the Private Health Partnership, he is “comfortable” with the existing model in helping members achieve home ownership, savings and “life ahead” aspirations.