The first half of 2004 has seen a continued buoyant northern housing market, which is at the heart of the Leeds based building society’s operations. This underpinned strong growth in mortgage lending, pushing up completions by 32% to a record £816m. An 11% rise saw the Society’s assets increase to £5.9bn, consolidating its position as the UK’s 8th largest building society.
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Chief Executive, Ian Ward, said: “The increase of 32% in mortgage lending to a record £816m shows that the Society is providing the market with competitively priced products, combined with a fast and efficient service. Further advances to existing mortgage customers increased by 20% to a record £78m.
“The buoyant property market, particularly in the north, supported an 11% rise in assets to £5.9bn. Notwithstanding the strong market conditions in our heartland, it is pleasing that we have continued to attract mortgage business throughout the UK. Our very low level of arrears reflects the quality of our lending but, with property prices showing signs of easing, we have taken the prudent step of making a general provision of £1.6m.
“We have continued to offer savers an excellent choice of flexible and innovative products and this resulted in savings balances rising by £191m, compared with £147m in the same period in 2003. This year’s performance is 76% above the Society’s natural market share, when compared to the net receipts of other building societies.
“We are also one of the most efficient building societies, as demonstrated by a further substantial reduction in our cost asset ratio from 72p to 66p during the first half of 2004. Our interest margin has fallen even further since the first half of 2003 to 1.12%, benefiting our members through better mortgage rates and higher savings rates.
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“The 10% rise in pre-tax profits to £21m is a further indication that the Society is delivering profitable growth. This allows us to remain financially strong, which is important to members, whilst also enabling us to continue investing in the business. In the first half of the year, we continued to develop our computer systems to ensure they meet the new regulatory requirements for the sale of mortgages, which come into effect on 31 October 2004.
“We also completed a full re-branding in April, which saw all of the Society’s branch fascia signs changed to our new blue on yellow corporate colours. This was completed very cost effectively within just a few weeks and supports our long-term aim of widening the Society’s appeal as a modern, forward-looking mutual.
“Further additions to the Society’s services include a full on-line savings facility (launched July) and the development of a ‘chip and pin’ debit/ATM card proposition. Both initiatives are significant strategic developments for the Society and will be used to enhance existing products and also to enter new markets.”
