Announcing Skipton Building Society’s annual results for 2005 today, John Goodfellow, chief executive, said the mutual had turned in an outstanding performance, with record figures that built on previous strong results. He commented, “As the figures for the Skipton Group - with its 16 subsidiary companies - show, we are once again the most profitable building society in the UK today. By increasing the number of members the Society has, we have seen mortgage balances ending the year up 18% and investment account balances up 12%. Once again, I’m proud to say Skipton has performed beyond market expectations and shown itself to be the epitome of a modern mutual.”
Financial highlights include:
- Group Assets up 12.2% to £9.2bn
- Society Assets up 12.0% to £8.8bn
- Group Pre-Tax Profit up 10.9% to £91.2m
- Society Pre-Tax Profit up 18.7% to £55.8m
- Group Interest Rate Margin 1.08%
- Society Interest Rate Margin 0.74%
- Society Management Expenses Ratio down from 62 pence to 60 pence
per £100 assets
These results are prepared under International Financial Reporting Standards.
Speaking about the Society, John commented, “Despite continuing competitive pressures in the mortgage market, loans and advances to customers increased by 18% to £7 billion, which demonstrates the Society’s success in attracting new members and customers. Indeed, total mortgage origination via organisations in the Skipton Group hit a record high, at over £9 billion, with the Society itself receiving 26,000 mortgage applications during the year.
“The good news for Skipton’s borrowers is that, with our residential SVR currently standing at 5.89% - one of the industry’s lowest - they can be assured of a fair deal at all times.
“Our savings accounts, which have contributed greatly to growing the Society’s retail balances by £563 million to end the year at £5.2 billion, include the Pension Plus account (created specifically for older savers), the range of 1, 2 and 3 Year Pick ‘N’ Fix Bonds and the Branch Access account, which received over 70 best buy mentions in the national press in 2005.
“Our strategy of building a larger Group with 16 subsidiary companies and thereby generating ‘fee and commission income’ from every area of the Group, has enabled the Society to further reduce its interest rate margin to 0.74% - the lowest in the marketplace - which directly benefits our members.
“Connells, now the country’s second largest estate agency group (comprising Connells, Sequence and Sharman Quinney) has had an outstanding year. The business saw profits increase by 40% to £41.5 million pre-tax, despite a return to a more normal housing market leading to a reduction in transaction volumes of 20%. Another subsidiary which has enjoyed a successful 12 months is Homeloan Management which, with assets under management in excess of £33 billion, is the UK’s most successful mortgage servicing provider.
“In addition, our financial adviser subsidiaries, Pearson Jones and Skipton Financial Services, managed to flourish following a tough year, with pre-tax profits of £4.4 million. The success of the latter was due in part to its affinity partnership with the Daily Telegraph and Sunday Telegraph, concentrating on the issue of inheritance tax.
“What has been achieved in the last 12 months is a further endorsement of our strategy. Our challenge for 2006 will be to continue to provide outstanding rates for savers and borrowers at a time when the Bank of England’s base rate is forecast to remain low.
”Skipton offers outstanding service - a fact recognised by our winning the Financial Adviser 5-Star Service Award for the sixth year in a row. This is a unique achievement for a building society and to top it off, out of the remaining five winners, it was another subsidiary, Pink Homeloans, which took first position. Adding to these high levels of service is our commitment to provide all customers with fairness in our products and services. Clearly as a mutual organisation we are in a strong position to satisfy our desire to treat customers fairly, as expressed by our regulators. Our subsidiaries, including Mutual One, jointly owned by nine other building societies, continue to deliver leading edge solutions to the financial services sector and to other mutuals in the UK, to improve business performance.
“With regard to the future growth of the Group, we will retain our focus on the core business of mortgages and savings, but will seek to invest further in related businesses where the opportunities are available and justified. In this way, Skipton will continue to act as a modern mutual, giving real value to members – our customers”.
