Yorkshire posts £163m profit and reveals 2012 plans

Yorkshire Building Society increased its lending by 46 per cent last year.

In annual results announced today (23 February), Yorkshire reflected on its merger with Norwich & Peterborough Building Society (N&P) and the acquisition of the savings and mortgage balances of Egg Banking plc.

The society revealed mortgage balances increased by 14 per cent to £26.7bn, compared with £23.3bn in 2010.

Total assets increased by 9 per cent to £32.6bn in 2011, compared with £30.1bn the previous year,

The group’s average indexed loan-to-value remained low at 54 per cent, compared with 56 per cent in 2010.

Asset quality improved with the level of loans in arrears by three or more months (including possessions) reduced to 1.78 per cent, compared with 2.10 per cent in 2010.

The Council of Mortgage Lenders’ arrears industry average is 2.10 per cent.

The society has reduced its mortgage impairment provision charge by 25 per cent to £30.1m, down from £40.8m in 2010.

Acquisition of the savings and mortgage business of Egg Banking plc on 31 October 2011, with customers becoming members of the Yorkshire. Yorkshire merged with N&P on 1 November 2011.

The year also saw the completion of the integration of Chelsea Building Society into the Yorkshire, including transferring many of the Chelsea systems onto a common society-wide platform.

Yorkshire launched the offset functionality on Chelsea mortgage range, with almost half of all new Chelsea borrowers choosing this option to maximise the effectiveness of their savings in the low interest rate environment.

According to the society it has achieved annual cost synergies of £33m following the Chelsea merger.

Chris Pilling, chief executive of Yorkshire Building Society, said: “I am extremely pleased to report very strong financial results for the Yorkshire in 2011.

“This performance shows significant growth in mortgage and savings balances, increased level of operating profit, stable net interest margin and robust capital and liquidity positions despite the continuing challenges presented by the economic and market conditions.”

He claimed that one of the Yorkshire’s strategic priorities is looking ahead and seizing new opportunities.

Mr Pilling said: “To date, the focus of this priority has been on undertaking strategic mergers and acquisition activities. Our focus for 2012 will be to ensure that we take full advantage of the opportunities presented by our newly enlarged business.

“This will include the effective integration of N&P and the Egg business, delivering planned synergies and developing the range of products and services we offer to members by leveraging the capabilities and expertise we have acquired in our recent transactions.”