CompaniesJul 31 2014

Skipton H1 profits almost exceed the whole of 2013

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Skipton Building Society has announced pre-tax profits of £90m for the six months to 30 June, almost reaching the £103.6m figure for the whole of last year.

Group profits benefited from a fall in impairment losses on loans and advances to customers, from £12.2m to £3.8m.

Furthermore, gains totalling £12.5m were recognised from the part disposals of equity investments in property website Zoopla and associate holding in crime analytics software company Wynyard Group.

Gross residential mortgage lending in the six months amounted to £1.5bn, up 34 per cent from the first half of 2013, “achieved without increasing credit risk appetite”.

Net residential mortgage lending, being the growth in mortgage balances, had an annualised growth rate of 11 per cent during the first half of 2014.

The society remained primarily funded by retail savings - representing 86 per cent of total funding - as it continued to focus on retail savings balances to fund asset growth.

It had drawn £800m under the government’s Funding for Lending Scheme by the end of January 2014, but subsequently repaid £350m, resulting in £450m remaining outstanding at the end of June.

The half-year report also restated its new aim to help customers to plan for retirement.

The statement said: “In partnership with our wholly owned subsidiary Skipton Financial Services Limited, we are now providing a planning service centered on our new ‘Retirement Review’ which is available to new and existing customers, the initial review meeting being free of charge.”

Meanwhile, estate agency division Connells, increased its pre-tax profits by 85 per cent to £42.6m, reflecting an improving housing market.

House sales were 20 per cent higher in the first half of 2014 compared to the first half of 2013, the division also recorded an 18 per cent increase in lettings instructions and a 7 per cent increase in mortgage appointments.

Mortgage services division Homeloan Management Limited delivered a profit before tax of £200,000, compared to £300,000 in the first half of 2013.

Last week the society announced the sale of HML to Computershare Ltd for more than £47m. The initial consideration will generate a profit in the order of £26m to be recognised in the group’s second half results.

The financial advice division achieved pre-tax profits of £800,000 compared to £500,000 in the same period last year.