Skipton Building Society’s financial advice arm Skipton Financial Services reported a loss before tax of £900,000 at the end of June, as it looks to complete integrating the division by the beginning of August.
Interim results covering the first six months of this year said the move - announced back in January - demonstrates the society’s commitment to offering face-to-face financial advice on the high street.
The move has now received regulatory approval and will go ahead on 1 August, with Skipton offering restricted financial advice.
The wider group reported “solid first half performance”, maintaining gross lending at £1.9bn, which led to total profit before tax of £76.8m - up from £72.1m at the end of June 2015 - and including contingent consideration of £9.6m following the disposal of Homeloan Management Limited in 2014.
Underlying group profit before tax was £72.1m - down from £78.2m during the six months ended 30 June last year.
Total assets increased by 7.9 per cent to £18.9bn over the last six months, from £17.5bn at 31 December.
The mortgages and savings division produced profit before tax of £46.6m - down from £49.1m against the same time last year - which represented 61 per cent of group pre-tax profits - down from 68 per cent in 2015.
Administrative expenses of £54.3m were £3.9m (or 7.7 per cent) higher than the £50.4m incurred during the comparative period in 2015, as the society continued to invest in various areas of the business to meet customer demand and support growth, according to the results.
There was a £1.3m credit in relation to mortgage impairment - compared with a £8m charge during the first half last year - predominantly due to an increase in house prices and a fall in arrears.
During the six month period, 95 per cent of the society’s lending was introduced through intermediaries and 13 per cent was on buy-to-let products.
Net mortgage lending for the mortgages and savings division amounted to £500m during the first six months of 2016, compared to £1bn for the comparative period in 2015 and £1.5bn for the whole of last year.
This represents a growth rate of 3.8 per cent - falling from 7.8 per cent during the first half last year - which Skipton put down to strong growth in mortgage balances over the past three years.
Group chief executive David Cutter hailed continued growth in mortgage and savings balances while continuing to build the capital base.
“The economic uncertainty that has arisen since the EU referendum makes it more difficult to forecast trading conditions in the short to medium term, in particular any movements in bank base rate and any impact on housing transactions and house prices which impacts the mortgages and savings division and Connells, but we are well placed to manage the risks that we face and to capitalise upon any opportunities that may arise,” he stated.
As for estate agency division Connells, it reported profits before tax of £31.3m for the six months ended, compared to £27.3m for the first six months of 2015.
Connells has seen a 24 per cent increase in income from lettings, a 23 per cent increase in income from mortgage services and income from surveying was 16 per cent higher, when compared to the same period last year.
Costs increased by 19 per cent, as Connells continued to invest in expanding its lettings footprint and increasing the number of mortgage services consultants and surveyors.
peter.walker@ft.com
