MortgagesFeb 28 2019

Yorkshire sees profits grow

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Yorkshire sees profits grow

Yorkshire Building Society has reported growing profits and increased mortgage lending despite pressure from a "competitive" market.

In its annual results published today (February 28) the lender announced pre-tax profits of £192.5m for 2018, up by 16 per cent from £165.8m the previous year.

Yorkshire financed 36,000 mortgages last year with its gross lending hitting a record £8.9bn, up 10 per cent on the £8.1bn lent in 2017.

However the business written has become less profitable as Yorkshire’s net interest margin decreased from 1.23 per cent in 2017 to 1.11 per cent last year, although the lender maintained this drop was in line with its "strategic plan".

The net interest margin is the difference between the interest a lender earns from mortgage loans and the amount they pay out on deposits savers hold with them.

The latest figures indicate the lender has recovered since last year when it reported that its profits had dropped in the first six months of 2018 to £88.6m. 

The lender also reported a reduction in costs throughout last year, saving £29m to spend £311m.

Mike Regnier, chief executive at Yorkshire Building Society, said the lender’s profit had remained sustainable despite a "competitive" market putting "margins under pressure".

He said: "All of the money we make is either used to help our members, through higher than average savings rates, more flexible products and improved services, or kept within the society to make us financially stronger and more resilient.

"Our year-on-year reduction in operating costs, along with improvement in the management expense ratio, shows that we're becoming more efficient and giving our members better value for money."

rachel.addison@ft.com