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Britannia BS sees profits drop by £15m

Britannia Building Society has seen its profit before tax drop to £115.2m in 2007, down from £130.4m in 2006.

On a total mortgage lending of £8.4bn, Britannia’s average loan to value of mortgage completions in 2007 was 63 per cent. It says its average indexed LTV is 43 per cent.

Net lending for 2007 increased slightly to £2.4bn, up from £2.3bn in 2006. Group assets grew to a new record of £36.8bn.

Britannia’s own mortgage lending – separated from its intermediary lender Platform – saw a 12 per cent growth in mortgage application volumes and retention rates of more than 75 per cent for customers coming off discounted or fixed rate products.

The Group’s total number of accounts three months in arrears was 2,919 – 1.24 per cent of the Group’s 250,000 mortgages. In 2006 this was at 0.95 per cent.

Britannia says that the majority of the funds used for its mortgage lending are derived from the balances of its 2.6 million savers. It says that this means that more than 90 per cent of its unsecuritised mortgage lending is funded by retail rather than wholesale.

It says it has maintained levels of short-term liquidity at historical highs and holds approximately four times the level of short-term liquidity required by the FSA.

Britannia says it held £5m of SIVs at the end of 2007, and has limited its losses to £1.6 million, which it expects to recover when the investments mature.

It says it has not taken exposure to any US sub-prime mortgages or CDOs.

Group chief executive Neville Richardson says: “At a time when the credit crunch is having a major impact on many financial services companies, we have delivered a robust performance. We have a strong balance sheet, our business model is solid and sustainable and our commitment to fairness will continue to serve our members well.”

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