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Kent Reliance leads way for building society growth

Building societies have seen their third successive year of double-digit growth.

Statistics from KPMG Financial that total building society assets have reached 247.3bn, a 10 per cent increase on the previous year, while societies have maintained their 18 per cent share of the market.

Much of the growth in the society market is attributed to Nationwide which, with assets of over 111bn at April, represents 45 per cent of the total building society sector.

The fastest-growing building society for the third year running is Kent Reliance, which has increased its assets by 23 per cent and broke the 1bn mark for the first time.

KPMG says performance was marked by increasingly competitive market conditions, with average net margins down from 1.1 per cent to 1.01 per cent for the top 22 societies.

Most societies reduced their management expenses and 57 per cent increased profits. This offset the impact on profitability from the reduction in net margins.

KPMG Financial Services partner Richard Gabbertas says: “Building societies have reacted positively to the intense competition in the mortgage market. Societies can expect continuing competition as there appears to be a ste- ady stream of potential new entrants to the mortgage market, primarily investment banks with an intermediary focus and consequently price-led business models.”


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