The UK’s second largest building society posted pre tax profits of £50.5 million, 40% down from £81 million in 2007.
Total mortgage lending for the borrower dropped to £1.9 billion was reduced from last year’s £3.7 billion. Britannia blamed this drop directly on the credit crunch.
It says the bulk of losses came from the intermediary lender Platform, which lent higher loan-to-value advances for first-time buyers and loans against new-build city centre flats.
Britannia also says arrears on specialist lending and in a small number of acquired mortgage books increased as a result of the market downturn. Arrears levels for the lender were just over 1.7 per cent, above industry averages.
Britannia Group chief executive Neville Richardson says: ‘We said at the start of the year that 2008 would be a year of consolidation, rather than growth. But we are weathering this storm and will come out stronger.
‘We’re not immune to the market downturn, and our business model anticipated losses arising from some of our lending. The slowdown in the wider economy means we believe those losses may come about more quickly than expected, but we’re taking the necessary action to contain them.”