Skipton Building Society has reported a £22.3m pre-tax profit for the six months ending June 30, 2012, an increase of 253 per cent on the £6.3m profit it made in the first six months of last year.
The profit increase resulted largely from a £12m lift in the performance of its mortgage and savings division, which achieved a pre-tax profit of £3.9m compared to a loss of £8.1m for the first half of 2011.
Its mortgage and savings division also saw a £9.5m reduction in impairment charges on loans to £7.7m for the first six months of 2012, compared with £17.2m in the same period of 2011.
Skipton’s estate agency profits rose by £4m, driven by the Connells group, which recorded a pre-tax profit of £18.9m for the first six months of the year, compared to £14.9m for the first six months of last year.
The building society’s mortgage servicing business, HML, made a pre-tax profit of £0.1m following a loss of £3.2m for the first six months of 2011.
Skipton’s core tier one capital ratio increased from 10.53 per cent in June 2011 to 10.88 per cent in June 2012.
At June 30, 2012, 81.2 per cent of Skipton’s total funding came from retail savings, compared to 77.9 per cent at the end of June 2011.
Its arrears have fallen and the proportion of loans where the arrears balance was greater than 2.5 per cent of the outstanding balance was 1.37 per cent at June 30, 2012, compared to 1.48 per cent a year earlier. The Council of Mortgage Lenders’ industry average figure currently stands at 1.4 per cent.
Skipton group chief executive David Cutter says: “I am pleased to announce the increase in our profitability and overall performance over the past six months which is the result of our ongoing clear strategy of prudent growth, balanced with cautious management of our business and a steadfast focus on the needs of our members.
“We are not complacent as we enter the second half of 2012, given the continued economic challenges facing the Eurozone in particular and the UK in general.
“However, we remain confident that the strength of our diversified Skipton Group, coupled with our plans for managing future challenges which might emerge, will continue to stand us in good stead as we provide a reliable haven for meeting our members’ financial needs.”