British mutuals seize customers from big banks
THREE major building societies yesterday reported big increases in profits for 2013 as the sector seized customers from the big banks.
The Yorkshire Building Society saw pre-tax profits jump to £199.3m, up 26 per cent on the year.
It is the second largest mutual behind Nationwide, and its gross lending volumes increased 48 per cent on the year to £6.8bn. Its share of the mortgage market increased from 3.4 per cent to 3.8 per cent.
The Yorkshire’s net lending increased three-fold, hitting £2bn and giving the building society a 17.8 per cent share of net lending in the year.
“This is an important time for building societies as banks are struggling and not lending,” the Yorkshire’s chief executive Chris Pilling told City A.M.
“We’re well capitalised and have strong liquidity, meaning we are in a position to push harder.”
The mutual also rolled out a 95 per cent loan to value product, but did not sign up to the government-sponsored Help to Buy scheme.
Nonetheless, Pilling said the scheme had helped normalise 95 per cent mortgages once more, giving first time buyers the confidence to apply for loans.
Similarly the Leeds Building Society reported strong results, in part based on rising numbers of first time buyers.
It made a profit of £64.2m, up 18 per cent on the year.
The Leeds increased its new residential mortgage lending by 31 per cent to £2.16bn, with net residential lending of £1bn, up from £700m a year earlier.
In the year 30 per cent of its customers were first time buyers.
Meanwhile the Skipton Building Society’s pre-tax profits increased by £67.1m to £102.5m, as it added 21,046 new customers to make a total of 763,407.
Over the year its mortgage book grew by 9.2 per cent, as it made 14,109 mortgages.
The Skipton’s savings balances jumped 8.4 per cent on the year, hitting £10.3bn by the end of 2013.