£37m profit rise at Skipton Building Society

Skipton Building Society has increased its membership to over 971,900, an increase of 52,842 in the first half of 2018, resulting in a £37m increase in pre-tax profits.

Publishing its results to 30 June today, the mutual said it recorded group pre-tax profits of £104.7m, up from £67m for the same period last year.

The mutual, which is the UK’s fourth largest building society, said savings balances increased by £500m, a growth rate of 3.1% during the six month period, and mortgage balances increased by £500m, a growth rate of 2.8% during the six month period.

Over 110,000 customers held a cash lifetime ISA (LISA) with Skipton Building Society at 30 June 2018. The society said it had seen “phenomenal success” in attracting new customers because of the LISA.

The society further broadened its wholesale funding base, issuing regulated public covered bonds, raising £400m over a five year term.

Following approval given by members at their AGM on 25 July, and subject to approval by the Prudential Regulation Authority, Skipton said it remained on track to merge with Holmesdale Building Society on 1 October.

David Cutter, Skipton’s group chief executive, said: “The first half of 2018 has seen another strong performance for Skipton, as we continue to support our members in planning for their lives ahead.

“The Society’s performance in the first half of 2018 is pleasing, with sustainable growth in mortgage and savings balances, strong liquidity, and a growth in our net interest margin. We have continued to invest in our member offering, and Skipton is now one of the few financial services providers on the UK high street to offer full mortgage and financial advice video appointments.

“As a mutual, we will continue re-investing in our business for the benefit of our members.”

The sociuety said that underlying performance during the second half of 2018 was not expected to be materially different to that achieved during the first half of the year, with the exception that growth in membership numbers forecast to moderate following the phenomenal success of cash LISAs over the last 12 months.

Skipton added: “During the next six months the Brexit negotiations should have concluded, and the Society is well placed to face any outcome. The outlook for the housing market is notoriously difficult to predict, being so driven by sentiment, but at present it remains subdued. Downward pressure on net interest margins is expected into 2019, largely due to strong competitive forces in the UK prime residential mortgage market.”