Branch sale boosts profits at Vernon
PROFITS at Stockport-based mutual lender Vernon Building Society virtually doubled in 2010 due to a one-off gain made through the sale of one of its branches.
The Society announced that its income fell to £7m, compared with £7.8m in 2009. However, pre-tax profits increased to £1.3m, compared with £692,000 last year.
Some £622,000 of its profits came from the disposal of its former branch in Poynton sold as part of a wider redevelopment of the area around the town’s Civic Centre.
The accounts also reveal that the total amount of assets held on its books increased to £247.1m, compared with £245.8m a year earlier.
A report accompanying the accounts by the society’s chairman, John Longworth, said: “Across the financial sector institutions have struggled to rebuild their capital positions and deal with contracting balance sheets and losses due to rising mortgage arrears. In the face of these difficult economic conditions the Society is pleased to report modest growth in its total assets.
“The quality of our mortgage book remains high and our arrears levels are very
low compared to the average for the industry.”
The amount of money in arrears did increase during the course of the year to £540,000 (2009: £380,000) and the society did have to make its first repossession since 2006 as a result of worsening market conditions, it said.
However, it argued that the demise of the former Cheshire Building Society (which was subsumed alongside Derbyshire Building Society into Nationwide last year), left it as “the only independent local building society” within its operating area.
“Given the branch closures announced by the former Cheshire Building Society, and those of other institutions, we believe that it is vitally important that the Vernon should continue to deliver the benefits of mutuality to the local communities,” said Longworth.
