MBS profits slide 50%
PROFITS at the Manchester Building Society have fallen by more than 50% in the first half of 2010 amid a challenging and uncertain market place.
The mutual, which is in talks to sell its commercial banking business Whiteaway Laidlaw to the Royal Bank of Scotland, saw profits in the six months to the end of June fall from £533,000 to £245,000.
Chairman Mike Prior said mortgage lending was “subdued” in the period and said the lender was adopting a cautious approach to new loans.
Regarding those customers in arrears he said the Manchester was taking a “sympathetic and pragmatic approach”.
Like many other financial institutions funded through retail deposits Manchester Building Society has seen its interest margin has been squeezed by the low interest rate environment.
Looking ahead Mr Prior said the outlook from a UK and global perspective was uncertain.
“Whilst average UK retail savings rates have reduced since the start of 2010, competition for retail deposits continues to be fierce and it is the board’s view that this will continue for the foreseeable future.
“The future direction of the housing market also remains uncertain, with general sentiment fearing a further relapse in house prices following their unexpected recovery between H1 2009 and H2 2010.
“The society’s approach will remain cautious and its lending levels are likely to remain subdued during the remainder of the year.”
Interest and similar income fell to £13.8m from £17.9m and operating income dipped £500,000 to £3.9m. Overall assets were £5.8m ahead at £935.8m.
