Building Society remains positive despite drop in profits
YORKSHIRE Building Society has announced a drop in profits as tough economic conditions continue to effect the economy.
Despite a “prudent” approach to lending the company announced pre-tax profits of £54.6m for 2007 compared to £77.9m for 2006.
Chief executive Iain Cornish said the figures represented a “reversal of the prior year's positive movements” and said he expected the situation to improve in the coming years.
He blamed the profits fall on “fair value and impairment losses” on some of the society's treasury investments.
The Bradford-based mutual announced operating profits of £91m – a rise of 19% on last year's figures. The group also said that mortgage accounts 12 months or more in arrears were less than half the industry average at 0.10%.
Mr Cornish said that mortgage lending had risen by 19% to £4.7bn with the number of internet mortgages up by 44% after it launched the UK's first paperless online application service for customers.
Looking forward Mr Cornish said the society would continue its sensible approach to lending and would focus on opening new branches in Warrington, Chester and Oldham. He said the group would also be increasing its online services – launching a e-conveyancer service for borrowers to help cut legal costs.
Mr Cornish said: “'The society has no exposure to buy-to-let, unsecured or commercial loans and has maintained a sensible approach to its lending policy throughout 2007. It is particularly pleasing to report a huge growth in our internet business, with mortgage completions up almost 50% through this channel.
“This is an area where we have made great strides in developing new technology, which has been recognised by a number of industry awards. Like most major financial institutions, however, our pre-tax profits have been impacted by fair value and impairment losses on some of our treasury investments, although these account for less than 1% of the group's assets.”
Yorkshire Building Society is one of the largest building societies with 134 branches and 71 agencies across the UK.
