Profits leap at Leeds Building Society

LEEDS Building Society saw pre-tax profits rise by almost half over the first six months of 2011 as its new lending levels also jumped.

The UK’s fifth largest building society said it had enabled thousands of first-time buyers to get a foot on the housing ladder thanks to its lending model.

For the six months ended June 30, new lending increased by 61% to £642m and pre-tax profits increased by 49% to £26.9m.

Savings balances rose by £127m to a record level of £7.15bn and the Leeds attracted 21,000 new members, taking its total to more than 685,000.

Chief executive Ian Ward, who officially retired from the building society this week, said: “Leeds Building Society has achieved another excellent set of financial results for the first half of the year and provided more capacity and choice to the UK mortgage market.

“New lending increased by 61% to £642m, which represents £275m above our market share. Almost a quarter of new loans, over £151m of completions, has enabled thousands of first-time-buyers (FTBs) to purchase their first home and this represents an 85% increase when compared to the same period last year.

“The average loan-to-value (LTV) on new lending was only 52% as we continue to adopt a prudent approach to underwriting.

“We intend to increase new lending further this year, to around £1.3bn, which will support many more FTBs onto the housing ladder and enable other borrowers to move their mortgage to us.”

Mr Ward said the building society’s cost ratio also improved to 31% from 35%, as a result of the increase in its total income.

The charge for impairment losses and provisions for commercial and residential property reduced slightly to £23.2m from £24m.

Mr Ward, who has been chief executive for almost 16 years, said the Leeds had also repaid money owed to the Bank of England’s Special Liquidity Scheme.

Leeds Building Society also confirmed that deputy chief executive David Pickersgill has retired as a director following a period of ill health.

Robin Smith, chairman of Leeds Building Society, said, “The board is greatly appreciative of the enormous contribution made by Ian and David to the success of the Society over very many years.”

Peter Hill, the Society’s operations director, will succeed Mr Ward.

Mr Ward added: “I have been very fortunate to have had a first class team of executive and non-executive directors combined with extremely committed and supportive staff. I am also delighted that Peter Hill will take over from me. He has a proven track record of success, is very talented and has a great desire to succeed.

“The business model remains robust and successful and we are highly efficient, have a strong well-capitalised balance sheet and continue to focus on delivering good value for money products backed up by excellent service to our members. Leeds Building Society is in an excellent position for continued success in the future.”