Resilient model at building society holds firm against economic volatility

Yorkshire Building Society (YBS) has reported statutory pre-tax profits of £243.4m (30 June 2021: £147.7m) in its half-year results for 2022.

The business says it also provided 25,000 new residential mortgages during this period, (30 June 2021: 27,000) while its mortgage balances increased to £43.3bn (31 December 2021: £41.9bn), the highest in its history.

Saving balances increased to a record £37.7bn (31 December: 2021: £35.5bn).

Alasdair Lenman, interim chief executive, said: “The Yorkshire Building Society delivered a balanced and positive set of results in the first half of 2022.

“Our simple and resilient business model has continued to perform well, even though volatility in the external environment remains elevated, with a significant increase in inflation, rising interest rates and the conflict in Ukraine.

“Our strong net lending has been matched by our savings book growth and we have seen further reductions in the arrears rates on our lending.

“As a result, our key capital and liquidity ratios have remained stable and we are well positioned to manage the wider economic risks from inflation and falling GDP growth that lie ahead.”

YBS warns that while the rising interest rate environment is good news for savers, borrowers will start to feel the impact of increased mortgage payments as they come to the end of their current deals.

Its report adds: “Broader consequences of the cost-of-living crisis may emerge as savings balances are increasingly relied upon to fund everyday life, reducing customers’ ability to service their debt should they suffer a loss of income for any reason.

“Emergent challenges and threats, of natures both economic and operational, will continue to be monitored to ensure that the Yorkshire Building Society responds appropriately.”