Solid set of results for building society amidst tough economic climate

Yorkshire Building Society (YBS) says it grew both its mortgage and retail savings balances by £2bn and £2.6bn respectively in the six months to June, despite gross mortgage lending in the UK being down 12% year-on-year.

Publishing its 2024 half-yearly financial report today, YBS adds its statutory profit before tax for the period was £158.1m (2023 H1: £180.6m), while 290,000 savings accounts were opened (2023 H1: 320,000).

Savings balances increased to £50.3bn (2023: £47.7bn) and the building society provided 23,000 new residential mortgages (2023 H1: 21,000), with one in three new mortgages provided to a first-time buyer. Mortgage balances increased to £48.8bn (2023: £46.8bn).

Susan Allen, chief executive, said: “We have continued to offer above-market average savings rates, launched new, innovative products to help first-time buyers and delivered a solid financial performance.

“Both 2022 and 2023 represented periods where profits made by the society were higher than historical levels.

“An anticipated reduction in income due to mortgage and savings margin compression, and the absence of further changes to Bank Rate, led to H1 2024 profitability returning to more normalised levels.

“Mortgage and savings margins stabilised over this reporting period, and core profits increased between quarter one and quarter two.

“We expect this trend to continue into the second half of the year. The society is well-positioned for the prospect of reducing interest rates.”

YBS notes the level of demand in the mortgages market has been stronger than expected in 2024 so far, and house prices have proven more resilient than some previous expectations.

And commenting on its savings offering, YBS says that so far during 2024 it has delivered savings rates which were on average 0.91 percentage points higher than the market average.

The building society stresses that it holds levels of capital and liquidity that comfortably exceed regulatory minimums.

It says continued profitability will aid its resilience and provide extra options to weather uncertainties that future periods may bring.