2011 Interim Results

Yorkshire Building Society increases lending and boosts profits in the first 6 months of 2011

Doubling lending volumes

Yorkshire Building Society, the UK's second largest building society, reports strong financial results for the first six months of 2011. In the period the Society has more than doubled lending volumes, increased core operating profits by almost 70%, maintained asset quality and improved its capital strength.

The Yorkshire has previously announced its intention to merge with Norwich and Peterborough BS (N&P) and acquire the savings and mortgage book of Egg Banking Plc, demonstrating the financial strength and stability of the organisation. These transactions will add further scale to the Yorkshire making it even better placed to successfully compete in the UK retail financial services market.

Key highlights

  • Group pre-tax profit £73.1m - core operating profit £90.2m
  • Strong capital position - Core Tier 1 capital ratio 12.7%
  • Liquidity maintained at prudent level of 21.7% - well above regulatory requirements
  • Total mortgage balances of £23.1bn
  • Gross mortgage lending more than doubled compared to same period last year
  • Member savings balances of £21.0bn
  • 100% of mortgages funded by savings balances and reserves
  • Launched two successful public wholesale funding transactions, demonstrating continued market confidence in the Society and supporting a balanced funding strategy
  • Maintained asset quality - loans in arrears by more than three months by volume at 1.80%, below the industry average

Other highlights and Member benefits

  • Integration with Chelsea Building Society well advanced with migration of core systems complete, £27m of annualised cost savings achieved and further savings expected by end of 2011
  • Expanded high street presence with nine new agencies opened in the first half of the year - at a time when many other financial institutions are closing branches and agencies
  • One in four new mortgages issued to first time buyers assisting homeowners onto the property ladder
  • Continued investment in internet capabilities extending the online mortgage application process to Chelsea members
  • Achieved more than 1,000 'Best Buy' mentions in national newspapers for our mortgage and savings products
  • Launched a new market leading branch-based savings account, combining a sustainable competitive variable rate with access to funds
  • Launched new additional lending range aimed at rewarding member loyalty
  • Winner of seven independent mortgage awards including Best Overall Mortgage Provider (Moneynet) and Best Building Society Mortgage Provider (Moneyfacts)
  • Donated almost £225,000 to 460 different charities and local communities, of which over 75% were nominated by members

Iain Cornish, Chief Executive of Yorkshire Building Society said:

The strong performance in the first six months of 2011 reflects the increased efficiencies delivered through the merger with Chelsea and our continued commitment to adopting a prudent approach to our business.

Whilst the economic climate remains challenging we are confident that the Yorkshire is very well placed to continue to grow and prosper. The merger and acquisition work we have announced in this period is in line with our overall strategy to take advantage of opportunities as they arise, which we believe are in the long-term interests of our current and future members. These transactions will further increase our ability to offer members financial security and good, long-term value.