Leeds Building Society achieved record pre-tax profit for the first half of the year, driven by strong mortgage growth.
The growth, led by first time buyers, drove a nine per cent increase in profit before tax to £63.2m for the first half of the year, up from £58m the previous year
Britain’s fifth largest building society helped 22,410 more people buy a home with record new residential mortgage lending of £2.1bn, up by 10 per cent on the same period in 2016.
Speaking to The Yorkshire Post, chief executive Peter Hill said: “In a very competitive, highly commoditised market, we have tried to do something different. About 60 per cent of our lending is to borrowers who are looking for a little bit more than a straightforward low cost, low loan-to-value mortgage. We’ve specialised in higher loan-to-value, Help to Buy, shared ownership - things that aren’t easy to come by even though the market is very competitive. That has helped us attract a lot of new members on the borrowing side.”
The business grew net mortgage lending by more than £1bn, taking total mortgage balances to £14.2bn, up from £900m the previous year.
“We’ve got the opportunity to take market share and that’s what we’ve been doing for the last few years,” Mr Hill said. “I’m very confident that in a fairly flat market we can continue to take market share because we are doing something that’s a little bit different.”
Leeds Building Society also helped over 41,000 more people to save, increasing total savings balances by a record £1.3bn to £12.5bn. “When we did £1bn in the whole of 2016, we thought, ‘wow that is fantastic’”, said Mr Hill. “So to do £1.3bn in half a year is amazing but it is down to great rates, great customer experience, and people wanting to be part of a mutual.”
It also increased total membership to 778,000 from 756,000 in December 2016, the highest in the company’s history.
Meanwhile the mutual completed the refurbishment of its national 54-branch network, which it said was ahead of schedule and under budget. Mr Hill declined to reveal the cost of the refurbishment but said it was ‘not multi-millions’.
“Our branches had become a little bit tired and we’d started a rolling programme of refurbishment but each individual refurbishment was bespoke and quite expensive. We took a big step back and said ‘how can we do this in a sensible way?’” he said.
“We’ve done the entire estate for a reasonable amount of money and our customers are coming in and saying ‘this is fantastic’.”
The society also shut eight branches but Mr Hill added: “We invested a lot of time and effort into making sure everyone was going to be ok, particularly focusing on vulnerable customers.”
Looking ahead, Mr Hill said the repercussions of last year’s EU Referendum vote are likely to be felt for some time to come but added: “The society’s strong foundations ensure it remains financially stable and secure, and well-placed to meet any challenges that may arise in the remainder of 2017 and beyond.”