Record mortgage lending boosts profits at Leeds Building Society
Leeds Building Society said record growth in mortgage lending, favourable funding conditions and a reduction in impairment provisions has boosted its assets to an all-time high of £12.7bn.
At its interim results, the mutual said mortgage lending increased by 22 per cent to £1.45bn, “significantly above” its market share.
The first half of the year saw record net residential lending of £668m, helping to boost profits by 42 per cent to £55m.
Savings balances saw more modest growth, up to £9.2bn in the six months to June 30 from £9.1bn in 2014.
Its total charge for impairment losses fell to £5.5m in the period.
Chief executive Peter Hill said Leeds saw first-time buyers accounted for 37.3 per cent of total lending, accounting for more than 4,500 loans.
He said: “We continue to be active in supporting borrowers who are not well-served by the wider market, through initiatives including shared ownership and the Government’s Help to Buy equity scheme.”
Looking ahead, he said the organisation expects modest growth in the mortgage market in 2015, but with heightened competition in the sector.
As historically-low base rates continued, Leeds paid an average of 1.82 per cent across its savings range, 0.53 per cent above the rest of the market average, Mr Hill said.
Residential arrears of 1.5 per cent or more of outstanding mortgage balances fell to 1.62 per cent in the first half, compared to 2.12 per cent the previous year.
The building society’s Leverage Ratio was 5.6 per cent, up 0.01 percentage point from last year, almost double the minimum requirement of three per cent.
Mr Hill said the mutual is “very well-placed” to deal with economic shocks, despite uncertainty in the Eurozone.