UK’s ‘Best Building Society’ announces record results for 2006
Leeds Building Society, which won the title of ‘Best Building Society’ in Mortgage Magazine’s 2006 awards, today announced record results for 2006.2006 Highlights
15% rise in assets to a new record level of £8.1bn
Pre-tax profits up by 14% to a record £57.2m
Mortgage lending increase of 17% to highest ever level of £2bn
Savings balances rise by an all time high of £734m to £5.3bn
Cost income ratio improved even further to 41% from 44%, one of the best in the industry
Increase in reserves to a record £407m.
Asset quality remains high with arrears ratio over 50% better than CML average
Chief Executive, Ian Ward, said: "We are delighted with our record breaking results in 2006. Our business is growing strongly with assets now over £8bn, more than treble the level of a decade ago and a 15% increase on 2005. Profits have also increased substantially during recent years with the 2006 figure being a record £57.2m, up 14% on 2005. This means we now have a thirteen year unbroken trend in year-on-year profit growth.
"One of the key achievements of the year was the successful completion of our merger with Mercantile Building Society on 1st August. The Mercantile had been based in the north-east of England for over 100 years and as part of the merger we now have a further 13 well-established branches in this area of the UK.
"The former Head Office of Mercantile in Wallsend, has been developed as an administration centre for the combined Society. This has provided much needed additional capacity for our rapidly expanding business.
"We attach great importance to our superior efficiency, as demonstrated by our very favourable cost ratios. This is essential in maintaining our keen product pricing in the competitive market in which we operate. Our cost income ratio improved to 41% from 44% a year ago. At that time, independent analysis from KPMG showed that this was the best performance of any building society and the 2006 result is superior to those of the societies that have, so far, announced.
"We achieved a significant uplift in both mortgages and savings during 2006 with our products featuring regularly in newspaper ‘best buy’ tables. We advanced a record £2bn of new mortgage loans, which was 17% above the previous best ever performance in 2005. Leeds Building Society is the only UK building society to lend in Euros and in 2006 we successfully extended our lending to all of Spain and Ireland. Pleasingly, redemptions of existing mortgages were below the industry average and this helped to contribute to very strong net lending of £695m, a 28% increase on the previous year.
"Our success has been achieved by selling mortgages through a variety of different channels combined with diversification of our product range and lending criteria.
"Savings balances rose by more than £730m to an all time high of £5.3bn. Our net receipts performance was £150m better than our building society market share.
"The Society won the title of ‘Best Building Society’ in Mortgage Magazine’s 2006 awards, which take into account long term value, customer service and how easy products are to understand. We were also awarded ‘Gold’ in the Lending Excellence Awards from Lending Strategy Magazine, in relation to an independent national consumer survey of 7,800 customers who have recently taken out a mortgage.
"I believe these results clearly demonstrate that a mutual building society can compete very effectively in a highly competitive market. After growing our assets to £5.3bn in 2003, we have achieved a milestone figure in each successive year with £6.1bn in 2004, £7.1bn in 2005 and now £8.1bn and I firmly believe that we have all the essentials in place to ensure that Leeds Building Society continues this dynamic growth."