Skipton assets top £23bn; warns on ‘subdued housing’

David Cutter

Skipton, the UK’s fourth largest building society, said on Wednesday its 2018 underlying profit before tax rose 12.3% to £186.1 million.

Skipton increased its membership 10% during the year to more than one million and grew its assets 10.4% to £23.2 billion.

However, Skipton warned it expects profits in 2019 will be lower than 2018 “due to a combination of ongoing pressures on mortgage and savings margins, and the continuation of a subdued housing market.”

2018 gross mortgage lending slipped to £4.3 billion from £4.5 billion, the reduction “being a reflection of the intensity of competition within the mortgage market, together with the impact of more stringent customer affordability criteria the Society introduced towards the end of 2017.”

Skipton’s mortgage balances grew by £1.6 billion to £18.2 billion, including £139 million of balances from the merger with Holmesdale Building Society.

Savings balances grew by £1.1 billion to £16.1 billion.

Skipton CEO David Cutter said: “These are yet another set of strong results for Skipton, and I’m really proud that we now serve over one million members.

“We also saw continued good growth in our mortgage and savings balances whilst maintaining a strong capital base.

“Looking after people’s savings and enabling home ownership is at the very heart of what the Society does as a mutual building society.

“I firmly believe that our long term focus of being there to help people plan for their life ahead is resonating with our members.

“The more competitive mortgage environment coincides with a continuous period of increased political uncertainty, as the UK is in the midst of withdrawing from the European Union.

“Should there be a no-deal Brexit there would be no immediate significant impact on the Society but we would be cautious regarding the potential medium to longer term implications arising from possible movements in house prices, unemployment or bank base rates.

“We currently anticipate that profits in 2019 will be lower than 2018 due to a combination of ongoing pressures on mortgage and savings margins, and the continuation of a subdued housing market.

“However, the political and economic uncertainty highlighted above makes forecasting difficult and creates a need for caution.

“We remain vigilant regarding potential economic headwinds, but with the strong capital and liquidity position we have continued to build during 2018, the Society is well placed to manage the risks that we may face and to capitalise upon any opportunities that may arise for the benefit of our members.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.