Skipton assets top £25bn but profit slips to £153m

Skipton Building Society said its assets increased 9.9% to £25.5 billion in the year to December 31, 2019, but profit before tax fell to £153.2 million from £188.7 million in 2018.

The UK’s fourth largest building society said its membership increased by 35,868 to 1,046,294.

Mortgage lending rose 13.1% to £4.9 billion during the year.

Society savings balances grew 7.6% to £17.4 billion.

Net interest margin was 0.98% (2018: 1.09%) with the expected decrease “a reflection of the previously signalled intense competition in the mortgage market.”

Skipton said: “The decrease in total group profits was due to the reduction in underlying profits … but also includes fair value losses of £3.4m (2018: fair value gains of £1.0m) relating to the Society’s legacy equity release portfolio which was acquired on merger with Scarborough Building Society in 2009 and has a balance at the end of 2019 of £410.0m (2018: £410.9m).

“These fair value losses are driven by changes in market expectations of long-term interest rates, inflation and house price growth …”

Skipton CEO David Cutter said: “This is a solid and balanced performance which has seen us increase our membership and increase our mortgage and our savings balances at rates above our natural market share, despite a subdued housing market and highly competitive mortgage market.”

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