Skipton H1 profit £159m as balances top £19bn

Skipton Building Society said on Tuesday its savings balances grew by 3.9% to £19.4 billion in the first half of 2021 as total group profit before tax rose to £159.2 million compared to £34.4 million at June 30, 2020, during the pandemic.

Skipton CEO David Cutter said: During the first six months of the year, Skipton has become the UK’s eleventh largest mortgage lender, with more people than ever having turned to us to help them have a home.

“We continue to play a significant role in getting first time buyers across the UK the keys to their first homes, with Skipton cash Lifetime ISA (LISA) customers benefiting from £64.4m in government bonuses towards their deposits over the last six months alone.

“For our savers we’ve paid on average 0.39% more than the rest of market average on their hard-earned savings over the first five months of the year.”

In his outlook, Cutter added: “The financial results of the Skipton Group for the six months ended 30 June 2021 were outstanding, benefitting from a credit to loan impairment of £14.8m reflecting our updates to the economic outlook in light of the improving COVID-19 situation, principally due to the successful roll out of vaccines, as well as a gain of £27.1m on recognising TM Group as a subsidiary (previously a joint venture) at the date of acquiring Countrywide plc, whilst incurring £38.3m of amortisation accounting charges associated with the acquisition.

“The outlook for the Society is positive and it is well positioned to face into the uncertainties that exist as the UK moves to the next stage of living with the pandemic, as social distancing restrictions are eased, government furlough support comes to an end, and evidence emerges on whether inflation increases are transitory or structural.

“The significant improvement in the economic outlook since the year end has increased the confidence of both consumers and lenders, increasing the competition in the mortgage market, and we expect the downward pressure on mortgage margins to continue.

“The hectic housing market in recent months is unlikely to be sustained and is expected to level off in the second half of the year.

“But societal changes, such as the desire for more space and different commuting habits, appear more permanent and the core fundamentals supporting the housing market remain positive.

The Society’s strong financial position, diversified business model and compelling customer proposition mean it is well placed to continue to deliver for its members during these uncertain times”.