Profits have fallen at Yorkshire Building Society but remain high enough to help the mutual combat any future challenges, bosses say.
New results for the society – one of the country’s largest – show gross mortgage lending fell to £9.2bn from £10.3bn, though remained at historically high levels. Meanwhile, net lending fell from £3bn in 2022 to £1.6bn last year as there was a higher level of mortgage maturities and a smaller market.
The society said it was mindful of challenges facing homeowners, and that it had contacted those who it expected to be most impacted by significant interest rate increases during the year. It pointed to its joining of the Government’s Mortgage Charter, which sets out a range of measures to protect consumers.
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During the year it saw an uptick in loan arrears, with the number of accounts more than three months in arrears, including possessions, at 0.5%, up from 0.44% a year earlier. It said people across the UK had been forced to adapt to the cost-of-living crisis, underlying the society’s role in supporting financial wellbeing.
While net interest income rose from £724.1m to £786m, expenses increased £34m thanks to cost inflation and higher than average wage increases for staff to help them in the face of the cost-of-living challenge. Operating profit before provisions fell from £512.7m to £453.7m as statutory profit also fell from £502.5m to £450.3m.
Looking ahead, the society said global economic volatility and increasing competition from rivals was squeezing net interest margin across the industry. It pointed to the upcoming maturity of the Term Funding Scheme with additional incentives for SMEs (TFSME), which was designed to extend credit to businesses and households in the wake of Covid disruption, and said it could lead to great competition for retail savings balances.
Susan Allen, chief executive of Yorkshire Building Society, said: “The Yorkshire Building Society has delivered a strong set of results for 2023, further supporting our financial position, and our long-term sustainability.
“In an environment where higher interest rates have increased the cost of living for many, the Society has focused on supporting our members and customers. Over 2023, we provided savings rates that were consistently above the market average, and continued to support new and existing mortgage borrowers, all while achieving an increase in customer advocacy. Being a mutual allows us to make decisions in the interests of our membership, and we will continue to place providing real help with real life at the centre of all that we do.”
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
