Skipton Building Society has delivered a “solid and balanced performance” despite a challenging environment.
For the year to 31 December 2019, the group reported underlying profits before tax of £155.2 million compared with £186.6 million in 2018.
Total profit before tax was £153.2 million (2018: £188.7m), a decrease the group said was due to the reduction in underlying profits amidst a challenging environment, but also includes fair value losses of £3.4 million (2018: fair value gains of £1m) relating to its legacy equity release portfolio which was acquired on merger with Scarborough Building Society in 2009.
Although the group has seen a £3.1 million fall in its net interest income, due to intense competition in the mortgage market, it has continued to invest in its proposition and service. This resulted in costs in the Mortgages and Savings Division increasing by £7.9 million.
The Group also incurred a charge of £1.8 million (2018: £4.2m credit) in relation to the long-term management incentive scheme in place for senior managers within the Group’s Estate Agency division.
The Estate Agency division recorded underlying profits of £50.1 million – £9.6 million below the previous year, a fall the group attributes to the subdued UK property market.
“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,” said Chief Executive David Cutter.
“In the face of a challenging operating environment, Skipton has continued to deliver first class service and value to its members.”