Growth in mortgage lending has driven profits of £243m at Yorkshire Building Society in the first half of this year.
The £95.7m jump in statutory pre-tax profit was attributed to growth in mortgage lending, with balances increasing 3.3% and some 25,000 new mortgages supplied. Interim CEO Alasdair Lenman, who will serve until a replacement is found, said the Society’s profits would help secure its position and fortify it against shocks and challenges that may lie ahead.
Savings balances rose from £35.2bn to £37.7bn thanks to “competitive positioning” of savings products, increases to back-book rates and a member loyalty programme. The Society said market expectations for the base rate may make retail savings increasingly attractive.
Mr Lenman said: “Looking back on the first half of 2022, the environment in which we operate has been subject to considerable change. External factors including geopolitical and economic uncertainty, and the conflict in Ukraine, have all had a bearing on the financial services sector to some degree. Despite this, I am able to report on a period where we have delivered against the key elements of our purpose, as well as having delivered a balanced and positive set of financial results.
“Helping people to have a place to call home is one of our central ambitions. In 2022, the market for mortgages has been subject to a high degree of volatility and increased levels of competition. Our adaptability and agility as an organisation have helped us to perform strongly despite the challenging environment, just as they helped us through the disruption experienced over the last two years
“As a result, we maintained a high level of gross mortgage lending at £5.3bn (2021 H1: £5.9bn), and so far this year we have helped 28,000 people to have a place to call home (2021 H1: 49,000).”
On the market outlook, he added: “Elevated levels of uncertainty continue to characterise the political and economic environment. Risks stemming from the potential emergence of a new coronavirus variant remain, and central banks will have to contend with the global inflationary pressures which were further heightened following the invasion of Ukraine.
“There are expectations that consumer prices index (CPI) inflation will rise over the remainder of 2022, averaging slightly over 10% at its peak in the final quarter. A main driver of the increase is expected to be due to higher household energy and food prices, exerting pressure on real disposable incomes. The outlook for gross domestic product (GDP) growth in the UK has weakened due to the cost-of-living crisis and its impacts on consumer spending.”
