Skipton Building Society posts £160m first-half profit

The group, which also owns estate agent Connells, says its mortgages and savings unit saw pre-tax profit jump by 48% to £128.3m in the six months to the end of 30 June, “due principally to increases in net interest income and improved interest margins”.

In May, the mutual posted its highest ever month for mortgage applications, totalling £1.1bn. It also approved mortgages to 6,200 first-time buyers during the half year and extended its shared ownership offers to 95% loan to value.

However, Connells saw its pre-tax profit fall 64% to £28.9m, with the group adding that last year the estate agent’s profit was buoyed by £29.3m of fair value gains and “exceptional housing market demand, fuelled by stamp duty reliefs and people’s changing housing needs following the pandemic”.

The group’s net interest margin was 1.29%, compared to 0.97% a year ago. Its common equity tier 1 ratio reduced to 36.5%, from 44.6% at the end of December, driven primarily by the move to hybrid internal ratings based models in response to regulatory changes introduced in January.

Skipton’s interim group chief executive Ian Cornelius says: “These results for the first half of 2022, including the excellent growth achieved in both mortgages and savings, are the result of the great work by colleagues across the society and their unwavering focus on helping our members at every life stage by offering great value, great service and a strong proposition that meets their needs.

“Public and personal finances have rarely been under such pressure as they are today. While faced with significant uncertainties, Skipton is in a robust position to meet the challenges ahead.”