The figures show a 254% increase on the same period in 2011 and are largely due to an £12m turnaround in the performance of the mutual’s mortgages and savings division, which made a pre-tax profit of £3.9m compared to a loss of £8.1m last year.
The division also posted a £9.5m decrease in impairment charges on its loans, falling from £17.2m in the first six months of last year to £7.7m in H1 2012. The society said that its prudent borrowing was the reason behind the reduction in arrears.
The group’s net interest margin, which largely indicates the profitability of the mortgages and savings division, grew from 0.50% in the first half of 2011 to 63%. Skipton’s gross mortgage lending reached £663.4m in the first six months of the year.
HML, Skipton’s mortgage servicing business, also made a pre-tax profit of £0.1m, bouncing back from a £3.2m loss in the same period last in 2011.
The results also revealed that 81.22% of Skipton’s total funding was derived from retail savings balances, up from 77.88% on 30 June 2011, with 99% of its residential mortgage lending funded by these balances.
The society also raised £475m in funding from its second securitisation during the period.
David Cutter group chief executive at Skipton, commented: “I am pleased to announce the increase in our profitability and overall performance over the past six months which is the result of our ongoing clear strategy of prudent growth, balanced with cautious management of our business and a steadfast focus on the needs of our members.
“We are not complacent as we enter the second half of 2012, given the continued economic challenges facing the Eurozone in particular and the UK in general.
“However, we remain confident that the strength of the diversified Skipton Group, coupled with our plans for managing future challenges which might emerge, will continue to stand us in good stead as we provide a reliable haven for meeting our members’ financial needs.”
Recent figures from the CML showed that Skipton BS more than trebled its market share during 2011, the mutual now holds a 1.1% share of the mortgage market.
