Following its annual results out today, Leeds chief executive Peter Hill said: “Our rise in profit has been driven by growth in mortgage lending across a balanced product range, and lower impairment provisions.”
He outlined the 12th biggest lender’s (figures to date) progress as a lender on new-build homes and its support for the Government’s Help to Buy equity scheme.
The mutual reported year-on-year residential mortgage lending growth of 24%.
Hill said a strong profit performance driven by the growth in lending has enabled ongoing investment in the business to further develop the service proposition and provide long-term value to a growing membership.
The lender also reported net residential lending of £1.1bn and operating profit before exceptional item rose by 26% to a record £80.9m, up £64.2m on 2013.
Savings balances grew by £560m to £9.2bn, the highest level in the mutual’s history and its capital and reserves increased to £731m from £661m in 2013.
Hill said: “I am proud to report this excellent performance, which builds on similarly successful results we’ve delivered over the past three years.
“These achievements illustrate how our growth strategy – including investing in the best talent and modernising our brand and the ways in which we can meet our members’ needs – is enabling us to compete with larger rivals to attract more savers and borrowers in a challenging marketplace.
“We have developed our brand proposition, following extensive member research, and plan further improvements to our digital capability to make it easier to access the information and services our members want, as and when they choose.”
Leeds said it paid 0.81% more to savers than the market average in 2014.
Operating profit has been driven up by record mortgage lending and a reduction in impairment losses, and a continued reduction in its commercial exposure to less than 3% of mortgage balances, it said.
Hill said at the start of last year, a package of reforms to EU legislation, known as CRD IV, came into effect. A key requirement is that financial institutions have a minimum Total Solvency Ratio of 8%, and a Leverage Ratio of 3%. The Society’s ratios are above those figures, at 16.4% and 5.6% respectively.
Leeds Building Society has 67 branches throughout the UK, Gibraltar and Ireland and assets of £12.1bn (as at 31st December 2014). The Society has operated from the centre of Leeds since 1886.
Leeds was one of several lenders to raise its procuration fees in January to bring it ‘in line with the market’ and launched two interest-only products last November.
