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YBS mortgage lending up £600m to £5.9bn in H1

Samantha Downes
Written By:
Posted:
July 27, 2022
Updated:
July 27, 2022

Yorkshire Building Society’s lending rose from £5.3bn during the first half of 2021 to £5.9bn the same period this year, while its pre-tax profits rose from £147.7m to £243.4m.

In its interim half yearly results, Yorkshire Building Society said its share of the mortgage market grew from 3.2 per cent during the six months ending December 2021 to 3.4 per cent in the first half of 2022.

Mortgage balances rose 3.3 per cent although this compared to 5.7 per cent during the first half of 2021. The number of new residential mortgages on its books during the same six month period fell from 27,000 to 25,000.

In the first half of this year, YBS’s net mortgage lending totalled £2.1bn. This was slightly lower than 2021’s £2.4bn, when completion volumes were boosted by external incentives including the increase in the stamp duty threshold.

Success of intermediary channel

YBS said its lending performance in 2022 was supported by increased growth in its Accord Mortgages Limited (Accord) intermediary buy-to-let channel, where its newly launched product propositions and adjusted criteria were well-received by brokers and customers.

YBS’s operating profit rose from £134.9m to £192.5m during the period and the average savings rate paid rose from 0.60 per cent to 0.69 per cent.

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Alasdair Lenman, interim chief executive officer, said the society’s results were driven by mortgage growth in the last twelve months which had been supported by the impacts of the succession of increases to the bank rate.

He said: “This has seen our cost to core income ratio reduce to 42.3 per cent from 50.4 per cent a year ago, our core operating profit increase to £192.5m and statutory profit before tax reach £243.4m.”

“Our levels of capital and liquidity remain robust and comfortably above regulatory minimums.”

Conflict in Ukraine

Lenman, who also thanked outgoing interim chief executive Stephen White added: “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.

Speeding up mortgage processes

Lenman said the society had put in place internal process improvements to increase the speed and efficiency of approving its mortgage products. He said: “We and have also implemented a new pricing proposition which will allow us to support even more customers than before, many of whom are first-time buyers. We look forward to delivering further enhancements in line with our strategic priorities.”

YBS has expanded two of our social initiatives during 2022. The first is the launch of its Money Minds website, which aims to help 11- to 19-year-olds feel more confident about their finances and prepare them for the world of employment. The second is the expansion of its partnership with Citizen’s Advice after a successful pilot. The expansion will mean that free, independent, face-to-face advice will be available to members of the public from 18 of its branches.

 

Climate and ESG commitments

Lenman said progress was being made on it strategy to manage the risks and financial implications of climate change.

“YBS, along with the wider financial services industry, has a role to play in helping to mitigate and support the management of the risks posed by present and future climate change.

“As part of our 2021 annual report and accounts, we included our taskforce on climate-related financial disclosures (TCFD) report and announced our ten climate commitments, which together describe the action we will take in order to safeguard the interests of our members and customers.

“We look forward to disclosing our progress against these commitments in our 2022 annual report and accounts and each year thereafter. Alongside this, we have also re-focused our commitment to environmental, social and governance (ESG) issues; our first, dedicated ESG report has now been published.”


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