Yorkshire Building Society has demonstrated continued resilience and has made significant progress in the second half of the year in what has been another challenging year for the financial markets. The results show that the Society maintained one of the strongest capital positions of any major UK lender, whilst delivering value and protection to members.
Exceptional market conditions during the year also presented strategic opportunities and in December 2009 Yorkshire announced its intention to merge with Chelsea Building Society. The enlarged Society will create a second major force in the building society sector, strengthening Yorkshire’s ability to deliver value to members and its position as a strong competitor to UK retail banks. Integration planning is well advanced.
Key Highlights in 2009
Member Benefits and Activity
- Savers protected from full impact of base rate cuts, delivering an estimated £85m additional interest benefit to loyal investing members throughout the year.
- 250,000 new savings accounts were opened during the year.
- Over 140,000 new members attracted in the year, taking total membership to over 2.1m
- Strengthened capital position during the year, giving Yorkshire one of the strongest capital ratios of any major UK bank or building society.
- High level of quality liquid assets maintained.
- Reduced reliance on wholesale markets with over 90% of mortgages funded by member savings.
- Focus on low risk, prime residential mortgages.
Merger Activity
- Announced proposed merger with Chelsea Building Society, the UK’s fifth largest society, thus considerably strengthening Yorkshire’s ability to compete effectively as a secure alternative to the retail banks. Members of both societies voted overwhelmingly in favour of the merger and good progress has been made on integration planning. Chelsea’s full year results performance, announced today, is ahead of expectations.
Completed integration of Barnsley Building Society, which now operates as a distinct brand offering an improved product range and maintaining its own branch network and online channel, supporting over 60,000 members.
Yorkshire Building Society has demonstrated continued resilience and has made significant progress in the second half of the year in what has been another challenging year for the financial markets. The results show that the Society maintained one of the strongest capital positions of any major UK lender, whilst delivering value and protection to members.
Exceptional market conditions during the year also presented strategic opportunities and in December 2009 Yorkshire announced its intention to merge with Chelsea Building Society. The enlarged Society will create a second major force in the building society sector, strengthening Yorkshire’s ability to deliver value to members and its position as a strong competitor to UK retail banks. Integration planning is well advanced.
Financial Performance
The Society remains one of the UK’s strongest financial institutions and improved on its capital position during 2009
- Despite severe competition from government backed financial institutions, member savings balances increased to £13.8bn.
- Strong balance sheet with Group assets at £22.7bn – a slight reduction reflecting our conservative approach to lending in an uncertain environment.
- Solvency ratio increased to 15.6%, with Tier 1 at 14.2% (of which 12.2% is Core Tier 1).
- Liquid assets increased to 31.9% of Shares, Deposits and Loans.
- Group operating profit before provisions of £48.7m, an increase of 11% on last year.
- Core operating profit after provision of £7.7m after an improved second half of the year.
- Statutory pre-tax loss, including mortgage loan losses provisioning, at £12.5m – an improvement from a loss of £22m at 30 June 2009 as a result of a £10m profit in the second half of the year.
Iain Cornish, Chief Executive of Yorkshire Building Society said;
“I am pleased to report that the Yorkshire has demonstrated continued resilience throughout 2009 and has maintained a strong underlying performance.
We are seeing green shoots in the housing and mortgage markets and we are very optimistic about the future prospects of the Group and plan to prudently increase our lending in core prime residential mortgages. Our agenda, through the merger with Chelsea Building Society, is to provide a compelling alternative to banks and a real choice to consumers across the UK”.
Yorkshire Building Society is the second largest building society. Following its merger with Chelsea Building Society, the enlarged Yorkshire Group will have assets of approximately £35bn and 178 branches and 75 agencies throughout the UK.