Yorkshire Building Society reports “significant progress” during 2009

YORKSHIRE Building Society reported “significant progress” during another year for financial markets – despite losses of £12.5m.

The society, which has its roots in Huddersfield, said it had maintained one of the strongest capital positions of any major UK lender during 2009, while delivering value and protection to members

But profits were hit as provision for bad totalled £58.5m in 2009 compared to £24m in 2008.

The Bradford-based mutual insisted the provisions were “an appropriate step taken in response to the harsh economic conditions”.

It said integration planning was well advanced following December’s announcement that it intended to merge with Chelsea Building Society.

During the year, Yorkshire opened 250,000 new savings accounts and attracted more than 140,000 new members to take the total to more than 2.1m. It also opened 10 new high street agencies.

Savers were protected from full impact of base rate cuts – delivering an estimated £85m additional interest benefit to loyal investing members throughout the year.

The society also reduced its reliance on wholesale markets – with more than 90% of mortgages funded by member savings.

The society said its proposed merger with Chelsea, the UK’s fifth largest society, would considerably strengthen Yorkshire’s ability to compete effectively as a secure alternative to the retail banks.

It said the merger of Barnsley Building Society had now been completed – with Barnsley operating as a distinct brand offering an improved product range and maintaining its own branch network and online channel to support more than 60,000 members.

Despite severe competition from taxpayer-funded banks, member savings balances rose to £13.8bn. Group assets totalled £22.7bn, a slight reduction to reflect the society’s conservative approach to lending in an uncertain environment.

Liquid assets rose to 31.9% of shares, deposits and loans. Group operating profit before provisions totalled £48.7m – up 11% on 2008. Core operating profit after provisions stood rose by £1m on the half-year to £7.7m.