Mortgage loans up sharply at Leeds mutual

THE LEEDS Building Society hiked mortgage lending on the back of rising savings deposits and support from the Bank of England’s Funding for Lending Scheme (FLS), the mutual announced yesterday.

Pre-tax profits came in at £52.4m for 2012, up four per cent on the year, while capital and reserves rose seven per cent to £614m.

New mortgage lending jumped 35 per cent to £1.65bn, while net residential lending soared to £737m, more than double the £300m recorded in 2011 and the building society’s highest ever figure.

The group attracted an extra 61,000 new members, including 39,000 savings members taking total membership to 696,000 and savings balances up £384m to £7.74bn.

In also raised £375m in long-term wholesale markets and drew down £200m from the FLS.

“Whilst this initiative supported our mortgage volume aspirations, retail savings remain the core of our funding requirements, and will con- tinue to be so, as we look to grow the business over the coming years,” said chief executive Peter Hill.

“All of our residential mortgage balances are funded entirely by members’ savings. Our whole-sale funding ratio reduced to 18.8 per cent, compared to 19.2 per cent a year earlier.” In a sign of improved market conditions charges for impairment losses fell £6.6m to £41.9m, while residential arrears fell from 3.23 per cent to 2.89 per cent.

But an increase of 30 jobs contributed to a small annual rise in the building society’s cost ratio from 31 per cent in 2011 to 33 per cent in 2012.