Record profit for Leeds Building Society

Feb 24 2010 by Iain Laing, The Journal

LEEDS Building Society has shrugged off economic woes and intense competition for savings deposits to post a record profits haul for 2009.

The UK’s sixth largest mutual said underlying earnings rose 17% to an all-time high of £80.1m, while pre-tax profits leapt 56% to £31.7m last year as the group attracted 59,000 new savers - an increase of a third on 2008.

The building society sector has been battered during the financial crisis, consolidating to survive and hit by stiff competition as banks left unable to rely on wholesale markets for funding have instead turned to savers’ deposits.

Leeds revealed the toll of the recession and rising unemployment on its members, with impairment losses rising by nearly two thirds to £52.5m in 2009 as borrowers struggled with their repayments.

Its homeowner arrears rate rose to 2.24% from 1.26% in 2008, although the society confirmed this had started to ease back since the summer.

The recession and housing market downturn also impacted the mortgage market, with the group’s gross lending down to £922m from £1.28bn the previous year.