finance

Building Society's pandemic profit boost



The Scottish Building Society today reported a 34% increase in profit before tax amid the “extreme conditions” of the Covid-19 pandemic.

The Edinburgh-headquartered society announced a record £74m increase in mortgage lending and a £58m growth in savings balances.

Chief executive Paul Denton said the strong performance was driven by a commitment to support Scottish homeowners in tough times.

The number of active members of the society increased by 9%, while new mortgage lending doubled and savings balances rose 18%.

Denton said: “Throughout our 173 years, we have supported members through wars, recessions and now a generation-defining pandemic.

“As a society, we have adapted quickly whilst staying true to our purpose: to help members ‘build for the future’.”

The society stayed open for customers throughout lockdown and did not use any government support schemes, such as furlough or rates relief.

Denton said that serving the interests of the society’s members remained the focus. “It is not all about growth – during the pandemic staff worked tirelessly to support members impacted financially by Covid-19.”

It allowed more than 500 members to defer mortgage payments by up to six months, with the “vast majority” are now back on a stable footing.

The reduction in the Bank of England Bank Rate created pressure on our margins, but strong mortgage growth and tight control of costs meant operating profit for the year increased by 120% to £971,000.

“With an uncertain economic outlook, we prudently increased our impairment provisions, however, despite these our profit before tax for the year increased by 34%,” Denton stated.

“I am particularly proud of the fact that the growth in profits is a direct result of increased mortgage lending and that our savings members still benefit from market leading rates, particularly on our Loyalty ISA.”

The society is opening a new Aberdeen branch, but noted that digital innovation is vital to attract members.

In January it launched a new digital savings and mortgage service – SBS Online.

Chairman Raymond Abbott added: “These results demonstrate what the society is capable of, even during extreme conditions, and our plans for the years ahead aim to build on this excellent foundation.”

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