Savers seeking a secure home for their cash and increasing demand for loans for green projects helped a West Yorkshire financial services minnow succeed in its toughest year in 2009.

The Silsden-based Ecology Building Society boosted net profits along with savings and mortgage balances in what it said was probably the toughest market conditions in its 29-year history.

In spite of this the Society did not suffer any losses in its lending or treasury operations, unlike some of its larger rivals.

Asset growth was driven mainly by new savings inflows as depositors sought both safety and transparency following the banking crisis. Such was the surge in retail deposits, the Ecology trimmed interest rates to keep inflow under control and ensure that the level of assets was adequately supported by the Society’s capital base.

In the year to December 31, 2009, the Ecology increased net profits £344,000 from £319,000 the previous year. Mortgage assets rose by 9.1 per cent to £62 million while savings balances increased by 8.54 per cent to £87.2 million.

Chief executive Paul Ellis said the Society needed to maintain healthy profit levels to meet anticipated increases in regulatory capital requirements and potentially higher Financial Services Compensation Scheme levy payments.

He said: “I am delighted to announce such a strong set of results again this year, especially in the face of such a challenging operating environment. It is particularly pleasing that the quality of our lending remains of a very high standard.

“The fallout from the financial crisis is undoubtedly continuing to influence many when choosing where to place their savings and examine what use they are put to and this is proving to the benefit of ethical and mutual financial providers like us.

“We are committed to expanding our services, including developing our internet offering and enhancing our mortgage range to incentivise more UK homeowners to reduce their carbon footprint and benefit from a financial model that puts people and the planet first.”

Mr Ellis was confident that the Ecology would build on its specialist position and expand its ecological lending programme, in spite of fragile economic conditions. This included offering a one per cent discount on loans used for the installation of energy saving measures and renewable technologies in existing homes.

Total provisions for possible mortgage losses increased to £170,000, against £52,000 in 2008 due to a new provisioning method. Mr Ellis said this was considered prudent in light of market conditions.

  • Balances held in savings accounts at mutual institutions increased by £807 million in February compared to reduction in balances of £467 million in January, new Bank of England figures show. After interest credited to accounts is excluded, mutuals had a net receipt of £623 million in February.