Skipton Building Society is predicting a year of consolidation after posting a nine per cent drop in profits.

The society's pre-tax profits fell from £58.5 million in 2000 to £53.2m in 2001, although its assets were up 6.25 per cent to £6.2 billion.

The group puts the profits reduction down to the effect of last year's sale of its share dealing service, Dealwise - which boosted the bottom line to the tune of £82m, £50m of which was returned to members.

Chief executive John Goodfellow said 2002 would be a time to 'bed in' the firm's 16 subsidiary companies, including four bought in the last 12 months. He said: "We see this as a relatively quiet year, but that doesn't mean we won't be adding to the portfolio.

"The year 2001 has proved to be one of considerable success, achievement and development for Skipton Building. At the end of a challenging year we believe we are uniquely placed to capitalise on the opportunities which our fast changing industry will present."

The Society's underlying profits were actually up 11.2 per cent, to £53.2 million, excluding the Dealwise sale, with loans and advances also up 5.89 per cent to £4.7bn.

Referring to the group's new firms (GMAP, Direct Life and Pensions, Skipton Business Finance and Industrial Equipment Finance), Mr Goodfellow said the policy of "prudent" acquisitions would continue.

He said: "Our Group structure ensures that we have a wide and varied range of interests across many sectors and these will, undoubtedly, reap benefits in the coming years."

Voted a 'Five Star' mortgage service provider by the readers of Financial Adviser in 2001, Skipton also introduced a Mortgate Discount Scheme during the year.

The loyalty-reward scheme applies a 0.3 per cent discount to the rate borrowers pay after they have been with the company for two years.