Building society turns in record profits

The society is trumpeting its annual results, announced this week, as further proof of the benefits of remaining a mutual society - one owned by its members not shareholders.

The results show how Skipton is diversifying its business in a rapidly changing financial industry. Subsidiary companies such as its Connell estate agency group, third party mortgage administration company Homeloan Management and share dealing service Dealwise contributed 27 per cent of SBS's pre-tax earnings.

"The key success demonstrated through these results is the society's ability to increase group profits whilst also increasing the benefits to its members via a reduced interest margin," said chief executive John Goodfellow.

During 1999 the society was at the forefront of several innovations. It was the first major lender to offer a full mortgage range with no extended redemption 'lock-ins' and from January 1 it updated its entire mortgage portfolio so that interest is calculated on a daily basis.

"1999 has been an outstanding year for Skipton Building Society with record results," said Mr Goodfellow. "Our strategy for success has seen us continue to deliver tangible benefits to our members, staff and the communities we serve.

"Skipton's performance has demonstrated substantial growth in assets and profit, whilst at the same time operating on a reducing interest rate margin."

The society claims its results are a strong endorsement of its mutual status. It is backing a resolution calling on the board to consider taking steps to change its independent status and convert to a shareholder-owned company but stresses it does not regard this as a proposal to convert or a straw poll on the issue.

The results also show that group assets were up 17.42 per cent to £5.1 billion and that administrative expenses were 84 pence for every £100 of assets managed.

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