Leeds continues growth
– 15% rise in assets to a new record level of £7.1bn
– Pre-tax profits up by 18% to a record £50.2m
– Record mortgage lending of £1.7bn (£1.6bn in 2004)
– Savings balances rise by £446m to a record £4.5bn
– Cost asset ratio improved again to 62p per £100 of assets (67p in 2004), one of the lowest levels of any bank or building society
– Cost income ratio improved even further to 44% from 47% one of the best in the industry
– Increase in reserves to a record £351m
For the first time, these annual results have been prepared under International Financial Reporting Standards.
Chief executive, Ian Ward, said: “In 2005 we achieved a further milestone with our assets now exceeding £7bn, up from £6.1bn a year ago and £5.3bn in 2003. The Society’s pre-tax profits rose by 18% and exceeded £50m for the first time. This continues our decade of year-on-year increases, which is unique amongst the major societies.
“These levels of growth and profit have been achieved without a similar rise in costs. We significantly improved our cost asset ratio to 62p per £100 of assets from 67p. The other key measure of efficiency is the cost income ratio and the Society’s is one of the lowest in the industry, which means that for every £1 in income earned we spend only 44p, down from 47p.
“We achieved a record level of new mortgage advances of £1.7bn through a variety of distribution channels to meet customers’ requirements, all of which produced an increase in volume in 2005 when compared to the previous year. This demonstrates that we are providing our customers with a wide choice of competitively priced mortgages supported by a fast and efficient service.”
“During 2005 the Society’s savings balances rose to a record £4.5bn and our volume of net receipts was 20% greater than our natural market share. Our flexible, straightforward, good value for money products were well received. In the independent customer satisfaction surveys undertaken on our behalf, our savers regularly say that their experience of our products and service is significantly better than that provided by many other organisations.
“The Directors of Leeds and Mercantile Building Societies have announced that they have agreed a merger, which is expected to be effective on 1 August 2006, subject to approval by the Mercantile members and confirmation by the Financial Services Authority (FSA). Mercantile members will be invited to vote on the proposal at their Society’s AGM at the end of April. The FSA has consented to Leeds Building Society proceeding by Board resolution and the combined Society will be named Leeds Building Society.
“We are very proud of the record breaking financial results that we delivered in 2005. Our financial strength, combined with the investments we have made in technology, service and staff, means that we are extremely well placed to achieve the objectives we have set to make Leeds Building Society even more successful in the short, medium and long term.”