27th Jun 2005 07:00
Scarborough Building Society27 June 2005 27 June 2005 RECORD SURGE IN SAVINGS CONTRIBUTES TO STRONG GROWTH FOR SCARBOROUGH BUILDING SOCIETY Scarborough, the UK's 18th largest building society, today announces strongresults across all areas of the business for the full year ended 30 April 2005. Highlights were:- - Group total assets up 12% to a record £1,610 million- Group pre tax profit up 8.5% to £5.1 million- Society management expenses ratio reduced again to 0.66%- Group Mortgage balances up 12% to £1,260 million- Retail savings balances up 17.5% to a record £1,057 million- Reserves up to £53.8 million Commenting on the Group's performance, John Carrier, Chief Executive, said: -"The £157 million increase in savings balances to a record £1,057 million isparticularly pleasing, given that we changed our approach during the year bydeliberately moving away from offering products with introductory bonuses. Webelieve that our new strategy, based on simple products, transparent terms andsustained value, is appealing to the many people who are tired of having to keepmoving their money around in search of a fair long-term deal. "Our mortgage products remained both competitive and innovative, contributing toa £132 million increase in Group mortgage balances to £1.26 billion. The growingdemand for flexibility in product design met with a positive response from theSociety and we were delighted to be rewarded with the Best Flexible MortgageProvider award by Moneyfacts, the UK's largest personal finance data provider.We also sought to be innovative during the year in an attempt to make financialservices products more interesting. In the first of what will be a series ofsuch initiatives, we became the first lender in the UK to give away a 42" PlasmaTV with two special fixed and tracker mortgage products. The quality of ourlending remained high, as reported arrears reduced again from last year's alltime low. "Despite significant growth in the business, we worked hard to bring aboutgreater efficiencies in our operations. Our overall costs reduced by £0.3million and, as a consequence, the Society's management expenses ratio reducedagain to 0.66%. Our objective is not to create profit for profit's sake, but togenerate sufficient profit to provide the capital strength needed to support ourongoing activities, re-inforcing the safety and security of the Society as ahome for our members' savings. Our pre-tax profit increased by 8.5% compared tothe previous year, and totalled £5.1 million. "Group total assets increased by 12% to a record £1.6 billion and our interestmargin reduced slightly to 0.92%, which is below the industry average and muchlower than the margins banks and former building societies need to generate inorder to satisfy shareholders. As a mutual business, we are able to use thismargin advantage to deliver better rates and service to our members.Furthermore, the profitable activities of our mortgage asset trading and thirdparty administration subsidiary businesses, North Yorkshire Mortgages (NYM) andSMS Mortgage Services, continued to complement our core building societyoperations. "Intense competition should continue to benefit savers and probably lowerinterest rates will make for a positive climate for borrowers. However, thecooling housing market will present challenges for financial institutions. WithGroup assets of £1.6 billion and a further £1.1 billion of assets undermanagement, we have an ideal platform from which to respond to the needs of ourcustomers and reward them by exceeding their expectations."-Ends- Notes To Editors FOR FURTHER INFORMATION, PLEASE CONTACT JOHN CARRIER, CHIEF EXECUTIVE, OR ROBINLITTEN, FINANCE DIRECTOR, ON (01723) 504211 Enclosures:-Consolidated Income and Expenditure Account for the year ended 30 April 2005.Consolidated Balance Sheet as at 30 April 2005. SCARBOROUGH BUILDING SOCIETY GROUP FINANCIAL RESULTS FOR THE YEAR ENDED 30 APRIL 2005 SUMMARY 2005 2004 Restated £m £mINCOME AND EXPENDITURENet Interest Receivable 14.0 14.6Other Income and Charges 6.4 5.7 _____ _____ 20.4 20.3 Administrative Expenses (15.3) (15.6)Provisions - - ____ ____ Profit before Taxation 5.1 4.7 Taxation (1.6) (0.9) ____ _____ Retained Profit for the Financial Year 3.5 3.8 ____ _____BALANCE SHEETLiquid Assets 305 278Commercial Assets 1,260 1,128Fixed and Other Assets 45 32 _____ _____ Total Assets 1,610 1,438 _____ _____ Shares and Borrowings 1,510 1,347Other Liabilities 16 8Subordinated Liabilities 15 15Subscribed Capital 15 15Reserves 54 53 _____ _____ Total Liabilities 1,610 1,438 _____ _____ Following the early adoption of FRS17, 2004 figures have been restated to bringthe pension deficit onto the balance sheet. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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