TIDMLBS
RNS Number : 4776H
Leeds Building Society
28 July 2023
28 July 2023
Leeds Building Society 2023 H1 results
First time buyers make up half of all new borrowers as new
members boost savings to record high
Continuing to support new and existing borrowers in a volatile
and dynamic market helped Leeds Building Society to a strong
performance in the first six months of 2023.
A record 49% of all new borrowers were first time buyers as the
UK's fifth-largest mutual delivered on its purpose to put home
ownership within reach of more people, despite the challenging
economic conditions.
2023 H1 key highlights:
-- Helped even more first time buyers: almost half (49%) of all
new borrowers(1) were taking their first steps onto the housing
ladder, as the Society maintains its focus on helping more people
into home ownership and supporting affordable housing schemes such
as Shared Ownership, where we remain market leader(2) .
-- Strong lending performance: increased our market share of
gross lending to 1.62%(3) with a total of GBP1.9bn (H1 2022:
GBP2.5bn) including six of the 10 biggest days of lending in the
Society's history and June its busiest ever month for Shared
Ownership(4) lending.
-- Record savings inflows: with an inflow of GBP1.4bn, the
Society's biggest half year for new savings lifted total savings
balances to a record GBP19.1bn.
-- New membership record: more than 79,300 new members joined
the Society, taking total membership to a new record of
878,000.
-- Innovation to put home ownership within reach of more people:
the Society was the first lender to partner with Experian, enabling
potential borrowers to boost their credit score by taking account
of their regular outgoings, giving them a better chance of a
successful mortgage application. We also launched new savings
accounts specifically designed for those building a home deposit or
to staircase through Shared Ownership.
-- Maintained financial strength and security: increased total
assets to GBP26.9bn (H1 2022: GBP24.1bn), the highest in the
Society's history. Profit before tax was GBP116.2m (H1 2022:
GBP146.5m), supporting our ongoing commitment to reinvesting in the
business and prioritising good value for members.
Richard Fearon, Leeds Building Society Chief Executive Officer,
said:
"We've carried on lending across all market sectors and offering
competitive savings accounts during a sustained period of economic
volatility, seeing our membership climb to a new record.
"I'm proud of our continuing support for the affordable housing
sector and the fact that nearly one in two of our new borrowers in
the first six months of 2023 were first time buyers.
"After a long period at historic lows, interest rates have
continued to rise with the effects felt by borrowers and savers
alike, and we stand by both.
"As a business created to empower greater home ownership, we've
stayed actively lending in a fast-changing market throughout 2023
and since March have accepted earlier applications for product
transfers, giving existing borrowers six months before maturity to
choose their new deal.
"We've moderated the impact of repeated Bank of England Base
Rate rises by limiting increases in our standard variable rate and
have worked hard to support borrowers facing financial difficulties
with help tailored to their individual circumstances.
"Meanwhile for our savings members, we consistently pay above
the average market rate(5) , which equates to more than GBP90m
extra in their pockets.
"In response to continuing Base Rate rises, we've passed on
increases to all our variable rate member savings accounts in a
sustainable way intended to offer fair value across our range.
"We continue to invest in member value, technology which
improves service, and in our fantastic people - their dedication
and commitment to the Society's purpose gives me confidence for the
future, however challenging times may be.
"We've been there for our members during tumultuous external
events throughout our long history and our financial strength and
security means we'll continue to support them."
Supporting new and existing borrowers
-- Retained position as the market-leading Shared Ownership
lender, and secured the title of Best Shared Ownership Mortgage
Lender in the 2023 What Mortgage Awards for the eighth consecutive
year. June was our busiest ever month for Shared Ownership
completions.
-- Were among the first signatories to the Government's new
Mortgage Charter and the first lender to launch a simple, digital
application process for borrowers seeking assistance.
-- While the Charter formalises and extends the support measures
we offer to borrowers in need, we continue to go further - we are
not charging arrears fees, having stopped these charges early in
the Covid-19 pandemic.
-- Remain committed to supporting existing borrowers in taking
product transfer alternatives to SVR, accepting applications for
new deals six months before their current mortgage term
matures.
-- Launched Experian Boost, a unique partnership with financial
data business Experian, which is already giving more first time
buyers a better chance of a successful mortgage application.
-- Continued to lend responsibly at all LTV (loan to value)
bands up to 95%, serving new buyers with smaller deposits or
existing homeowners with less equity.
-- Launched Home Deposit Saver, a regular savings account with a
top up of GBP500 when the saver receives their Leeds Building
Society mortgage offer. Designed with first time buyers in mind but
available to all prospective home buyers.
-- Moderated increases in SVR by limiting the number of times
rises have been passed on following changes in Bank Base Rate.
Since December 2021, the Bank of England's Monetary Policy
Committee has raised Bank Base Rate by a total of 4.90%, whereas
the Society's SVR has increased by 2.70%.
-- Arrears levels remain broadly stable at 0.63% (H1 2022:
0.62%), demonstrating our borrowers remain resilient and we
continue to stress test for affordability at prudent levels to lend
responsibly.
Supporting savings members and sustainably investing in value,
service and financial security
-- In a rising rate environment, continued to consistently pay
savers more than the average market interest rate, equating to an
annual benefit to our savings members of more than GBP90m.
-- Offered highly-competitive fixed rate savings products, a
market which has seen significant growth in demand this year, and
secured 93 Best Buys for our ISAs and non-ISA products(6) .
-- Record inflows of GBP1.4bn took total savings balances to a record GBP19.1bn.
-- Invested in improving service and refurbishing premises
across our national branch network, demonstrating our commitment to
face-to-face service where this remains sustainable.
-- Increased capital and reserves to GBP1.70bn (H1 2022:
GBP1.57bn ), well above the regulatory requirement, and continue to
retain very strong levels of liquidity.
-- Cost income ratio remains among the lowest in the financial services sector at 40.4%.
-- Continued with our multi-year IT investment programme to
increase functionality, security and resilience, and make our
systems simpler and quicker to use for our members, colleagues and
intermediary partners.
-- To help members tackle their environmental impact, introduced
an Energy Saving Tool on our website for homeowners to identify
ways to cut their energy use and save money.
-- Made good progress on advancing our Inclusion and Diversity
vision, including introducing pronoun badges for colleagues.
-- Continued to provide excellent service to our members, with
satisfaction levels at an all-time high (94%).
-- Launched partnership with leading insurance technology firm
Uinsure, offering members quicker and simpler access to insurance
quotes.
-- Extraordinary support from colleagues and members took
fundraising for our national partner Dementia UK beyond GBP700,000,
smashing the original GBP500,000 target. Also this year, branch
colleagues welcomed the charity's specialist Admiral Nurses for
in-person clinics through our Closer to Home project, bringing
dementia care to more families across the UK.
Ends
(1) 7,700 out of 15,800 new mortgage members in H1 2023 were
first time buyers.
(2) Based on mortgage brokers producing the most Shared
Ownership illustrations for Leeds Building Society products out of
any lender from the Twenty7Tec sourcing systems between 1 January
2023 and 30 June 2023.
(3) Based on five months to May 2023. Calculated using UK
mortgage market data obtained from UK Finance.
(4) Source: LBS internal applications data for main loan (not
further advances) Shared Ownership cases.
(5) We paid an average rate of 1.83% against the rest of the
market average of 1.30%. CACI's CSDB, Stock, June 2022 to May 2023
, latest data available. CACI is an independent company that
provides financial benchmarking data of the retail cash savings
market.
(6) Presswatch Financial H1 2023
Key information from the Society's Group Interim Results to 30
June 2023 is attached.
For the Society's Interim Financial Report, follow the link:
http://www.rns-pdf.londonstockexchange.com/rns/4776H_1-2023-7-27.pdf
GROUP RESULTS FOR THE SIX MONTHSED 30 JUNE
2023
Condensed Consolidated Income Statement
Six months Six months Year to
to 30 June to 30 June
2023 (Unaudited) 2022 (Unaudited) 31 December
2022
(Audited)
GBPm GBPm GBPm
Interest receivable and similar income 552.8 271.0 675.9
Interest payable and similar charges (379.4) (98.3) (316.3)
------------------- ------------------- --------------
Net interest receivable 173.4 172.7 359.6
Fees and commissions receivable 2.7 2.9 6.1
Fees and commissions payable (0.4) (0.3) (0.7)
Fair value gains from financial instruments 21.3 42.0 14.7
Other operating income / (expense) 0.2 (3.0) (3.0)
------------------- ------------------- --------------
Total income 197.2 214.3 376.7
Administrative expenses (75.3) (59.5) (130.1)
Depreciation and amortisation (4.4) (4.9) (10.9)
Impairment charge on loans and advances
to customers (1.3) (3.4) (11.9)
Impairment of property, plant and equipment - - (3.8)
Provisions release - - 0.5
------------------- ------------------- --------------
Operating profit and profit before tax 116.2 146.5 220.5
Tax expense (27.0) (33.9) (58.6)
Profit for the period 89.2 112.6 161.9
=================== =================== ==============
Condensed Consolidated Statement of Financial
Position
30 June 30 June 31 December
2022
2023 (Unaudited) 2022 (Unaudited) (Audited)
GBPm GBPm GBPm
Assets
Liquid assets 5,372.5 4,002.9 4,580.7
Derivative financial instruments 933.9 453.8 679.9
Loans and advances to customers 20,846.9 19,676.4 20,493.2
Fair value adjustment for hedged risk on
loans and advances to customers (707.4) (413.4) (585.9)
Other assets, prepayments and accrued income 312.1 242.9 248.3
Current tax assets - - 4.6
Deferred tax assets 0.3 1.5 0.3
Intangible assets 24.6 23.5 22.5
Property, plant and equipment 65.7 72.2 66.7
Retirement benefit surplus 2.9 6.7 3.6
Total assets 26,851.5 24,066.5 25,513.9
=================== =================== ============
Liabilities
Shares 19,121.5 16,398.7 17,520.4
Fair value adjustment for hedged risk on
shares (131.5) (93.2) (100.7)
Derivative financial instruments 334.5 231.0 251.9
Amounts owed to credit institutions 2,083.6 2,310.9 2,268.4
Amounts owed to other customers 186.0 328.6 229.7
Debt securities in issue 2,404.0 2,584.8 2,711.0
Other liabilities and accruals 690.8 383.8 586.1
Deferred tax liabilities 42.1 1.4 33.0
Provision for liabilities and charges 0.5 1.4 0.6
Subordinated liabilities 303.7 322.7 309.1
Subscribed capital 191.9 211.6 197.6
Total equity attributable to members 1,624.4 1,384.8 1,506.8
Total liabilities and equity 26,851.5 24,066.5 25,513.9
=================== =================== ============
Condensed Consolidated Statement of Comprehensive
Income
Six months Six months Year to
to 30 June to 30 June
2023 (Unaudited) 2022 (Unaudited) 31 December
2022
(Audited)
GBPm GBPm GBPm
Fair value gains recorded in cash flow
hedge reserve 41.9 - 112.9
Fair value losses on investment securities (3.8) (4.3) (9.1)
Actuarial loss on retirement benefit surplus (0.8) (1.7) (4.9)
Revaluation loss on properties revalued - - (1.9)
Tax on items taken directly to equity (8.9) 3.6 (26.7)
------------------- ------------------- --------------
Other comprehensive income net of tax 28.4 (2.4) 70.3
Profit for the period 89.2 112.6 161.9
Total comprehensive income for the period 117.6 110.2 232.2
=================== =================== ==============
Summary Condensed Consolidated Statement
of Cash Flows
Six months Six months Year to
to 30 June to 30 June
2023 (Unaudited) 2022 (Unaudited) 31 December
2022
(Audited)
GBPm GBPm GBPm
Net cash flows from operating activities 1,088.7 292.9 739.1
Net cash flows from investing activities (966.9) (289.8) (443.3)
Net cash flows from financing activities (292.0) 60.0 200.5
------------------- ------------------- --------------
(170.2) 63.1 496.3
Cash and cash equivalents at the beginning
of the period 3,194.0 2,697.7 2,697.7
Cash and cash equivalents at the end of
the period 3,023.8 2,760.8 3,194.0
------------------- ------------------- --------------
Key Performance Indicators
Six months Six months Year to
to 30 June to 30 June
2023 (Unaudited) 2022 (Unaudited) 31 December
2022
(Audited)
Net interest margin 1.34% 1.50% 1.50%
Profit after tax as a proportion of mean
assets 0.69% 0.97% 0.67%
Management expenses as a proportion of
mean assets 0.61% 0.56% 0.59%
Notes to Editors
For more information, please contact the press office at
pressoffice@leedsbuildingsociety.co.uk or call 07721 622548.
Leeds Building Society operates throughout the UK and had assets
of GBP26.9bn at 30 June 2023 ( GBP24.1bn at 30 June 2022) . The
UK's fifth-largest Building Society has its head office in the
centre of Leeds, where it was founded in 1875.
The Society won the title of Best Shared Ownership Mortgage
Lender in the 2023 What Mortgage Awards, its eighth consecutive
year of success in this category. It also received a Gold Ribbon
from Fairer Finance for savings accounts for the fifth year
running, based on customer happiness and trust, along with the
ability to explain things clearly.
Leeds Building Society is authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct
Authority (FCA) and the Prudential Regulation Authority. Leeds
Building Society is registered on the Financial Services Register
under number 164992.You can check this on the FCA website at
https://register.fca.org.uk/s/ or by calling 0800 111 6768.
Leeds Building Society head office: 26 Sovereign Street, Leeds,
West Yorkshire, LS1 4BJ.
As at 30 June 2023, the Board Directors of Leeds Building
Society were as follows:
-- Annette Marie Barnes
-- Farah Buckley
-- Andrew Peter Conroy
-- Iain Charles Andrew Cornish
-- Richard Guy Fearon
-- David Fisher
-- Neil Anthony Fuller
-- Andrew John Greenwood
-- Gareth John Hoskin
-- Robert James Howse
-- Pam Rowland
-- Anita Tadayon
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IR NKOBQABKDQOB
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