Profits up at The Loughborough Building Society
The Loughborough Building Society has reported a 13 per cent rise in pre-tax profit despite a subdued housing market.
For the year ending 31 October 2011, the lender, which has branches in Leicestershire, Derbyshire and Nottinghamshire, increased profit before tax and financial services compensation scheme levy to £751,000 from £661,000.
Gross mortgage lending also rose by 7 per cent compared with the previous 12 months, with mortgage assets up 1.3 per cent.
Gross capital increased to £19.5m, or 7.8 per cent of shares and borrowings, up from £18.9m, or 7.5 per cent, in 2010.
Chief executive Gary Brebner said: "During the past year the economic climate has not been easy for borrowers or savers and the UK mortgage market has contracted. We have achieved increased gross lending in the year without compromise on quality.
"The amount of interest we received has remained at about 2010 levels, thanks to a rise in mortgage assets and greater customer retention. However, the low interest rates reduce the income received from liquid assets held by the Loughborough."
Total liquid assets declined to £70m, but the level meets the requirements of the Financial Services Authority, the business added. Fees and commissions receivable fell slightly as competitive pressures reduced average mortgage fees.
The Loughborough put aside a further £57,000 to cover any potential losses on mortgages. Arrears cases remain under control and are lower in number than last year, the lender said.
Overall, the society increased retained profits by £500,000 and further strengthened its capital ratio.
