B&B shows its strength with pounds 165m profits
Wednesday 28 February 1996
Bradford & Bingley, Britain's fifth largest building society, gave the first clue yesterday of how much its planned pounds 50m loyalty bonus to members is likely to cut into earnings, as it announced annual pre-tax profits of pounds 165.6m.
The announcement is the first among societies offering mortgage rate cuts and savings increases to members as part of their defence of mutuality.
Last week, Nationwide Building Society said it was handing back pounds 200m of future earnings to members by cutting mortgage rates to 6.99 per cent.
The decision put rivals - including Halifax, Alliance & Leicester and Woolwich, all of which are planning to float on the stockmarket next year - on the defensive.
But it also means that societies intending to remain mutual, such as Bradford & Bingley, may be forced to go back to the drawing board and give away a further slice of their profits in order to remain competitive.
Last year, Bradford & Bingley's after-tax profits rose by more than 10 per cent to pounds 111.8m - compared with pounds 101.3m in the previous year. Pre- tax profits were up pounds 6m compared to 1994
Geoff Lister, chief executive at Bradford & Bingley, said that the performance underlined the society's financial and strategic strength. Despite difficulties in the housing market, the society increased the amount of its residential mortgage advances by 21 per cent to pounds 1.8bn.
His comments came as another society, Skipton, announced yesterday that its own 1995 pre-tax profits rose by 56 per cent to pounds 27m. Skipton said it has succeeded in cutting the percentage of its borrowers in arrears of 12 months or more to 0.17 of all mortgages, compared to an industry average of 0.81 per cent.
The society, which pioneered free unemployment insurance for borrowers, also added a further 30,000 savers, a 9 per cent increase on 1994.
John Goodfellow, chief executive at Skipton, said his society's results came despite a decision to write off all its mortgage incentives and discounts as already incurred, rather than amortise them over the period of the loan.
Skipton is also preparing its own loyalty bonuses to members. Mr Goodfellow said: "If we were to follow the example of Nationwide we would be handing back profits of pounds 10m in a full year."
- 1 Woman accidentally shoots herself in the head while posing for a selfie
- 2 Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
- 4 Female Muay Thai champion hustles coaches to give them a beating
- 5 16-year-old girl beaten and burned alive by lynch mob in Rio Bravo, Guatemala
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
The day that Britain resigned as a global power
Almost a third of school pupils believe 'Muslims are taking over our country', study claims
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
Gay marriage 'Bert and Ernie' cake bakery found guilty of discrimination in Northern Ireland
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...