Pointing to Monday's pounds 800m purchase of Clerical Medical, the life insurance mutual, as a key pointer to Halifax's strategic development, Jon Foulds, chairman, said: "The ageing population, the diminishing welfare state, the disillusionment with housing and the switch from physical to financial assets mean that savings is above all where our future lies."
He said Halifax, which is to convert to a bank next year, will concentrate on using its franchise in the mortgage market to build up personal savings. "This will be the fastest growing side of the business". At present, like all building societies, mortgage-related business accounts for around 95 per cent of Halifax's earnings.
The 1995 results were earned against a housing market characterised by weak demand and intense competition among lenders. Although Halifax maintained its position as Britain's largest lender with 19 per cent of net new business, this appeared to be slightly below its usual share.
Mr Foulds said there is increasing evidence of steady improvement in the housing market. The Halifax house price index has risen for seven successive months, and is expected to continue in March.
Mike Blackburn, chief executive, said: "We are seeing the first year- on-year positive numbers and the reports from the estate agents are significantly improved. It is too soon to be throwing our caps in the air, but the signs are encouraging."
Mr Foulds was sceptical about the usefulness of further interest rate cuts for the housing market. "Mortgages are already at historically such low levels that I don't think another fall in base rates will help much. At best it would have a marginal effect."
Halifax, which merged with Leeds Building Society in August last year, said its members will vote on conversion in early 1997, probably February. If approved, flotation will be by the summer.
Mr Foulds said this lengthy process ensured that as many qualifying members as possible would have been with the society for over two years to benefit most from the free shares distribution. There would be some 9 million shareholders.
Halifax said it was taking a pounds 113m charge for costs associated with the Leeds merger.