Chief Executive, Ian Ward, said:
"Leeds Building Society has achieved another excellent set of financial results for the first half of the year and provided more capacity and choice to the UK mortgage market.
"New lending increased by 61% to £642m, which represents £275m above our market share. Almost a quarter of new loans, over £151m of completions, has enabled thousands of first-time-buyers to purchase their first home and this represents an 85% increase when compared to the same period last year.
"The average loan-to-value on new lending was only 52% as we continue to adopt a prudent approach to underwriting. We intend to increase new lending further this year, to around £1.3bn, which will support many more FTBs onto the housing ladder and enable other borrowers to move their mortgage to us.
"Savings balances, which are a vital component of our traditional, mutual building society business, rose by £127m to a record £7.15bn. This half year performance was £95m above our natural building society net retail market share, with savers attracted by the security and value we provide. Furthermore, this success means that all of the Society's residential mortgage lending is funded entirely by retail investments.
"We attach great importance to our superior efficiency highlighted by excellent cost ratios. Our cost income ratio improved to just 31%, from 35%, as a result of the increase in our total income. The cost asset ratio increased slightly to 47p per £100 of assets. These are very favourable compared to the average of the major building societies, which were 67% and 89p respectively, at the end of 2010.
"Our successful, sustainable business model has delivered a 49% increase in pre-tax profit, to £26.9m, compared to the same period last year. This strong profitability means that the security of our members' savings was strengthened even further as our capital and reserves increased by £38m, to a record to £553m. These capital and reserves are significantly ahead of regulatory requirements.
"As expected, in view of the current pressures in the economy, there are some of our residential borrowers experiencing difficulties in meeting their mortgage repayments and we continue to work with them through this difficult period. Despite this, our residential arrears have reduced to 2.29%.
"The charge for impairment losses and provisions for commercial and residential property reduced slightly to £23.2m in the first half of 2011 with total balance sheet mortgage provisions increasing to £79m at 30 June 2011 from £65m at 31 December 2010.
"In June, the Society re-entered the Sterling covered bond market, which we successfully reopened last year, and raised £250m of 7-year funding, satisfying our long term wholesale funding requirements for 2011 and beyond. In line with most other major UK financial institutions, the Society made use of the Bank of England's Special Liquidity Scheme facility at the height of the market dislocation in 2008. We have now repaid all of our SLS drawings well ahead of schedule.
"This, combined with our above market share retail savings performance, has reduced our requirement for wholesale funding with the ratio falling to 18.5%. Furthermore, we have also been able to improve the maturity profile of this funding, with 58% of the total having a maturity date in excess of one year.
