LBS.L Regulatory News (LBS)

26 Feb 2007 11:48

Leeds Building Society26 February 2007 UK's 'Best Building Society' announces record results for 2006 Leeds Building Society, which won the title of 'Best Building Society' inMortgage Magazine's 2006 awards, today announced record results for 2006. 2006 Highlights €15% rise in assets to a new record level of £8.1bn •Pre-tax profits up by 14% to a record £57.2m •Mortgage lending increase of 17% to highest ever level of £2bn •Savings balances rise by an all time high of £734m to £5.3bn •Cost income ratio improved even further to 41% from 44%, one of the best in the industry •Increase in reserves to a record £407m. •Asset quality remains high with arrears ratio over 50% better than CML average Chief Executive, Ian Ward, said: "We are delighted with our record breakingresults in 2006. Our business is growing strongly with assets now over £8bn,more than treble the level of a decade ago and a 15% increase on 2005. Profitshave also increased substantially during recent years with the 2006 figure beinga record £57.2m, up 14% on 2005. This means we now have a thirteen year unbrokentrend in year-on-year profit growth. "One of the key achievements of the year was the successful completion of ourmerger with Mercantile Building Society on 1st August. The Mercantile had beenbased in the north-east of England for over 100 years and as part of the mergerwe now have a further 13 well-established branches in this area of the UK. "The former Head Office of Mercantile in Wallsend, has been developed as anadministration centre for the combined Society. This has provided much neededadditional capacity for our rapidly expanding business. "We attach great importance to our superior efficiency, as demonstrated by ourvery favourable cost ratios. This is essential in maintaining our keen productpricing in the competitive market in which we operate. Our cost income ratioimproved to 41% from 44% a year ago. At that time, independent analysis fromKPMG showed that this was the best performance of any building society and the2006 result is superior to those of the societies that have, so far, announced. "We achieved a significant uplift in both mortgages and savings during 2006 withour products featuring regularly in newspaper 'best buy' tables. We advanced arecord £2bn of new mortgage loans, which was 17% above the previous best everperformance in 2005. Leeds Building Society is the only UK building society tolend in Euros and in 2006 we successfully extended our lending to all of Spainand Ireland. Pleasingly, redemptions of existing mortgages were below theindustry average and this helped to contribute to very strong net lending of£695m, a 28% increase on the previous year. "Our success has been achieved by selling mortgages through a variety ofdifferent channels combined with diversification of our product range andlending criteria. "Savings balances rose by more than £730m to an all time high of £5.3bn. Our netreceipts performance was £150m better than our building society market share. "The Society won the title of 'Best Building Society' in Mortgage Magazine's2006 awards, which take into account long term value, customer service and howeasy products are to understand. We were also awarded 'Gold' in the LendingExcellence Awards from Lending Strategy Magazine, in relation to an independentnational consumer survey of 7,800 customers who have recently taken out amortgage. "I believe these results clearly demonstrate that a mutual building society cancompete very effectively in a highly competitive market. After growing ourassets to £5.3bn in 2003, we have achieved a milestone figure in each successiveyear with £6.1bn in 2004, £7.1bn in 2005 and now £8.1bn and I firmly believethat we have all the essentials in place to ensure that Leeds Building Societycontinues this dynamic growth." ENDSNote to EditorsA copy of the Society's results for 2006 is attached. The Society's press office would be happy to arrange interviews with theSociety's Chief Executive, Ian Ward or Deputy Chief Executive & FinanceDirector, David Pickersgill. For further information please contact:Karen Wint (Head of Marketing & PR)0113 225 7731 or 07989 386772 (out of office hours)kwint@leedsbuildingsociety.co.uk Gary Brook (PR Manager)0113 225 7606 or 07866 455111 (out of office hours)gbrook@leedsbuildingsociety.co.uk For further comment on the results please contact: Ian Ward (Chief Executive) - 0113 225 7501 (direct line)David Pickersgill (Deputy Chief Executive & Finance Director) - 0113 225 7502(direct line) GROUP RESULTS FOR THE YEAR ENDED 31DECEMBER 2006 Summary Consolidated IncomeStatement Audited Audited Year to Year to 31 December 31 December 2006 2005 --------------- ------------------ £M £M Interest receivable and similar 407.8 355.1incomeInterest payable and similar charges (322.0) (282.4) -------- ----------Net interest receivable 85.8 72.7Other income and charges 21.5 19.6Fair value gain less losses fromderivative financial instruments (1.0) (0.4) -------- ----------Total income 106.3 91.9Administrative expenses (44.0) (40.6)Impairment losses on loans andadvances (2.5) (0.7)to customersProvisions for liabilities and (2.6) (0.4)charges -------- ----------Profit before tax 57.2 50.2Tax expense (17.4) (15.1) -------- ----------Profit for the year 39.8 35.1 ======== ========== Summary Consolidated Balance Sheet 31 December 31 December 2006 2005 --------------- ------------------ £M £MAssetsLiquid assets 1,708.1 1,503.4Derivative financial instruments 43.9 15.7Loans and advances to customers 6,328.0 5,509.0Other investments 0.1 0.0Property, plant and equipment 33.3 24.0Deferred income tax assets 7.6 9.1Prepayments, accrued income and otherassets 3.3 3.5 -------- ----------Total assets 8,124.3 7,064.7 ======== ========== LiabilitiesShares 5,269.5 4,535.5Derivative financial instruments 47.9 49.2Deposits and securities 2,277.3 2,007.8Current income tax liabilities 6.9 7.0Deferred income tax liabilities 4.6 3.8Provision for liabilities, accrualsand 40.8 33.4deferred incomeRetirement benefit obligations 5.6 11.6Subordinated liabilities 39.4 40.6Subscribed capital 25.0 25.0Revaluation reserve 18.2 13.5General reserve 377.7 334.5Other reserves 11.4 2.8 -------- ----------Total reserves and liabilities 8,124.3 7,064.7 ======== ========== Statement of RecognisedIncome and Expense Audited Audited 31 December 31 December 2006 2005 --------------- ------------------ £M £M Change in accounting policyon adoption of IAS 39 0.0 11.8Property revaluation 6.7 0.0Valuation losses onrevaluation of availablefor (0.7) (0.2)sale investments(Losses)/gains on cash flowhedges (7.4) 1.1Actuarial gain/(loss) onretirement benefitobligations 4.8 (6.4)Tax on items taken directlyto equity (1.0) 1.6 -------- ----------Net income recogniseddirectly in equity 2.4 7.9 Reserves acquired ontransfer of engagements 14.3 0.0Transfer from revaluationreserve on disposal 0.0 0.1 Profit for the period 39.8 35.1 -------- ----------Total recognised income andexpense for the period 56.5 43.1 ======== ========== Summary Consolidated CashFlow 31 December 31 December 2006 2005 --------------- ------------------ £M £M Net cash flows fromoperating activities 185.9 269.9Net cash flows frominvesting activities (455.6) (81.9)Net cash flows fromfinancing activities 0.0 40.0 -------- ---------- (269.7) 228.0 -------- ---------- Cash and cash equivalentsat 570.9 342.9the beginning of the year -------- ----------Cash and cash equivalentsat 301.2 570.9the end of the year -------- ---------- Summary of key ratiosGross capital as apercentage of shares andborrowings 6.3% 6.3%Liquid assets as apercentage of shares andborrowings 22.6% 23.0%Profit for the financialyear as a percentage ofmean 0.52% 0.53%total assetsManagement expenses as apercentage of mean totalassets 0.58% 0.62% Notes to the FinancialInformation 1. The financial information set out above, which was approved by theBoard of directors on 26 February 2007, does not constitute accountswithin the meaning of the Building Societies Act 1986. This information is provided by RNS The company news service from the London Stock Exchange