Interim Results Press Release

6 August 2014

Record number of members benefits from strong performance

of Leeds Building Society

Leeds Building Society has helped more savers and borrowers than ever before as it reports strong interim results.

The UK's fifth largest building society provided its savers with competitive returns well above the market average, despite the current low interest rate environment, and is continuing to invest in the sustainable growth of the business.

Competitive and innovative mortgages helped the Society to complete a record number of home loans and the business successfully managed the introduction of tighter controls on mortgage lending under the Mortgage Market Review (MMR).

2014 half-year highlights:

· 39,000 new members, taking total membership to a record 722,000 (35,000 in the first half of 2013, total 701,000 at June 2013)

· Paid an average of 2.27% across our savings range, compared to the market average of 1.51%¹

· Savings balances grew in the first half of 2014 by £476m (£521m to June 2013) to £9.1bn, the highest level in our history

· New residential mortgage lending increased by 29% to £1.19bn (£920m to June 2013), significantly above our market share²

· Net residential lending of £446m (£424m in 2013), also a new record

· Pre-tax profit increased by 55% in the first half of 2014 to £38.6m (£24.9m to June 2013 restated3), driven by growth and lower provisions

· Total charge for impairment losses reduced to £17.8m (£26.4m to June 2013)

Leeds Building Society Chief Executive Peter Hill said:

Savings and Members

"I'm very pleased to report we have increased our membership, mortgage lending and market share to record levels as we continue to invest in the Society, its people and systems to keep growing in a strong and sustainable way.

"Savings balances have grown to the highest level in our history, which means that all our residential mortgage lending continues to be funded by members' savings.

"We paid an average of 2.27% across our savings range, compared to the market average of 1.51%¹ and all our savings accounts paid at least 0.5%, which is equivalent to today's Bank Base Rate.

"This spring's Member Loyalty Bond - launched exclusively to existing customers with a competitive return of 2.75% gross pa/AER fixed for three years and 50% penalty-free access - was our most popular ever.

Mortgage lending

"New residential mortgage lending increased 29% to £1.19bn (£920m to June 2013), significantly above our market share2 and we made more home loans than ever before.

"In the first half of 2014 we helped more than 3,100 First Time Buyers purchase homes, accounting for 31% of our total lending and were active in higher Loan to Value (LTV) lending, including through the Government's Help to Buy equity scheme.

"Our unique Welcome Mortgage won awards for innovation following its launch in 2013 and it has continued to receive industry accolades so far in 20144.

"The Society's well-established affordability model helped to minimise any impact of the MMR regulatory changes, the biggest shake-up of the mortgage industry in a decade.

Financial performance

"Pre-tax profit rose by 55% in the first half of 2014 to £38.6m (£24.9m to June 2013 restated3). Capital and Reserves rose to a record £691m (£628m 30 June 2013 restated3) and Core Tier 1 Capital remained strong, with a Ratio of 15.3% (14.4% in June 2013), compared to the minimum requirement of 7%.

"Our strong performance meant that total assets increased to £12.1bn (£10.8bn at June 2013 and £11.2bn at December 2013) and our Leverage Ratio remained strong at 5.5% (5.6% June 2013) compared to the minimum requirement of 3%.The Society is therefore well positioned for future growth and remains a secure home for our members' savings.

"Total charge for impairment losses reduced to £17.8m (£26.4m to June 2013) and the Society's residential arrears (1.5% or more of outstanding mortgage balances) fell to 2.12% (2.62% June 2013).

"Credit ratings agencies, Moody's and Fitch, both continued to assign long term 'A' ratings6 to the Society.

Investing in the future

"Significant investment in the Society has continued during the first half of 2014 to ensure we continue to offer our members outstanding personal service and we are proud to have achieved a Net Promoter Score of +455.

"New brand and online improvements followed extensive consultation and our relaunched website was recognised in the Best Lender category of the What Mortgage Awards 2014.

"We now employ more than 1,100 colleagues, the largest number in the Society's history, and further jobs will be created during 2014.

"As we continue to invest, our cost to mean asset ratio has increased to 55p (48p to June 2013) per £100 of assets and our cost to income ratio is 33% (31% to June 2013) but our focus on efficiency means these ratios remain among the best in the building society sector.

"Our continued strong performance in the first half of 2014 follows a record year in 2013 - this, combined with the progress in delivering our investment programme, enables us to look ahead with a high level of confidence for the business, colleagues and our members."

Ends

Notes to Editors

To arrange an interview with Leeds Building Society Chief Executive Peter Hill, please contact the press office on 0113 225 7606.

For further information please contact:

Gary Brook (Head of Corporate Communication)

0113 225 7606 or 07866 455111 (out of office hours)

gbrook@leedsbuildingsociety.co.uk

Leeds Building Society has 67 branches throughout the UK, Gibraltar and Ireland and assets of £12.1bn (as at 30 June 2014). The Society has operated from the centre of Leeds since 1886.

¹ CACI Data, March 2014 - CACI is an independent company that provides Financial Services benchmarking data and covers 85% of the high street cash savings market

² Leeds Building Society defines market share as follows:

Mortgages - Council of Mortgage Lenders market share statistics

Savings - Mutual sector net retail savings as published by the Building Societies Association

3 The Group has adopted IFRIC 21, which changed the date for when the Society's liability to the FSCS scheme is recognised.

4 Leeds Building Society's unique Welcome Mortgage allows borrowers to pay 0% interest for the first few months of their term so they can free up cash to help them settle into their new home. So far this year, this has won the Society three awards for innovation: 'Innovator of the Year' at the Moneywise Magazine Mortgage Awards 2014, 'Mortgage Innovation Award' and 'Most Innovative Personal Finance Provider' at the Moneynet Personal Finance Awards 2014.

5 Leeds Building Society measures its customer loyalty through a Net Promoter Score (NPS), which is based on a single question: 'How likely is it that you'll recommend this product to a friend or colleague?' The net score is calculated by subtracting the percentage of people who wouldn't recommend the Society from the percentage of people who would recommend. The Society measures the NPS score every quarter. Net Promoter, Net Promoter Score and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.

6 Moody's - A3, Fitch - A-