Scarborough Announces Record Results

Press release published on 25 June 2007 by Scarborough Building Society

The Scarborough Building Society Group today announced an outstanding set of annual results.

Highlights of the year included:-

• Group pre-tax profit up 20% to £6.8 million
• Group total assets up 33%, to a record £2.3 billion
• Society management expenses ratio down again, to 0.52%
• Group mortgage balances up 4% to £1.4 billion
• Members’ savings balances up 8% to £1.3 billion
• Total assets under management up 41% to £4.3 billion

Outlining Scarborough’s performance for the 2006/07 financial year, today, Chief Executive John Carrier explained that behind these results, key achievements were:-

• Further diversifying the business by acquiring a new offshore retail deposit-taking subsidiary, Scarborough Channel Islands Limited (SCIL).
• Launching a new non-conforming lending arm, Scarborough Specialist Mortgages (SSM), enabling the Group to cater for the full market spectrum of customers.
• Producing innovative, long term good value products to meet changing social needs, including a dedicated Christmas Saver account giving people a regulated alternative to hamper clubs following the Farepak collapse.
• Obtaining a first investment grade credit rating for the Group from Moody’s of A3.
• Securing primary and special servicer ratings of 2- and 3+ from independent ratings agency Fitch for our mortgage administration subsidiary Scarborough Mortgage Services (SMS).
• Accelerating the growth of the Group by taking on major new mortgage administration clients for SMS and completing transactions totalling £2.3 billion through mortgage trading subsidiary North Yorkshire Mortgages (NYM).
• Creating a refreshed Corporate Social Responsibility (CSR) policy which outlines our commitment to members and the communities in which they live, giving 1% of pre tax profit to good causes.
• Replacing our Legacy mainframe system with new Microsoft SQL Servers, giving the Group access to the Microsoft .Net environment, to improve the efficiency and future scalability of our systems.
• Launching a flagship new branch in Scarborough and planning to relocate to a new state-of-the-art branch in Leeds.

John said, ‘This has been a year of unprecedented growth and development for the Scarborough Building Society Group, thanks to a clear business strategy based on our integrated model of complementary businesses.

‘We have achieved a successful balance between the focus needed to deliver on our plan, and the ability to seize opportunities which enhance our Group business, whilst responding to changing consumer and social trends by bringing new and innovative products to market.

‘All of this activity has enabled us to fulfil our core purpose of creating profitability to invest in and sustain our business in order to return value to our members through rewarding savings products and value-for-money mortgages.’

As for the future, John added that Scarborough has ambitious plans to ensure the positive trend continues throughout the year ahead.

‘Rising interest rates will create some uncertainty for the housing market and competition will continue to reduce operating margins,’ he said.

‘However, these challenges bring opportunities for the Scarborough Group, and we look forward to taking advantage of them in the year ahead.’

Scarborough Building Society Group

Financial Results For The Year Ended 30 April 2007 Summary

 

	2007	2006
	£m	£m
INCOME STATEMENT
Net Interest Receivable	16.1	16.2
Other Income and Charges	6.6	5.0
	22.7	21.2
Administrative Expenses	(15.6)	(15.6)
Provisions	(0.3)	-
	____	____
Profit before Taxation	6.8	5.6
Taxation	(2.0)	(1.7)
	____	___
Profit for the Financial Year	4.8	3.9
BALANCE SHEET
Liquid Assets	845	358
Mortgages	1,401	1,346
Fixed and Other Assets	52	29
Total Assets	2,298	1,733
Shares and Borrowings	2,115	1,609
Other Liabilities	28	22
Subordinated Liabilities	35	35
Subscribed Capital	65	15
Reserves	55	52
Total Liabilities	2,298	1,733

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