Customers flock to the Saffron
SAFFRON Building Society has announced a strong set of annual results for 2008 having gained thousands of new customers. The Saffron Walden-based society, which celebrates its 160 anniversary this year, acquired 1,415 new mortgage customers and opened 15,670 new savings accounts during 2008.
SAFFRON Building Society has announced a strong set of annual results for 2008 having gained thousands of new customers.
The Saffron Walden-based society, which celebrates its 160 anniversary this year, acquired 1,415 new mortgage customers and opened 15,670 new savings accounts during 2008.
It ended the year with 8,153 mortgage customers, an increase of 415 on 2007 gains, and 107,975 savings accounts, an increase of 5,392 on the previous year.
Saffron's savings balance grew by more than �41million to a record level of �684m and its assets also increased by �69m to stand at �853m. Operating profit was �3.6m, up �200,000 on the previous year.
Andy Golding, chief executive at Saffron Building Society, said: “We are quietly optimistic about the future, despite the UK recession.
“We delivered a good set of 2008 results and the start of this year has been really strong with new accounts and member figures far exceeding those of previous years. This demonstrates the level of engagement and trust that consumers feel for the simpler building society business model.
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He added: “It is clearly harder for mortgage and savings providers to make profits in a very low interest rate environment, but with our commitment to other sources of income, such as our IFA and insurance businesses, we expect to deliver a healthy set of results again in 2009.
“We will celebrate our 160th birthday in 2009, and will mark that with a series of events and products that I am sure our members will enjoy, such as our new Goal Based Savings system. We are also poised to launch some very attractive new mortgage deals to put some more much needed funding into the housing market.”
Saffron also pledged to work hard with existing mortgage borrowers who find themselves in difficulty. At the end of 2008 the percentage of its total mortgage balances in arrears had reduced to 0.28% from 0.62% at the end of 2007 which, said Mr Golding, reflects the fair and quality approach they have been taking in this area.
Saffron opted to take the �1.1m three-year cost for bailing out failed banks in one lump sum and has increased its mortgage provisions by �1.4m to anticipate a rise in the number of borrowers defaulting on their repayments. This demonstrates a further measure of prudence and a desire to ensure that future profitability remains strong, the society said.
Pre-tax profits after the increased mortgage provisions and the Financial Services Compensation Scheme levy were �1.1m and annual profits are expected to increase in 2009.
“Saffron Building Society has had a strong year but members and staff are extremely disappointed by the level of the FSCS levy,” said Mr Golding.
“As a mutual building society with a cautious approach to risk and a mortgage book that is fully funded by retail savings balances, it seems somewhat unfair that we have to contribute what seems a disproportionate amount to the failure of organisations with much riskier business models.”