TIDM70NN
RNS Number : 6548M
Skipton Building Society
01 August 2017
Tuesday 1 August 2017
INTERIM RESULTS: SKIPTON REPORTS STRONG RESULTS FOR THE FIRST
HALF OF THE YEAR
Skipton Building Society today publishes its interim results
covering the six month period from 1 January to 30 June 2017.
The UK's fourth largest building society announces a strong
performance for the first half of 2017, increasing its membership
with a 25,907 increase in customers to 886,310, recording a Group
profit before tax of GBP67.0m, a 19% increase in underlying Group
profit before tax to GBP87.4m, and increasing its Common Equity
Tier 1 ratio to 28.9%.
The Society's already strong capital position was further
strengthened following the disposal of a GBP220m portfolio of
non-performing or recently non-performing loans. This initiative to
reduce risk resulted in a GBP15.0m loss on disposal.
Savings balances increased by GBP0.5bn (a growth rate of 3.7%
during the six month period) and mortgage balances increased by
GBP0.7bn (a growth rate of 4.4% during the six month period). Gross
mortgage lending was GBP2.4bn, a 20.7% increase compared to the
comparable period to 30 June 2016.
The Society broadened its wholesale funding base and lengthened
its maturity, by returning to the senior unsecured market for the
first time in a decade, raising GBP350m for a five year term.
The Society was the first, and to date only, financial services
provider to launch a Cash Lifetime ISA, helping 17,711 people in
the first month of its launch in June to save for their first home
or longer term financial needs.
In the six months to 30 June 2017 Skipton's key performance
highlights included:
Robust performance
- Total Group profit before tax (PBT) was GBP67.0m (six months
ended 30 June 2016: GBP76.8m);
- Underlying Group PBT[1] was GBP87.4m (six months ended 30 June
2016: GBP73.2m);
- The Society continued to grow its membership with a 25,907
increase in customers to 886,310 (six months ended 30 June 2016 an
increase of 20,839);
- Group gross mortgage lending increased to GBP2.4bn (six months
ended 30 June 2016: GBP1.9bn);
- Mortgage balances grew by GBP0.7bn, a growth rate of 4.4%
since the end of 2016 (six months ended 30 June 2016: by GBP0.5bn,
a growth rate of 3.8%) despite the disposal of a GBP220m mortgage
portfolio during the period, as mentioned above;
- Savings balances grew by GBP0.5bn to GBP14.6bn, a growth rate
of 3.7% since the end of 2016 (six months ended 30 June 2016: by
GBP1.1bn, a growth rate of 8.7%);
- The Group net interest margin reduced to 1.11% (six months
ended 30 June 2016: 1.18%; year ended 31 December 2016: 1.18%
(restated)), a reflection of a more competitive mortgage market and
the ongoing low Bank Base Rate environment;
- Group administrative expenses totalled GBP253.9m (six months
ended 30 June 2016: GBP243.0m), of which GBP169.1m relates to the
Connells estate agency group (six months ended 30 June 2016:
GBP162.7m);
- Loan loss provisions continued to reduce, resulting in a net
credit of GBP4.2m (six months ended 30 June 2016: GBP1.3m);
- Group total assets increased by 5.8% since the year end to
GBP20.1bn (31 December 2016: GBP19.0bn);
- The Society's Common Equity Tier 1 (CET 1) ratio([2]) at 30
June 2017 was strong at 28.9% (31 December 2016: 23.9%). At 30 June
2016 the Society reported its capital ratios under the standardised
basis, and its CET 1 ratio at that date was 17.0%;
- The leverage ratio2, calculated on an IRB basis, stood at 5.9%
(31 December 2016: 5.9%), comfortably ahead of the regulator's
expected minimum;
- During the period, the Society repaid and cancelled GBP50.0m
of its Permanent Interest Bearing Shares (PIBS) and GBP65.4m of its
subordinated debt on their respective call dates;
- Liquidity as a percentage of shares, deposits and borrowings
was 17.4% (31 December 2016: 15.9%); and
- In April 2017, global ratings agency Moody's upgraded the
Society's long term rating to Baa1 (stable outlook) from Baa2
(positive outlook) and affirmed its short term rating of P-2. This
reflects the continued improvement of the Society's financial
position.
David Cutter, Skipton's Group Chief Executive, said:
"Skipton has delivered another strong performance during the
first six months of 2017, further strengthening its CET 1 capital
ratio to 28.9%, growing savings balances by GBP0.5bn, mortgage
balances by GBP0.7bn, and underlying profit before tax by 19.4% to
GBP87.4m. Customer numbers increased by 25,907, and for the third
year in a row the Society was included in the Sunday Times Top 100
Companies to Work For.
The robustness of the business was recognised by the global
credit rating agency Moody's, who upgraded the Society for the
third time in four years."
Enabling our members to achieve home ownership and save for
their life ahead aspirations
- The Society was the first, and to date only, financial
services provider to launch a Cash Lifetime ISA, helping 17,711
people in the first month of its launch in June to save for their
first home or longer term financial needs;
- The Society helped 13,118 homeowners during the six month
period to purchase or remortgage their properties, including 2,374
first time buyers - 809 of those through our participation in the
Government's Help to Buy equity loan scheme;
- We paid an average savings rate of 1.23%, nearly five times
the Bank Base Rate, during the six months ended 30 June 2017 (six
months ended 30 June 2016: 1.60%). For the four months ended 30
April 2017 the Society paid an average of 1.24% which was 0.51%
above the industry average for which comparable data is
available[3];
- The attractiveness of our mortgage and savings products was
endorsed by 69 independent media best-buy table mentions during the
period, as well as numerous editorial mentions; and
- The Society achieved a net customer satisfaction score of
92%[4] (six months ended 30 June 2016: 92%; year ended 31 December
2016: 90%).
Mortgages and Savings division
- The division produced a PBT of GBP41.5m, compared to GBP45.7m
for the six months ended 30 June 2016;
- The division reported an underlying PBT of GBP58.8m (six
months ended 30 June 2016: GBP49.5m);
- The division's administrative costs increased to GBP68.8m from
GBP66.1m in the same period in 2016 as the Society continues to
invest in various areas of the business to meet customers'
expectations and support growth;
- The cost income ratio of the Mortgages and Savings division
was 55.3% (six months ended 30 June 2016: 57.6%), whilst the
management expense ratio of the division was 0.72% (six months
ended 30 June 2016: 0.74%)([5]) ;
- The Society remains primarily funded by retail savings,
representing 87.3% of total funding (31 December 2016: 89.6%);
- In June, the Society raised GBP350m of unsecured wholesale
funding for a five year term, broadening the Society's funding base
and lengthening its funding maturity;
- The division also accepts deposits through its Guernsey based
subsidiary, Skipton International Limited (SIL). Offshore deposits
increased by 15.9% to GBP1.4bn from GBP1.2bn at 31 December
2016;
- SIL increased PBT by GBP1.4m (19.7%) to GBP8.5m from GBP7.1m
for the six months ended 30 June 2016;
- The Group's prudent approach to lending is demonstrated by the
number of Group residential mortgages in arrears by three months or
more. These represent only 0.37% of mortgage accounts (31 December
2016: 0.73%), the reduction benefitting from the GBP220m portfolio
disposal of non-performing or recently non-performing loans, and
compares to an industry average of 0.91%([6]) ;
- The Society's three months or more arrears levels fell from
0.38% at 31 December 2016 to 0.35% at 30 June 2017. The quality of
the SIL mortgage book remains excellent with only two cases in
arrears by three months or more (31 December 2016: nil);
- The percentage of cases in Amber Homeloans and North Yorkshire
Mortgages in arrears by three months or more at 30 June 2017 were
1.43% and 0.08% respectively (31 December 2016: 5.95% and 4.31%), a
significant reduction predominantly due to the aforementioned
portfolio disposal. Both books are closed to new business and have
been in run-off since 2008;
- The average indexed loan-to-value of residential mortgages
across the division at 30 June 2017 was 48.5% (31 December 2016:
47.9%); and
- The Society drew down GBP500m of funding under the
Government's Term Funding Scheme (TFS) during the period (six
months ended 30 June 2016: GBPnil; year ended 31 December 2016:
GBP300m) and at the end of the period had drawn a total of GBP800m
(31 December 2016: GBP300m). In addition the Society had GBP400m of
the Government's Funding for Lending Scheme (FLS) outstanding at 30
June 2017 (31 December 2016: GBP980m).
Robust performance from estate agency in a challenging
market
- Connells, our estate agency division, reported PBT of
GBP31.5m, compared to GBP31.3m for the six months ended 30 June
2016;
- EBITDA[7] for the period was GBP38.1m compared to GBP38.7m for
the six months ended 30 June 2016;
- The Connells group retains a good spread of revenue generating
activities and, despite a fall in the number of house sales of 3%
during the period, total income across the division increased by
4.0% compared to the first half of 2016, to GBP204.8m. Lettings
income (up 14.5%), mortgage services revenue (up 11.8%) and
surveying income (up 4.5%) all increased during the period; and
- Administrative expenses increased by 3.9% during the period
(six months ended 30 June 2016: 19.0% increase).
Other subsidiaries
- Skipton Business Finance recorded a PBT of GBP1.6m (six months
ended 30 June 2016: GBP1.5m);
- Jade Software Corporation (JSC), the provider of the Society's
core database and software development language, recorded a PBT of
GBP0.2m (six months ended 30 June 2016: a loss of GBP0.5m); and
- On 30 June 2017, the Society increased its shareholding in JSC
from 56.4% to 99.9%. In addition, the Group disposed of a small
group of companies held by JSC, Jade Logistics Holding Company and
its subsidiary undertakings, resulting in a loss on disposal of
GBP4.9m. The disposal of this subsidiary allows JSC to focus on
further strengthening its core solutions business.
Giving something back to our communities
- In January this year, the Society selected the Alzheimer's
Society and Alzheimer's Scotland as their charity partner for 2017
and 2018. As part of this partnership Skipton colleagues are going
through training to become "dementia friends", helping them to
better understand those living with dementia; and
- In May, Skipton's award winning Grassroots Giving community
funding scheme was launched for the year, having first started in
2013, and will give GBP500 each to 164 small community groups
across the UK voted for by the public.
Delivering through our people
- A key factor in the Society's strong performance seen during
the period and the ongoing high satisfaction of our customers is
our people. The Society is focused on ensuring its people are
highly engaged and motivated to deliver a great experience for our
customers both now and in the future;
- In June this year, the Society achieved an employee engagement
score of 88%([8]) (2016: 90%), well above financial services
industry norms; and
- For the third year in a row the Society was included in the
Sunday Times Top 100 Companies to Work For.
David Cutter, Skipton's Group Chief Executive, added:
"These are yet another set of strong results for Skipton, and we
have seen continued strong growth in our mortgage and savings
balances whilst continuing to build our capital base.
The more challenging economic environment coincides with a
period of increased political uncertainty, as not only is the
Government in the early stages of negotiating the UK's withdrawal
from the European Union, but an unexpected General Election
resulted in a hung Parliament. These conditions make forecasting
difficult and create a need for caution. We remain vigilant
regarding potential economic headwinds, but the capital and funding
actions taken during the period mean we are well placed to manage
the risks that we face and to capitalise upon any opportunities
that may arise for the benefit of our members."
S
For further information, or to arrange interviews, please
contact the Skipton Press Office on 03456 017247,
email newsline@skipton.co.uk or visit the press section of our
website at www.skipton.co.uk.
Stacey Stothard, Senior Corporate Communications Manager
If outside Press Office hours (9am - 5pm, Monday to Friday),
please call 07793 699 878.
Skipton Building Society
Results for the half year ended 30 June 2017
Condensed Consolidated Income Statement
Unaudited Unaudited Unaudited 12 months to 31.12.16
6 months to 30.06.17 6 months to 30.06.16 Restated*
GBPm GBPm GBPm
--------------------------------- ---------------------- ---------------------- --------------------------------
Interest receivable and similar
income 194.9 219.9 430.2
Interest payable and similar
charges (87.1) (112.7) (214.6)
---------------------------------- ---------------------- ---------------------- --------------------------------
Net interest receivable 107.8 107.2 215.6
Fees and commissions receivable 230.6 219.8 452.9
Fees and commissions payable (4.3) (4.8) (9.6)
Fair value gains / (losses) on
financial instruments 1.6 (4.7) (3.7)
Profit on treasury assets 2.7 0.3 1.4
Loss on disposal of mortgage (15.0) - -
assets
(Loss) / profit on disposal of
subsidiary undertakings (3.9) 9.4 15.8
Profit on disposal of joint 0.9 - -
ventures
Loss on disposal of associate - (0.9) (0.9)
Profit on part disposal of equity
share investments - - 17.0
Dividend income from equity share
investments 0.6 0.7 0.7
Share of profits from joint
ventures 1.0 1.1 1.8
Share of losses from associate - (2.4) (2.4)
Other income 2.3 1.0 2.4
---------------------------------- ---------------------- ---------------------- --------------------------------
Total income 324.3 326.7 691.0
Administrative expenses (253.9) (243.0) (499.1)
---------------------------------- ---------------------- ---------------------- --------------------------------
Operating profit before
impairment losses and provisions 70.4 83.7 191.9
Impairment credit on loans and
advances to customers 4.2 1.3 0.3
Impairment losses on associate - (1.1) (1.1)
Impairment losses on equity share
investments (0.1) - (11.3)
Provisions for liabilities (7.5) (7.1) (10.9)
---------------------------------- ---------------------- ---------------------- --------------------------------
Profit before tax 67.0 76.8 168.9
Tax expense (16.5) (17.5) (39.1)
---------------------------------- ---------------------- ---------------------- --------------------------------
Profit for the period 50.5 59.3 129.8
---------------------------------- ---------------------- ---------------------- --------------------------------
Profit for the period
attributable to:
Members of Skipton Building
Society 50.5 59.6 130.1
Non-controlling interests - (0.3) (0.3)
---------------------------------- ---------------------- ---------------------- --------------------------------
50.5 59.3 129.8
--------------------------------- ---------------------- ---------------------- --------------------------------
* The comparative figures have been restated due to a change in
accounting policy relating to the netting of gains on and costs
arising from the sale of treasury assets. The gain or loss on
disposal of treasury assets was previously presented separately (in
'Profit on treasury assets') to the associated cost of unwinding
the hedging instrument in relation to these assets on disposal,
which was recognised through 'Interest receivable and similar
income'. The gain or loss on disposal and the cost of unwinding the
hedging instrument on disposal are now presented on a net basis in
the Income Statement and so the prior period has been restated
accordingly, resulting in a GBP3.2m increase in 'Interest
receivable and similar income' and a GBP3.2m reduction in 'Profit
on treasury assets'. The restatement has not resulted in any change
to profit before tax. There were no disposals of hedged treasury
investments that included a cost of unwinding the associated
hedging instrument for the six months ended 30 June 2016 and so no
comparatives for this period have been restated.
Skipton Building Society
Results for the half year ended 30 June 2017
Underlying Group PBT for the six months ended 30 June 2017 was
GBP87.4m (six months ended 30 June 2016: GBP73.2m; year ended 31
December 2016: GBP151.5m) as follows:
Unaudited Unaudited Unaudited
6 months to 30.06.17 6 months to 30.06.16 12 months to 31.12.16
GBPm GBPm GBPm
--------------------------------------------- ---------------------- ---------------------- -----------------------
Total Group profit before tax 67.0 76.8 168.9
Add back loss / less profit on disposal of
subsidiary undertakings* 3.9 (9.4) (15.8)
Less profit / add back loss on full or part
disposal of other Group undertakings (0.9) 0.9 (16.1)
Add back loss on disposal of mortgage assets 15.0 - -
Add back impairment of associate and equity
share investments 0.1 1.1 12.4
Add back FSCS levy 2.3 3.8 2.1
--------------------------------------------- ---------------------- ---------------------- -----------------------
Underlying Group profit before tax 87.4 73.2 151.5
--------------------------------------------- ---------------------- ---------------------- -----------------------
* The loss on disposal of subsidiary undertakings in the period
includes a GBP4.9m loss on disposal of Jade Logistics Holding
Company, and GBP1.0m profit in respect of the sale of Homeloan
Management Limited (HML) which occurred in 2014. The sale of HML
included contingent consideration dependent on HML's performance
over a period following the disposal and this will result in
amounts being receivable by the Group between 2018 and 2022. The
profit recognised in the period relates to the unwinding of the
discounted cash flows of the contingent consideration receivable
(GBP0.3m) and the release of a provision held in relation to the
disposal which was no longer required (GBP0.7m).
Skipton Building Society
Results for the half year ended 30 June 2017
Condensed Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months to 30.06.17 6 months to 30.06.16 12 months to 31.12.16
GBPm GBPm GBPm
--------------------------------------------- ---------------------- ---------------------- -----------------------
Profit for the period 50.5 59.3 129.8
--------------------------------------------- ---------------------- ---------------------- -----------------------
Other comprehensive income:
Items that will not be reclassified to
profit or loss:
Remeasurement gains / (losses) on defined
benefit obligations 5.9 (29.4) (50.0)
Movement in reserves attributable to
non-controlling interests - 0.6 0.9
Income tax on items that will not be
reclassified to profit or loss (1.3) 6.7 10.2
--------------------------------------------- ---------------------- ---------------------- -----------------------
4.6 (22.1) (38.9)
Items that may be reclassified subsequently
to profit or loss:
Available-for-sale investments: valuation
gains taken to equity 6.6 4.5 6.5
Available-for-sale investments: realised
gains transferred to Income Statement (2.8) (0.4) (6.2)
Cash flow hedges: (losses) / gains taken to
equity (1.0) 7.2 8.9
Cash flow hedges: realised gains
transferred to Income Statement - (0.4) (0.2)
Cash flow hedges: gains reclassified to (1.7) - -
Income Statement
Exchange differences on translation of
foreign operations - 1.2 1.7
Translation loss transferred to Income
Statement on deemed disposal of associate - 0.5 0.5
Income tax on items that may be
reclassified to profit or loss (0.6) (2.4) (2.2)
--------------------------------------------- ---------------------- ---------------------- -----------------------
0.5 10.2 9.0
--------------------------------------------- ---------------------- ---------------------- -----------------------
Other comprehensive expense for the period,
net of tax 5.1 (11.9) (29.9)
--------------------------------------------- ---------------------- ---------------------- -----------------------
Total comprehensive income for the period 55.6 47.4 99.9
--------------------------------------------- ---------------------- ---------------------- -----------------------
Total comprehensive income attributable to:
Members of Skipton Building Society 55.6 47.1 99.3
Non-controlling interests - 0.3 0.6
--------------------------------------------- ---------------------- ---------------------- -----------------------
55.6 47.4 99.9
--------------------------------------------- ---------------------- ---------------------- -----------------------
Skipton Building Society
Results for the half year ended 30 June 2017
Condensed Consolidated Statement of Financial Position
Unaudited Unaudited Audited
as at as at as at
30.06.17 30.06.16 31.12.16
GBPm GBPm GBPm
----------------------------------------------------- ---------- ---------- ----------
Assets
Cash in hand and balances with the Bank of England 1,856.6 1,588.8 1,212.7
Loans and advances to credit institutions 397.4 419.5 409.6
Debt securities 870.0 1,224.2 1,055.1
Derivative financial instruments 101.5 139.9 116.1
Loans and advances to customers 16,380.6 15,054.0 15,781.6
Deferred tax asset 30.3 26.2 30.4
Investments in joint ventures 11.8 11.7 12.5
Equity share investments 41.2 56.7 36.4
Property, plant and equipment 79.6 73.9 77.8
Investment property 14.5 15.5 15.0
Intangible assets 162.9 163.4 164.8
Other assets 115.7 121.1 107.7
------------------------------------------------------ ---------- ---------- ----------
Total assets 20,062.1 18,894.9 19,019.7
------------------------------------------------------ ---------- ---------- ----------
Liabilities
Shares 14,655.3 14,006.0 14,152.5
Amounts owed to credit institutions 895.1 705.3 655.3
Amounts owed to other customers 1,713.4 1,371.8 1,493.2
Debt securities in issue 733.2 647.1 534.2
Derivative financial instruments 330.2 456.5 412.3
Current tax liability 15.6 15.8 19.7
Other liabilities 160.9 128.5 106.2
Accruals and deferred income 45.8 36.5 52.6
Provisions for liabilities 26.1 28.8 23.3
Deferred tax liability 13.8 12.7 12.2
Retirement benefit obligations 104.7 90.7 110.9
Subordinated liabilities - 77.0 77.2
Subscribed capital 41.6 93.2 92.6
------------------------------------------------------ ---------- ---------- ----------
Total liabilities 18,735.7 17,669.9 17,742.2
Members' interests
General reserve 1,285.0 1,183.2 1,236.6
Available-for-sale reserve 34.4 35.1 32.0
Cash flow hedging reserve 1.4 1.9 3.3
Translation reserve 5.6 6.1 6.6
------------------------------------------------------ ---------- ---------- ----------
Attributable to members of Skipton Building Society 1,326.4 1,226.3 1,278.5
Non-controlling interests - (1.3) (1.0)
------------------------------------------------------ ---------- ---------- ----------
Total members' interests 1,326.4 1,225.0 1,277.5
------------------------------------------------------ ---------- ---------- ----------
Total members' interests and liabilities 20,062.1 18,894.9 19,019.7
------------------------------------------------------ ---------- ---------- ----------
Skipton Building Society
Results for the half year ended 30 June 2017
Condensed Consolidated Statement of Cash Flows
Unaudited Unaudited Unaudited
6 months to 30.06.17 6 months to 30.06.16 12 months to 31.12.16
Restated*
GBPm GBPm GBPm
------------------------------------------ ---------------------- ---------------------- -----------------------
Cash flows from operating activities
Profit before tax 67.0 76.8 168.9
Adjustments for:
Impairment credit on loans and advances
to customers (4.2) (1.3) (0.3)
Loans and advances written off, net of
recoveries (1.1) (1.3) (4.7)
Depreciation and amortisation 10.2 9.9 20.6
Impairment losses on associate - 1.1 1.1
Impairment losses on equity share
investments 0.1 - 11.3
Dividend income from equity share
investments (0.6) (0.7) (0.7)
Interest on subscribed capital and
subordinated liabilities 4.5 5.7 11.4
Profit on sale of property, plant and
equipment, investment property and
intangible assets (1.5) - (0.1)
Profit on treasury assets (2.7) (0.3) (1.4)
Loss on disposal of mortgage assets 15.0 - -
Share of (profits) / losses from joint
ventures and associates (1.0) 1.3 0.6
(Profit) / loss on disposal of associates
and joint ventures (0.9) 0.9 0.9
Profit on part disposal of equity share
investments - - (17.0)
Loss / (profit) on disposal of subsidiary
undertakings 3.9 (9.4) (15.8)
Net (losses) / gains from changes in fair
value of cash flow hedges (1.0) 7.2 8.9
Remeasurement gains / (losses) on defined
benefit obligations 5.9 (29.4) (50.0)
Other non-cash movements (4.2) 1.8 7.8
------------------------------------------- ---------------------- ---------------------- -----------------------
89.4 62.3 141.5
Changes in operating assets and
liabilities:
Movement in prepayments and accrued
income (0.6) (8.3) (4.2)
Movement in accruals and deferred income (32.5) (20.2) 7.4
Movement in provisions for liabilities 3.5 2.3 (3.4)
Movement in fair value of derivatives (67.5) 114.8 94.4
Movement in fair value adjustments for
hedged risk 63.5 (85.1) (79.9)
Fair value movements in debt securities 9.6 (17.9) (9.6)
Movement in loans and advances to
customers (893.2) (543.2) (1,298.4)
Disposal of mortgage assets 197.3 - -
Movement in shares 551.5 1,131.4 1,284.6
Income Statement charge for fair value of
management incentive scheme liability 2.5 3.3 1.0
Net movement in amounts owed to credit
institutions and other customers 457.1 (49.9) 25.5
Net movement in debt securities in issue 202.5 38.1 (74.5)
Net movement in loans and advances to
credit institutions 21.8 (67.8) (94.9)
Net movement in other assets (12.5) (11.1) 1.4
Net movement in other liabilities 54.6 18.5 24.3
Income taxes paid (20.8) (18.1) (37.0)
------------------------------------------- ---------------------- ---------------------- -----------------------
Net cash flows from operating activities 626.2 549.1 (21.8)
------------------------------------------- ---------------------- ---------------------- -----------------------
* The comparative figures have been restated due to a change in
accounting policy relating to the netting of gains on and costs
arising from the sale of treasury assets.
Skipton Building Society
Results for the half year ended 30 June 2017
Condensed Consolidated Statement of Cash Flows - continued
Unaudited Unaudited Unaudited 12 months to 31.12.16
6 months to 30.06.17 6 months to 30.06.16 Restated*
GBPm GBPm GBPm
--------------------------------- ---------------------- ---------------------- --------------------------------
Net cash flows from operating
activities 626.2 549.1 (21.8)
---------------------------------- ---------------------- ---------------------- --------------------------------
Cash flows from investing
activities
Purchase of debt securities (403.4) (599.5) (1,130.2)
Proceeds from disposal of debt
securities 581.8 497.9 1,190.0
Purchase of property, plant and
equipment and investment
property (10.0) (11.6) (22.6)
Purchase of intangible assets (3.2) (1.8) (5.7)
Proceeds from disposal of
property, plant and equipment,
investment property and
intangible
assets 3.4 0.4 1.3
Dividends received from equity
share investments 0.6 0.7 0.7
Exercise of share options in
management incentive scheme (6.5) (10.0) (10.0)
Proceeds from disposal of equity
share investments - - 18.2
Proceeds from disposal of joint 1.0 - -
ventures
Dividends received from joint
ventures 1.6 2.2 2.1
Purchase of subsidiary
undertakings, net of cash
acquired - (4.3) (6.6)
Purchase of non-controlling (6.6) - -
interest
Cash paid on disposal of (1.5) - -
subsidiary
Investment in joint ventures and
equity share investments - (0.4) (0.4)
Investment in associate - (2.5) (2.5)
Purchase of other business units,
net of cash acquired - (7.4) (7.1)
---------------------------------- ---------------------- ---------------------- --------------------------------
Net cash flows from investing
activities 157.2 (136.3) 27.2
---------------------------------- ---------------------- ---------------------- --------------------------------
Cash flows from financing
activities
Redemption of subordinated (10.0) - -
liabilities
Repurchase of subordinated (65.4) - -
liabilities
Repurchase of subscribed capital (50.0) - -
Interest paid on subordinated
liabilities (1.2) (1.5) (3.0)
Interest paid on subscribed
capital (3.3) (4.2) (8.4)
---------------------------------- ---------------------- ---------------------- --------------------------------
Net cash flows from financing
activities (129.9) (5.7) (11.4)
---------------------------------- ---------------------- ---------------------- --------------------------------
Net increase / (decrease) in cash
and cash equivalents 653.5 407.1 (6.0)
Cash and cash equivalents at 1
January 1,285.6 1,291.6 1,291.6
---------------------------------- ---------------------- ---------------------- --------------------------------
Cash and cash equivalents at end
of period 1,939.1 1,698.7 1,285.6
---------------------------------- ---------------------- ---------------------- --------------------------------
* The comparative figures have been restated due to a change in
accounting policy relating to the netting of gains on and costs
arising from the sale of treasury assets.
Analysis of cash balances as shown within the Statement of
Financial Position:
Unaudited 6 months to Unaudited 6 months to Audited 12 months to
30.06.17 30.06.16 31.12.16
GBPm GBPm GBPm
---------------------------- --------------------------- --------------------------- ---------------------------
Cash in hand and balances
with the Bank of England 1,856.6 1,588.8 1,212.7
Mandatory reserve deposit
with the Bank of England (25.1) (23.7) (25.4)
----------------------------- --------------------------- --------------------------- ---------------------------
1,831.5 1,565.1 1,187.3
Loans and advances to credit
institutions 107.6 133.6 98.3
----------------------------- --------------------------- --------------------------- ---------------------------
Cash and cash equivalents at
end of period 1,939.1 1,698.7 1,285.6
----------------------------- --------------------------- --------------------------- ---------------------------
Skipton Building Society, Principal Office, The Bailey, Skipton,
BD23 1DN
Skipton Building Society is authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct
Authority and Prudential Regulation Authority. Skipton Building
Society is a member of the Building Societies Association and
Financial Ombudsman Service.
[1] Underlying Group PBT excludes items within the statutory
profit figure that are not generated from the Group's core
strategic operations to give greater transparency of the
performance of the Group's ongoing trading activities. The
underlying Group PBT excludes Financial Services Compensation
Scheme charges, gains and losses on disposal of Group undertakings
and impairment of Group undertakings. In 2017 it also excludes the
loss on sale of the portfolio of non-performing or recently
non-performing loans which occurred during the period, as the sale
of mortgage assets is not considered to be an ongoing trading
activity of the Group. See page 7 of this document for a full
reconciliation of statutory Group PBT to underlying Group PBT.
[2] The CET 1 and leverage ratios are calculated on the PRA
regulated prudential group basis. The prudential group is the full
Group excluding Connells, Jade Software Corporation, Northwest
Investments NZ Limited and Skipton Trustees Limited. These ratios
are reported under CRD IV (which is a set of EU legislative
requirements covering prudential rules for banks, building
societies and investment firms) on a 'fully loaded' basis. The
fully loaded position represents the CRD IV end-point definition
applicable from 1 January 2022. The 2017 CET 1 and leverage ratios
are based upon the Internal Ratings Based (IRB) approach.
[3] Source: CACI Savings Market Database, latest available
comparable market data for the four months ended 30 April 2017.
[4] As measured from an independent survey by a customer
experience management services provider of 1,200 Society members.
The net customer satisfaction score is calculated by subtracting
dissatisfied customers (those scoring satisfaction with the Society
as 1-3 on a scale of 1-7) from those who are satisfied (those
scoring satisfaction as 5-7 on the same scale).
[5] Administrative expenses as a percentage of mean total
assets. Mean total assets is the average of the total assets as at
30 June 2017 and 31 December 2016 as shown within the Statement of
Financial Position. Both the cost income and management expense
ratios, including the comparative figures, assume that the Group's
financial advice activities previously carried out by Skipton
Financial Services Limited, which were integrated into the Society
on 1 August 2016, have always been part of the Mortgages and
Savings division.
[6] Source: Council of Mortgage Lenders, industry arrears data
(mortgages in arrears by more than three months) at 31 March
2017.
[7] EBITDA is calculated as profit before tax, interest and
other finance income, depreciation, amortisation and income from
joint ventures. It also excludes a number of other items including
profits and losses on disposal of group undertakings, profits on
disposal of fixed assets, dividends to non-controlling interests
and one-off legal costs.
[8] As measured by Willis Towers Watson, an independent company
who provides benchmarking on employee surveys in both the UK and
globally.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SDWFMFFWSEDW
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