Record result for 173-year-old Scottish Building Society despite 'extreme conditions'

The Scottish Building Society has unveiled record increases in mortgage lending and savings during a year in which it opted not to tap into Covid support schemes.

The Edinburgh-headquartered society, which was founded in 1848, said profit before tax increased by 34 per cent to £840,000, despite “extreme conditions” as a result of the pandemic.

Its results for the year to the end of January show a record £74 million increase in mortgage lending and record £58m growth in savings balances.

Active members increased by 9 per cent, while new mortgage lending doubled and saving balances rose 18 per cent.

Scottish Building Society chief executive Paul Denton at the offices in Edinburgh. Picture: Malcolm Cochrane Photography

Chief executive Paul Denton said the society stayed open for customers throughout lockdown and did not use any government support schemes, such as furlough and rates relief.

He said: “One of the strongest pillars of a trusted brand is its history and heritage. Throughout our 173 years, we have supported members through wars, recessions and now a generation-defining pandemic.

“As a society, we have adapted quickly whilst staying true to our purpose: to help members ‘build for the future’.

“It did not seem right to take government aid at a time when other areas of the economy were in far greater need. That remains our position going forward.”

He added: “It is not all about growth – during the pandemic staff worked tirelessly to support members impacted financially by Covid-19.”

The society allowed more than 500 members to defer mortgage payments by up to six months, and the vast majority are now said to be back on a stable footing.

Denton, who was appointed in July 2019, said the rise in membership, mortgage lending and savings balances put “Scotland’s building society on a strong footing to build for the future”.

He said: “The reduction in the Bank of England bank rate created pressure on our margins. However, due to strong mortgage growth and tight control of costs, our operating profit for the year increased by 120 per cent to £971,000.

“With an uncertain economic outlook, we prudently increased our impairment provisions, however, despite these our profit before tax for the year increased by 34 per cent.

“I am particularly proud of the fact that the growth in profits is a direct result of increased mortgage lending and that our savings members still benefit from market leading rates, particularly on our Loyalty ISA.”

The society is opening a new Aberdeen branch but will also focus on “digital innovation” to attract new members. In January, it recorded a major milestone, with the launch of a digital savings and mortgage service – SBS Online.

Chairman Raymond Abbott said: “These results demonstrate what the society is capable of, even during extreme conditions, and our plans for the years ahead aim to build on this excellent foundation.”

Denton added: “While the world has changed since we first opened in 1848, the one thing that has stayed constant are our core values. We are not the biggest player in the market, but you can always trust us to do the right thing.”

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