New boss at Scottish Building Society as mortgage book continues to grow

Raymond Abbott

Mr Denton will succeed Mark Thomson in the top job at the society, subject to regulatory approval.

His appointment was announced to members at The Royal College of Physicians in Edinburgh as the firm revealed that it had grown the size of its mortgage book for a fifth year in a row.

The building society, which has which has 33,000 members, confirmed a fifth consecutive year of mortgage book growth and pre-tax profits “ahead of plan” according to the financial statement for the year ended 31 January 2019.

It reported an increase in mortgage balances of £8.9 million over the year, an increase of 2.8 per cent, which compares favourably with the 2.3 per cent growth achieved in the previous financial year. 

Profit for the year before tax amounted to £1.03 million (2018: £1.30 million) which the building society said reflected its commitment to investing in the Society’s digital future as well as ensuring its financial strength and stability.

The society launched its Online Saver account in July 2018, which represented the first step in its journey towards adding a digital offering as an alternative to other distribution channels.

Chairman Raymond Abbott said: “Profit before tax of £1.0 million for the past year is slightly ahead of our plan. The Board’s aim is to maintain a level of profit that allows the Society to meet its loyalty promises through offering the best rates that it can while providing the capacity to make a meaningful investment for the future.

“Remaining relevant to current and future members is of paramount importance to your Board and we look forward to delivering more online capability while maintaining our traditional passbooks.”

Outgoing chief executive, Mark Thomson said: “I am pleased to report another successful year for the world’s oldest remaining building society, not just in terms of its financial performance, but also in its quest to provide long-term value and satisfaction to its members. 

“Continuing to treat all mortgage applicants as individuals is key to our member strategy and we have successfully opened the door to home ownership for a number of individuals who would otherwise have difficulty obtaining the mortgage finance they required. This approach is particularly important for those potential mortgage borrowers who may not fit the automated decision-making systems of most of the larger lenders, where the applicant’s individual circumstances are rarely considered. 

“Over recent years, the Society’s approach to mortgage assessment has been particularly important when lending to older people. It is clear from the popularity of our Retirement Interest Only Mortgage (which was added to our product range in July 2018) that the Society has been able to accommodate the later-life borrowing requirements of what has traditionally been an underserved section of the market. 

“As well as continuing to grow our mortgage book in a balanced and controlled manner, it is pleasing to note that the excellent credit quality of this portfolio was maintained, evidenced by the fact that no properties were repossessed by the Society over the course of the past financial year.”

Mr Thomson will remain in post until his successor is announced this summer.

Chairman Raymond Abbott made the announcement as he reported the latest financial results for the society, which revealed a 2.8 per cent or £8.9 million rise in mortgage balances to £327.3m.

The growth of the mortgage book was higher than the year before, when it expanded by 2.3 per cent.

The society reported pre-tax profits of £1.03m for the period, down from £1.3m the year before but “ahead of plan”.

Mortgages and other products will also be marketed more assertively online over the next year to year and a half.

Mr Abbott said: “We are not tied to increasing profits year on year; we are tied to making a good service for our members. We try and manage our profit to a number which allows us to pay as much as we can on savings interest … and charge a reasonably competitive rate on the mortgages. It is getting the fine balance between our mortgage book and our savings book and a profit which allows us to keep our financial strength, so we can do these things.”