Skipton releases solid half year results

John Goodfellow, chief executive and director said: " In an increasingly competitive mortgage market we have seen record levels of applications, whilst further

operating efficiencies have enabled a reduction in the Society's interest rate margin. The performance of the Group overall has also been

outstanding, with its subsidiaries again producing exceptional results. The performance of Connells, the estate agency operation, is particularly worthy of note. All of this enforces the ethos of Skipton as a modern mutual."

Skipton said that in the last six months, the Society has concentrated on implementing a

number of significant changes to its organisational structure and operating systems, creating the infrastructure necessary to offer the highest

standards of customer service. The first major change came into effect on 1 March 2002 when a number of Supervisory Boards were created to facilitate

the operation of the Society and its subsidiaries, and to strengthen

management succession plans. In addition, on 1 July 2002 the Society's

branches ceased to be tied agents for Norwich Union and instead, independent

financial advisers from the Society's IFA subsidiary, Skipton Financial Services Limited, are now available in each branch. The primary result of

this is increased choice for the customer.

Innovation continues to be a cornerstone of Skipton's product range, and as before, successes have been quickly copied by other providers. This has

again been the case with the Stateside Mortgage, which links interest payments to the US$ Libor, resulting in one of the lowest rates in the

market. A very popular mortgage with financially astute borrowers, similar

products have now started appearing in other lenders' portfolios.

John Goodfellow, Chief Executive and Director commented, "In a sector where

margins are becoming increasingly tight, and the difference between

providers' rates increasingly small, customer service is at the heart of any

successful business. Skipton's track record shows we are constantly

striving to give the fairest balance between the needs of our new and

existing borrowers, and the needs of our investors, and the changes we have

implemented in the first half of this year enable us to build on this for

the future.

"In addition, we believe it is necessary to diversify from the traditional

core areas of investments and mortgages in order to prosper. In 1994 we

predicted that margins would be squeezed and decided to launch an

acquisition programme with the aim of investing in subsidiary companies

which could give higher returns on capital. With the support of the

resulting 15 subsidiaries, the Society is uniquely placed to adapt to any

changes in the economic cycle. In the future Skipton will continue to go

from strength to strength."