INTEREST rates have peaked, forecast Bournemouth-based Portman Building Society as it unveiled another set of record results.

"We think they will remain at 4.75 per cent for most of 2005 - the next move will be down rather than up," said chief executive Robert Sharpe.

Portman is "fairly confident" that it will overtake rival the Yorkshire to become Britain's third biggest building society in a matter of weeks.

Portman - currently fourth - on Tuesday reported a 10 per cent growth in total assets to £15.5 billion.

Yorkshire's assets current stand at £14.4 billion for the year to December 2003. Yorkshire is due to report on February 15.

Yorkshire corporate affairs manager David Holmes said: "Whether we are second, third, fourth or fifth makes no odds to us. What is important is the quality of business that we write."

If Portman became number three, it would then seek to overtake second-placed Britannia which reported assets of £20.9 billion for 2003.

But number one is a very long way off - Nationwide with assets of £101.4 billion (as at April 2004).

Portman's growth has been assisted by its merger with the Staffordshire at the end of 2003.

Further mergers remain a possibility: "Clearly the periscope is up and we are having a look around but we would not be aggressive in an approach," said Mr Sharpe.

Portman has 1.5 million members served by around 150 branches, predominantly in the South.

It employs 2,000 people - 800 of them at its Richmond Hill head office and 200 at local branches.

Also reporting yesterday was sixth-placed Skipton Building Society - assets up 10.8 per cent to £8.1 billion.

All of this will not be lost on Portman, Yorkshire and Skipton staff - the three societies have branches within close proximity of each other in Old Christchurch Road, Bournemouth.

RESULTS

Portman Building Society

Total assets - £15.5 billion, up 10 per cent;

Pre-tax profit - £78.1 million, up 16 per cent;

Record mortgage lending - £3.6 billion, up 24 per cent.

Skipton Building Society

Group assets - £8.1 billion, up 10.8 per cent;

Pre-tax profit - £79.7 million, up 37.9 per cent.

First published: February 2