TIDM10AI
RNS Number : 6052H
Principality Building Society
05 August 2021
Principality Building Society Interim Results Announcement for
the six months to 30 June 2021
Principality has posted good interim results as it continued to
invest in its technology, people and communities.
The building society has helped more than 1,500
first-time-buyers get a home during the first six months, helped
many members cope with the financial uncertainty created by the
COVID-19 pandemic, and supported communities by keeping its
branches open throughout the winter lockdown period.
Julie-Ann Haines, CEO at Principality Building Society, said: "
As a mutual, member-owned building society, our aim has never been
to maximise profit but to focus on the long-term future of the
Society. We have made a decision to be much more purpose driven so
we can not only achieve our objective to help people get and stay
in their homes for longer but also have a positive impact on
improving the prosperity and resilience of customers, colleagues,
clients and communities.
"T he economic environment looks to be more optimistic than the
previous 18 months, although the impact of the coronavirus pandemic
will shape both the wider environment and our Society for years to
come. Principality remains a safe home for savings, our capital and
liquidity levels remain strong, well in excess of regulatory
requirements and will able to withstand any challenging economic
and market conditions.
"Our focus remains on helping members to get a home and stay in
a home for longer, to become a much more purpose-led and
sustainable business, and to honour our commitment to developing
and growing our business in a safe and secure way. We recognise
that expectations of us are changing, so we will continue to adapt,
invest and improve so that we remain relevant for the long term and
ready to face future challenges.
"I am very proud of how our colleagues continued to provide
award-winning service and the efforts of our branch network to stay
open during the winter lockdown. It has been a very difficult
period for the High Street but we remain committed to our branch
and agency network, serving 70 communities across Wales and the
Borders.
"Whilst our members continue to value and visit our network then
we will continue to support communities as we have done through
lockdowns. This focus on our high street does not deflect us from
our focus on developing technology to respond to the demand from
members and customers to interact over the phone, over video and
digitally to enable them to manage their financial affairs."
A resilient financial performance with an improving economic
backdrop
KEY PERFORMANCE INDICATORS
-- Total assets of GBP10.9bn (31 December 2020: GBP11.1bn)
-- Retail mortgage balances of GBP8,200.4m (31 December 2020: GBP8,175.7m)
-- Savings balances have remained consistent at GBP8.2bn (31 December 2020: GBP8.2bn)
-- Net retail mortgage lending for the first six months of the
year of GBP24.7m (30 June 2020: GBP118.7m)
-- Statutory profit before tax of GBP33.1m (30 June 2020: loss of GBP6.4m)
-- Underlying profit before tax of GBP28.6m (30 June 2020: loss of GBP3.5m)
-- Strong capital with a Common Equity Tier 1 ratio of 30.70% (30 June 2020: 24.48%)
-- Customer Service Net Promoter Score of 80.8% (30 June 2020: 81.2%)
-- Net interest margin of 1.14% (30 June 2020: 0.99%)
Net retail mortgage lending was GBP24.7m in the first six months
of this year (June 2020: GBP118.7m). Although retail lending is
relatively flat, mortgage applications remain strong in a housing
market being supported by stamp duty reliefs. We expect net retail
mortgage lending to remain relatively flat throughout 2021 as we
embed our new mortgage platform and manage application volumes in
the short term.
Balancing the needs of savers whilst remaining competitive in
the mortgage market is a constant focus and the savings rates
offered to members were directly impacted by the interest earned on
mortgages. Principality still delivered an average rate to savers
of 0.77% compared to the market average of 0.32%[1] over the same
period, maintaining its position as one of the best on the high
street.
In 2020 Principality increased its provisions for potential
future loan losses because of the great economic uncertainty caused
by the pandemic. Over the last six months the economic outlook has
improved and is much more promising for 2021 and beyond. The
housing market is buoyant and employment is stable, although the
impact of the tapering off of furlough scheme has yet to
materialise, which has reduced the overall level of
provisioning.
This reduction in provisions for losses on mortgages is largely
responsible for a strong profit in the first six months of 2021, in
the same way that increased provisions during the earlier stages of
the pandemic last year resulted in lower levels of profitability in
2020. This has had a significant impact on results for this interim
period, with an underlying profit before tax of GBP28.6m (six
months to 30 June 2020: loss of GBP3.5m) and statutory profit
before tax of GBP33.1m (six months to 30 June 2020: loss of
GBP6.4m).
The full interim report can be viewed via the following link:
https://www.principality.co.uk/about-us/your-principality/financial-reports
Notes to Editors
About Principality Building Society
-- Formed in 1860, Principality is Wales's largest building society.
-- The Society is committed to supporting the communities of
Wales, with 53 branches and 17 agencies in Wales and the
borders.
-- Principality is the 6th largest building society in the UK.
-- The Society has assets of GBP10.9bn.
-- Principality is committed to remaining a mutual organisation.
-- www.principality.co.uk
For more information, please contact:
Jamie Pike
Corporate Affairs Manager
Jamie.Pike@principality.co.uk
029 2077 3812
[1] Source: CACI data
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