Newcastle Building Society posts increased profits following strong mortgage lending and customer growth

26 July 2019

Key highlights

Operating profit before impairment and provisions increased by 18% to £8.5m (2018: £7.2m);
Profit before tax was up 18% to £8.2m (2018: £6.9m);
Gross lending up 65% to £380m (2018: 229m);
Net core residential lending for the first half of year was £220m, which exceeded the 2018 full year equivalent by £60m (Full year 2018: £160m);
We grew our customer base by over 25,000 during the first six months of 2019;
Three new branches announced to address the reduction in face to face financial services in rural locations;
Half way point reached in multi-million pound branch investment programme;
Customer satisfaction at 96%;
Mortgage arrears remain at low levels at 0.36% (2018: 0.36%);
Capital ratios remain robust with Common Equity Tier 1 Ratio at 15.1%; and
Liquidity as a percentage of shares, deposits and liabilities (excluding encumbered assets) was 15.5%.

Note: financial results quoted are for the half-year to 30 June 2019 (and equivalent period in 2018)

Newcastle Building Society has announced its 2019 financial results to 30 June, reporting an H1 performance that includes increased profits, record mortgage lending, thousands of new customers and achieved growth in headcount of 41 so far this year.

The Society’s profit before tax was up 18% to £8.2m for the six months ended 30 June 2019, compared to £6.9m for the first half of 2018. Operating profit before impairment and provisions increased to £8.5m from £7.2m.

Helping people own their own home is core to its purpose and for the first six months of 2019, it has reported record gross mortgage lending of £380m, an increase of 65% on the first half of 2018. Net core residential lending of £220m was £60m higher than that delivered across the whole of 2018.

Its mortgage arrears remain at low levels at 0.36% demonstrating the quality of the Society’s mortgage lending.

The Society grew its customer base by over 25,000. Customers deposited record levels of savings attracted by competitive high street savings rates, a multi-million pound branch investment programme and exceptional customer service.

Since its launch in the second half of 2018, the Society’s successful cash Lifetime ISA account has helped around 30,000 people who are either first time buyers and saving for a home, or people saving towards their retirement. So far, customers have received £16.5m in Government bonuses to help them on their way.

Newcastle Building Society chief executive, Andrew Haigh summarised:

“We can see clear evidence that our strategy is delivering meaningful progress.

“At a time when many banks are withdrawing from high streets, we still passionately believe in the role that branches and face to face advice plays in supporting local communities. That’s why we have been re-imagining our branch formats, investing heavily in them to ensure they continue to meet the needs of local people, and in the process growing our customer base.

“The Society continues to make excellent progress in the face of very strong competition in the mortgage and savings market. Investing in branches and local High Streets, delivering an outstanding customer experience and enabling our colleagues to realise their potential remain at the heart of our strategy and will continue to ensure we make a positive contribution to our members and the communities in which we operate.”