Newcastle Building Society announces half year results
02 August 2023
Newcastle Building Society announces half year results
[Note: financial results quoted are for the half-year to 30 June 2023 (and equivalent period in 2022, unless stated as Full Year)]
Highlights
• Profit before taxation of £16.2m [Half Year 2022: £14.2m]
• Underlying operating profit of £15.0m (Half Year 2022: £14.2m)
• Provided good value for savers by increasing rates on our variable rate savings book on five different occasions during the first half of the year, offering an average savings rate of 2.49% across the first five months of the year which was 0.62% higher than the market average, equating to £11m more interest for our Members over the same period [source: CACI’s CSDB Stock Jan 23 – May 23];
• Grown savings balances by £458m from £4.2bn at December 2022 to £4.7bn at 30 June 2023
• Offered good value for borrowers, with a Standard Variable Rate (SVR) for mortgages at the end of June of 5.19% against a market average of 7.63%, saving our members almost £336k in interest payments for the month alone.
• Gross mortgage lending of £660m (Half Year 2022: £448m)
• Net core residential lending of £408m (Half Year 2022: £181m)
• Maintained the highest levels of customer service, with customer satisfaction scores of 95% (Year end 2022: 95%);
• Continued to offer all Members additional support through Helping Hand, a unique service delivered with Citizens Advice Gateshead helping address a range of problems and access quick advice and support;
• Announced backing for the Mortgage Charter, which introduces extra measures of support for those experiencing mortgage payment difficulties;
• Gained approval for the merger with Manchester Building Society by way of a transfer of Manchester’s engagements to Newcastle with a confirmed completion date of July 1st.
• Donated £179,000 to the Newcastle Building Society Community Fund at the Community Foundation to support ongoing donations to charities across the region. Grants were made from the Fund to 27 charities tackling issues in debt management, employability, food poverty, and the environment;
• Supported our communities with more than 650 days of colleague volunteering, helping a range of good causes;
• Created nearly 150 new jobs, supporting the region through new and high quality employment opportunities;
• Engaged with over 350 members at our listening events across the region, and grew our Connected Communities network to more than 700.
Newcastle Building Society has announced its financial results for the first half of 2023, reporting continued growth through the first half of the year achieved by offering consistently good value for savers and borrowers, providing additional support for customers and communities, and delivering a strong financial performance in volatile market conditions.
The Society responded to multiple increases in bank base rate by continuing to increase the rates on savings products to offer good value. In the five months to end of May 2023, the Society’s average savings book rate of 2.49% was materially higher than the market average of 1.87%, equating to £11m more in interest for its savers over the same period.
In the face of rising interest rates, the Society continued to offer good value to borrowers too, with a Standard Variable Rate (SVR) for mortgages at the end of June of 5.19% against a market average of 7.63%, saving members almost £336k in interest payments for the month alone. This approach helped the Society attract net core residential lending of £408m [Half Year 2022: £181m).
The Society announced Group profit before tax of £16.2m for the period ending 30 June 2023, compared to £14.2m for the same period last year.
Support for all customers impacted by the cost of living crisis was enhanced, including through an ongoing partnership with Citizens Advice Gateshead to deliver the Helping Hand service offering free, independent and rapid access to advice and support on a wide range of topics, as well as emergency financial support.
Newcastle Building Society was amongst the first group of lenders to sign up to the Government’s Mortgage Charter, which provides additional support and reassurance for people concerned about their mortgage repayments.
Andrew Haigh, chief executive at Newcastle Building Society, said: “Persistent inflation and the rising cost of living continues to present ongoing and difficult challenges for our communities, and the first half of the year has been shaped by unpredictable market conditions creating a complex trading environment. Our responsibility to members, communities and wider stakeholders is clear and as rates increase, we have been mindful of the need to find a fair, equitable and consistent approach in balancing increases in variable savings and variable mortgage rates.
“The fact that we have attracted so many new customers to the Society demonstrates the value of that approach, and enables us to do more to support customers and those in our communities.”
Further investment for communities in the region included a donation of £179,000 to the Newcastle Building Society Community Fund at the Community Foundation Tyne & Wear and Northumberland, supporting the ongoing programme of grant making from the Fund which continues to focus on the key themes of food poverty, debt management, homelessness, employability, and the environment. In March, the Society announced the largest ever single allocation of small grants from the Fund, with 27 charities receiving a total of £91,931. A further £20,000 was donated to the Disasters Emergency Committee to provide urgent aid to people impacted by the earthquakes in Syria and Turkey.
The Society’s growth is also reflected in colleague numbers, with an increase from just under 1,500 at the start of the year to more than 1,630 at the end of June. More than 40 more colleagues also joined on 1st July after the Society completed the legal and regulatory processes required to finalise the merger with Manchester Building Society.
Society colleagues completed more than 650 days of volunteering for good causes during the first six months of the year, including activities such as conservation, IT skills coaching and building employability, educating about money, and a variety of trusteeships. The Society also received re-accreditation as Investors in People Platinum, one of a handful of employers with Platinum IIP status, awarded only to the top 6% of firms assessed under the scheme.
Andrew Haigh added: “It has been a difficult period, but the potential difference we can make as a customer-owned, purpose-led, and community focused business is more significant than ever. As well as serving our customers better, and continuing to invest in colleagues, we are actively contributing to our communities through partnerships with Newcastle United Foundation, the Prince’s Trust and Walking With The Wounded, by growing our Community Fund at the Community Foundation, and by supporting colleagues to give their time and skills to local good causes.
“Although the economic outlook remains uncertain, the business remains resilient and well-positioned to achieve further growth whilst supporting our customers and communities by delivering great outcomes and making a positive impact where it is needed most.”
