Despite some economic uncertainty, 2017 was a year of solid growth across mortgage lending, savings and financial advice for Newcastle Building Society.
Gross residential mortgage lending increased by 8% to £535m, while net residential mortgage lending was also up 11% to £220m. The increase in lending reflects the investment made in distribution, product range, and online systems capability for brokers.
Whilst Newcastle Building Society’s lending increased, the level of mortgage arrears reduced further in 2017. This is well below UK Finance-reported averages and at a record low for the Society, reflecting the good credit quality of the mortgage book.
In 2017 the Society launched a range of regular savings products which included Help to Buy ISA and children’s savings accounts, with this range set to be expanded further in 2018.
Profit before tax increased by £5m to £13.1m in 2017 (from £8.1m for 2016), an increase of 62%, reflecting a fall in impairment charges and the Financial Services Compensation Levy, together with a one-off credit of £2.2m arising on the purchase of its Cobalt offices in the first half of the year.
Operating profit before provisions and one-off gains increased by £0.2m to £12.1m in 2017 (2016: £11.9m). Whilst overall income was up by 6%this was offset by significant ongoing investment into the business including IT systems and enhanced operational resilience.
Chief executive, Andrew Haigh commented: “We’re very pleased with such a strong set of results which are the foundation for delivering our role as the North East’s building society. We are not just about encouraging people to save and plan their finances, and helping them to own their home, we believe it is also vitally important to support our communities in making positive changes, providing varied and meaningful career opportunities, and a great place to work for people across our region.”
Andrew continued: “We can see the effects of a lack of financial understanding in the rising levels of debt in the UK, while pension changes have left many bewildered. The withdrawal of many banks from financial advice provision and continued branch closures are not helpful to people who need access to financial advice and information, from the basics to the more complex.
“We continue to focus on the provision of friendly, accessible financial advice and branch services across our North East and Cumbria heartland. We are committed to maintaining a strong branch network, supporting the High Street in towns and cities across the region. ”