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Principality Building Society Announce Interim Results for the Six Months to 30 June 2022

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Principality Building Society will continue to invest profits to support members, communities, and colleagues through the cost of living crisis after it announced a strong first half performance of 2022.

Each year Principality plans to set aside up to three per cent of its profit for projects with social purpose, and in the first half of this year, Principality has invested around £500,000 into projects such as £117,000 towards community grants across Wales via its Future Generations Fund. Principality has now helped to educate 18,000 school children and young people in the past six months, whilst donating £100,000 to charity partners Ty Hafan and Ty Gobaith Hope House children’s hospices.

Earlier this year Principality donated £20,000 to the Disasters Emergency Committee (DEC) for the conflict in Ukraine, as well as offering up to five homes to accommodate and support Ukrainian refugees who have been displaced.

The largest building society in Wales has also received carbon neutral status and hopes to reach net zero in its operations by 2030. It received accolades for being a strong employer, ranking ninth in the UK as a Great Place to Work® in the super large business category, and number one in the UK as a Great Place to Work® for women.

Strong performance

Underlying profit reached £26.1m (H1 2021: £28.6m), whilst profit before tax was £31m (H1 2021: £33.1m). More than £2.5bn in applications have been processed through Principality’s new mortgage platform. Since it was launched, mortgage applications are being processed faster than before giving the business a great platform for the future.

Julie-Ann said: “As a building society owned by our members, we are not under pressure to meet the short- term needs of shareholders. Our aim is to focus on the long-term and invest to support the future growth of the Society and support our members. Our financial performance was strong in the first six months, with £99m net growth in our mortgage book as we helped almost 2,000 first-time buyers get a home. So members can be assured we have a strong balance sheet and profitability to reinvest in the business for their benefit, to help us create better homes for members, help members to financially secure their futures, as well as trying to create a fairer society for our communities.”

KEY PERFORMANCE HIGHLIGHTS

  • Total assets of £10.5bn (31 December 2021: £10.9bn)
  • Retail mortgage balances of £8,132.6m (31 December 2021: £8,033.3m)
  • Savings balances have remained consistent at £7.9bn (31 December 2021: £7.9bn)
  • Net retail mortgage lending for the first six months of the year of £99.3m (30 June 2020: £24.7m)
  • Statutory profit before tax of £31.0m (30 June 2021: profit of £33.1m)
  • Underlying profit before tax of £26.1m (30 June 2021: profit of £28.6m)
  • Strong capital with a Common Equity Tier 1 ratio of 30.79% (30 June 2021: 30.70%)
  • Net interest margin of 1.32% (30 June 2021: 1.14%)
  • On average Principality are paying savers 0.70% for savings versus the market average of 0.29% over the last 12 months*
  • Net Promoter Score 80.9 (30 June 2021: 80.8)

Julie-Ann Haines, CEO at Principality Building Society said:

“It has been a challenging first half of the year with the cost of living crisis, and the political upheaval both at home and abroad, continuing to bite. I’m pleased to say that due to our strong first half financial results, we have been able to focus our efforts on supporting our colleagues, members, and communities, to try and reduce their worries about the current challenges.

“As inflation has increased this year, we have worked hard to balance the differing needs of our mortgage and savings customers, passing on just a quarter of the Bank of England one per cent base rate rises to our variable rate and discount mortgage members. Most of our members who save with us have benefited from at least three rate increases, ensuring we are offering competitive returns for our savers as interest rates rise.

“Last month Principality colleagues received an extra £1,000 to help them with the increasing cost of living, as food, fuel and energy prices increase significantly. As our headquarters in Cardiff opened, we introduced an innovative, fully hybrid working model which means colleagues can now work from around the UK or in the office, whatever suits their circumstances best.

“To give our members, colleagues, and communities more certainty, we also made a promise this year to keep open our branches in all the towns and cities we currently operate in Wales and England until at least 2025, so that we will retain a presence on the high street.”