Principality Building Society has announced its half year results for 2026.
Despite a “challenging economic backdrop”, the Society reported solid results, returning £33 million in value to its Members in the first five months of 2026 through above market savings rates.
Net interest margin (NIM) increased to 1.27% (June 2025: 1.17%). Net operating income was £86.2 million, up by £4.7 million (June 2025: £81.5 million).
The Society said it had continued to stay focused on cost management, in the face of inflationary challenges. As a result, operating expenses have remained broadly stable year on year at £60.2 million (June 2026) v £59.0 million (June 2025) while management expense ratio has remained stable, moving from 0.84% (December 2025) to 0.86%.
Underlying profit before tax remains resilient at £22.2 million (June 2025: £22.5 million), reflecting a £5.6 million impairment provisioning charge in response to the weakening economic outlook.
There was an uplift in total assets to £14.1 billion (December 2025: £13.9 billion) and a strong capital and liquidity position during the first half of 2026, with a capital ratio of 19.2% (December 2025: 18.7%) and a liquidity ratio of 13.6% (December 2025: 13.6%).
Iain Mansfield, Chief Executive Officer of Principality Building Society, said:
“The first half of the year has been dominated by continued geopolitical uncertainty, with conflict in the Middle East creating volatility across financial markets and influencing expectations for future Bank of England base rate changes. These external forces have contributed to a challenging operating environment for households and businesses across the globe.
“Despite this backdrop, the Society delivered solid financial performance, while maintaining a strong capital and liquidity position, all while managing our costs and taking deliberate decisions that strengthen the Society for the long term.
“Strong and sustainable income is what allows us to continue investing in the future of the Society, while delivering value for Members today.
“In the face of a challenging market, we continue to listen to and respond to our brokers and customers' feedback, which has meant that we have been able to take a more focused and distinctive approach to our lending, helping more people access finance for their homes, responsibly.”
Mortgage balances increased by £0.2 billion to £11.3 billion (December 2025: £11.1 billion). The Society supports 18 of 31 housing associations across Wales.
The Society's commercial lending book currently stands at £864 million alongside further commitments of nearly £300 million.
Savings balances remain robust at £11.5 billion (December 2025: £11.6 billion).
Iain said:
“Our Members entrust us with their savings in a highly competitive market. We have remained focused on attracting and retaining funding that supports the long-term strength of the Society, rather than purely pursuing balance growth.”
