The West Brom announced its results for the financial year to 31 March 2020, reporting a pre-tax profit of £1.5m.
West Bromwich Building Society (the West Brom) has provided more than 5,000 mortgage payment holidays to customers in financial difficulty due to the COVID-19 crisis.
The news came as the West Brom released its results for the financial year to 31 March 2020, reporting a pre-tax profit of £1.5m.
The lender reported £569m in new mortgage lending across its extended product range, a reduction from the previous year (£691m).
Lending to support home ownership has led to a 3% increase in owner-occupied lending balances and approximately 50% of new mortgages to first-time buyers (up from 42%).
Jonathan Westhoff, chief executive at the West Brom, said: "Our end of year results come during an unprecedented global crisis that required dramatic and immediate action from government, industry and communities across the UK.
"The economic consequences of the lockdown period are secondary to the tragic human cost we have seen, and the need to safeguard individuals and protect our vital health service from being overwhelmed.
"Also, as part of the key workers group, our primary focus has been to ensure that we continue to deliver essential services, so our members can manage their finances and have access to their money when needed, as well as prioritising the safety of both members and staff."
"We have provided over 5,000 mortgage holidays to help those in financial difficulty and continue to help with mortgage completions, mortgage redemptions and product transfers.
"We have enabled penalty-free early access to savings on accounts that would normally be subject to withdrawal restrictions and facilitated transfers to nominated bank accounts or trusted third parties, so any members that are self- isolating can safely access their savings.
"We haven’t placed any of our staff on the furloughing scheme and continue to pay 100% of salaries. This includes those that have a significant reduction in working hours.
"This was our choice, driven by our clear focus on the wellbeing and financial security of the society’s staff."
He added: "Aside from our response to COVID-19, the provision of quality products and excellent customer service, plus our long-term strategies to keep control of costs and reduce legacy risk, have helped the society deliver benefits to members.
"In the highly competitive marketplace, our approach to managing the interests of savers over the last 12 months has been to preserve rates for existing members.
"We continued to deliver on our commitment to provide savers with a safe and good return by paying an average interest rate 49% (2018/19: 45%) above that paid by the market which represents an additional £13.0m (2018/19: £11.4m) in interest directly to savers.
"For borrowers, the society’s purpose of supporting home ownership led us to approving a further 3,423 new mortgages, circa 50% (2018/19: 42%) of these to first-time buyers.
"Part of this achievement was due to our new range of shared ownership products, supporting 481 borrowers to become part homeowners through both lower initial deposits and more affordable monthly payments.
"In value terms, at £569m (2018/19: £691m), our gross new lending was lower than the previous year, due to a conscious decision to protect our wider members’ best interests and scale back lending where returns would prove uneconomic or where pricing would be irresponsible for the associated risk.
"As of 31 March 2020, three month arrears rates across both our owner-occupied and buy-to-let (BTL) portfolios, at 0.33% and 0.28% respectively (2018/19: 0.36%, 0.12%), remained well below the industry averages of 0.82% and 0.37% as published by UK Finance.
"In addition, our residential lending portfolio continues to be predominantly low loan-to-value (LTV) with 74% (2018/19: 71%) of all our loans being 75% LTV or less.
"However, this excludes the over 5,000 (over 2,600 at 31 March) of borrowers who, due to financial pressures caused by their employment conditions under the lockdown, have requested a payment holiday.
"Under agreements reached across the sector, these payment holidays will not initially be recorded as arrears."
He concluded: "We are working hard to adjust to the ‘new normal’, adapting our ways of working across our branches and head office to adhere to government guidelines, and continue to provide essential services to both existing and new members.
"Despite these challenges, as a mutual, the West Brom will continue to progress.
"The best interests of both our saving and borrowing members will be at the forefront of all decisions made."
