In its annual report and accounts it reveals that total assets rose last year by 23% to £1.03bn – making it more than two and a half times the size it was just three years ago. New mortgage advances increased by a further 12% to just under £280m, and new deposits were more than £340m. All of this has been achieved without compromising quality, as demonstrated by its negligible mortgage arrears.
In his statement, the Chairman, said: “This growth, together with the progress made in modernising the group’s operations provides a firm foundation for the future in an increasingly competitive environment. This is not growth for growth’s sake but part of a strategy to drive down relative costs. In order to maintain a strong competitive position and deliver the benefits of mutuality to members we aim to have the lowest cost ratio in the sector within five years.”
Last year saw a further reduction in the management expense ratio from 94p to 85p per £100 of assets. This is already lower than most of the society’s peer group and is set to reduce further as the benefits of modernisation are harnessed. Part of that programme has been the transfer of seven of its eleven branches to agencies and the outsourcing of some back office functions to India which will enable the management to focus on key development while maintaining existing member access to services.
Mike Lazenby, Chief Executive of Kent Reliance commented: “All building societies will need to find ways of reducing relative cost in order to be able to operate on a finer interest margin as competition in the sector intensifies even more – at the same time coping with increasing regulation.
“Over the past three years we have addressed this through our modernisation and growth strategy, so that we are well placed to deal with further planned regulation. Investment in technology and process re-engineering has streamlined systems, so that significant volumes of work can be handled without increasing staff numbers.”
