Business Highlights 2004:
- Total assets up 10% to £2.3 billion
- Gross new mortgage lending of £583 million
- Net savings receipts of £122 million
- Management expense ratio reduced from 0.81% to 0.80%
- Profit after tax up 15% to £8.9 million
- Total capital up £18 million to £133 million
John Parker, chief executive, comments: “We achieved strong mortgage lending in the year which reached £583 million, only slightly down on the figure of £620 million in 2003. On the savings side, we launched a number of competitive bonds and a very successful base rate tracker, resulting in net savings receipts of £122 million.
“At the same time, we have continued to focus both on the efficiency of the Society’s business and on improving the service we provide to our members. We have invested nearly £2 million in our branches and computer systems, a further £1 million to comply with the new mortgage rules and at the same time have succeeded in reducing the ratio of management expenses to mean assets from 0.81% to 0.80%.
“With this continued emphasis on efficiency, we are able to offer our customers very attractive products at highly competitive pricing. Once again in 2004, we reduced our net interest margin (the difference between the average interest we pay our savers and receive from our borrowers), from 1.27% to 1.20%.
“In the context of fierce competition, a slowing mortgage market and the cost of regulation, I’m very pleased to be able to report a 15% increase in profit for the year. As a mutual building society, we do not seek to maximise our profits but we need to generate sufficient extra reserves to maintain our capital strength and to support future investment in the business. In 2004 the Society’s total capital increased by £18 million to £133 million.
“Looking to the future, the Society remains in great shape to face the challenges of what we expect to be a highly competitive market for mortgages and savings throughout 2005. We expect the housing market to continue to slow down steadily, but to avoid a sharp correction. As ever, we remain firmly committed to offering all our customers excellent long term value in our range of savings, mortgages, insurance, credit cards and personal loans.”
