Building on record-breaking performance in 2003, the Newcastle-based Society also exceeded its targets for net mortgage lending and retail funding, which were more than 25% higher than originally forecast.
In addition, the results reveal that net savings inflows to the Society were £25 million increasing balances to £389 million, with almost 5000 new member savings accounts being opened.
Operating profits were held at £1.9 million, which is in line with the Society’s strategy of maintaining capital at a level appropriate for a mutual Building Society, optimising rather than maximising profits in order to manage overall financial strength.
Kevin Robinson, Chief Executive of Universal, said: "I am very pleased to report on another successful year for the Society. Universal’s performance in 2004 was once again a strong one.
"The past 12 months have not been easy in both mortgage and savings markets and the introduction of mortgage regulation has meant the Society has had to allocate considerable resources throughout the year in preparation. It is with some pride that I can report that not only have we risen to the challenge, but have exceeded our expectations in all key areas of the business and delivered significant benefits to our members.”
In spite of the additional costs resulting from the requirements of the new Financial Services Authority mortgage and insurance regulatory regime, results also show the management expense ratio improved to £1.07 per £100 of assets, an improvement from £1.16 per £100
Overall arrears and possession levels were at their lowest levels for more than ten years.
Maintaining a regular presence in Best Buy tables with products such as the Tracker Two account and the launch of an innovative new Offset mortgage account helped increase net savings inflow to the Society.
Other highlights include the addition of a new Commercial Lending arm and the introduction of a new Legal Services function offering in-house conveyancing for remortgages. The Offset mortgage and the re-mortgage conveyancing service were recognised nationally when the Society won the Mortgage Finance Gazette award for Innovation in the Regional Lender category.
Universal’s community involvement has seen the Society’s staff donate time and effort into raising funds for Tiny Lives, which supports the special care baby unit at Newcastle’s Royal Victoria Infirmary. The Society also supports Seven Stories, the Centre for Children’s Books, with a unique arts and education outreach programme, involving schools and community groups throughout the North East of England.
Kevin Robinson concluded: “Universal is committed to maximising opportunities through competitive products and excellent services, and this strategy continues to add to our success.
“Community involvement is also very important to us and there is no doubt that our success is complemented by raising money for charity and developing arts initiatives for school children around the region. We are looking forward to developing both strands of activity further in 2005.”
