The chief executive of Newcastle Building Society has hailed 2021 as a “year of achievement” for the organisation, as it chalked up a large rise in profits.
Based at Cobalt Business Park, North Tyneside, since moving out of its former head office in Newcastle city centre, the organisation is the North East’s largest building society with assets of £4.9bn and 30 branches across the North East, Cumbria and North Yorkshire.
The society has now published full year results covering 2021, in which it saw pre-tax profit for the year rocket from £1.4m to £29.1m, while operating profit before impairments and provisions increased significantly by £13.6m to £28.5m.
Read more: Find more finance stories here
Gross mortgage lending for the year was £861m, up from £645m and its net core residential lending was £330m, up from £228m. Key underlying adjustments of £6.5m resulted in operating profit on an underlying basis of £22.0m, an increase of £5.1m on 2020.
Recognising that achieving the dream of home ownership without family or other financial assistance can often seem out of reach when a large deposit is required, the society participated in the launch of two innovative mortgage support schemes to help people onto the housing ladder.
Newcastle Building Society was the first lender to offer mortgages under ‘Deposit Unlock’, an insurance-backed collaboration with the Home Builders Federation which helps those with a small deposit to realise their dream of owning a new-build home.
The society was also one of the initial lenders to sign up to the Government’s First Homes scheme which helps local first-time buyers – particularly key workers such as NHS staff and armed forces veterans – onto the property ladder by offering homes at a discount of at least 30% compared to the market price.
During the year more than £82m of funds were invested for members through its advice subsidiary, Newcastle Financial Advisers Limited, and more than £750,000 was given out in community funding through charity partnerships, community grants and colleague fundraising matches.
Meanwhile, its customer satisfaction score reached an all-time high of 95%, while its net promoter score also improved further to +82, up from +78.
During the year the society also welcomed James Ramsbotham, former CEO of the North East England Chamber of Commerce, to the board as its new chair.
As the society published its results Andrew Haigh, chief executive told shareholders: “For your society despite the many challenges, 2021 was a year of achievement, characterised by a spirit of can do, innovation, agility, responsiveness, ongoing commitment and investment.
“We employ over 1,300 people and continuously invest in our colleagues, creating opportunities for talented individuals from a wide variety of backgrounds to succeed. We work with like-minded partners who share our aim, not just to make a positive difference, but to help create environments where people can overcome disadvantage and ultimately thrive.
“In addition to positive headlines in our financial performance, we remain strongly capitalised and continue to operate with appropriate levels of liquidity.”
While other banks have been closing large number of high street branches, the society said it was important its community network remained in place - especially during the pandemic.
It restarted its multimillion-pound branch investment programme, which led to the relocation of the West Denton branch and the full refurbishment of its branch in Bishop Auckland. In both locations a dedicated community room forms part of the new design and is available for local people and community groups to use free of charge.
Plans for a brand new community branch in the library in Tynemouth remain ongoing and other partnership opportunities across the branch network are progressing.
Mr Haigh said: “Despite the ongoing national trend of bank branch closures, we believe in the value of face to face customer contact and maintaining a physical presence within the communities we serve. We remain committed to our high streets and continue to invest in our branch network, as well as new digital technologies. Looking after our customers means being available to them and making it easy for them to interact with us in the way they choose.
“We remained ‘open for business’ throughout the pandemic. We have maintained a full branch operation including access to cash, which was vital for some of our most vulnerable customers.”
