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Financial results

Financial results for the year ended 31 December 2016

Highlights include:

  • Record growth in mortgages: Mortgage assets increased by £3.5 billion, representing growth of 12%, more than four times faster than the market1.
  • Record savings balances: Savings deposit balances grew by 11%, nearly twice the rate of the market1.
  • Strong capital: Profit before tax increased by 11% to £239 million, increasing the Common Equity Tier 1 (CET 1) ratio to 32%, the highest reported by any top 20 lender2 and a leverage ratio of over 4%.
  • Low costs: The Society's cost to mean asset ratio reduced to 0.41%3, the lowest reported by any building society4 and key to our ability to offer consistently competitive interest rates.
  • Low risk: The Society is a low risk lender which protects individual borrowers and the Society alike. During the year, arrears greater than 2.5% of the balance due were less than a quarter of the industry average5.
  • Low margin: The Society aims to operate at a low net interest margin6. The comparatively low margin of 1.06% in 2016 is a tangible example of returning value to members, underpinned by low costs and low credit losses.
  • Competitive savings rates: As testament to this and in an unprecedented period of low interest rates, our average savings rate in 2016 was 1.77% compared with a market average of 0.92%7.
  • Exceptional customer service: The Society works hard to sustain and improve the service it provides to members in branches, over the phone, online and also to intermediaries. It measures this using the common metric of Net Promoter Score® and in 2016 achieved a very high score of +708, representing a strong endorsement from our members.
  • Highly engaged employees: Excellent service is delivered by our people, who are proud to Put Members First. In 2016 the Society was awarded the ORC International Award for the highest employee engagement of any medium-sized company in Europe that it surveyed.
  • Supporting local communities: In 2016 over three quarters of employees were actively involved in volunteering, fundraising or raising awareness for local charities and community groups.

1Source: Bank of England
2Source: Council of Mortgage Lenders - 2015 top mortgage lenders (balance outstanding) - latest published CET 1 data, as at 23 February 2017.
3Administrative expenses, depreciation and amortisation/Average total assets.
4As at 23 February 2017.
5Source: Prudential Regulation Authority – Quarter 1, Quarter 2 and Quarter 3 data. Arrears greater than 2.5% of the balance due, including possessions.
6Net interest income as a percentage of average total assets.
7The Society’s average month end savings rate (Society mix of products) compared to the Bank of England weighted average rate for household interest-bearing deposits (market mix of products).
8Net Promoter®, Net Promoter Score®, and NPS® are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld. NPS of +70, is a calculated average from 5 surveys: branch survey of 12,732 customers, savings contact centre survey of 17,461 callers, mortgage contact centre survey of 1,910 callers, online survey amongst 4,214 users, and a survey amongst 1,976 brokers.

You can find out more information about these results by downloading our 2016 end of year financial report (PDF 111KB)Opens in a new window