Society’s profit increase after ‘year like no other’
NEWCASTLE Building Society has bucked industry trends to report a small increase in profits during 2020.
The building society (NBS) has released annual results which show that operating profits rose to £16.4m, up slightly from £16.3m a year earlier. Due to increased impairments, however, profit before tax fell from £14.7m to £2m.
The society said 2020 had been “a year like no other” but it was buoyed by record mortgage lending in the second half of the year, supported by an 11% rise in its savings book.
During the year, the society welcomed almost 14,000 new savings customers, 6,000 new branch customers and 5,000 new mortgage customers.
It revealed that it had cancelled all bonuses for its executive team but had agreed a 3% staff bonus for the rest of its workforce “in recognition of the challenges that 2020 has posed and the outstanding response of colleagues”.
NBS repaid £600,000 initially claimed under the Government’s furloughing scheme, and has returned all staff who were furloughed to work.
Chief executive Andrew Haigh said: “2020 has been a year unlike any other but in many ways has served to underline the importance of our purpose, to connect our communities with a better financial future. Our purpose has been an anchor point and a focus, both of which have helped us to steer through these uncertain times.
“We aspire to exit this period of crisis and recovery in a stronger position than we might have expected to achieve without this experience – even closer to our customers and moving forward with purpose and momentum.
“We recognise that this will not be without challenge and will require a need for caution in a period of severe economic stress and facing the broader impact of the Covid-19 pandemic.
“We will be even more aligned to our purpose-led strategy, better serving our customers and communities. We will continue to invest in our technology and our people, who have inspired us in the past year with their dedication and resilience, in getting the job done to ensure the needs of our customers and clients are met.”
Mr Haigh said there were going to be “very tough times” in the economy and that the society would aim to help savers and businesses.
NBS announced in December that it was shutting its Newcastle city centre HQ to move entirely to its offices at the Cobalt business park in North Tyneside. The Portland House site is being reviewed.
The society has swum against the prevailing tide in the financial sector in recent years by opening new branches at Wooler in Northumberland and Hawes, North Yorkshire, and recently announced that it was to have a branch within the new library at Tynemouth.
It society also continued its community commitment with major support for the Newcastle United Foundation’s community facilities in the city’s west end, a project to help older people and £100,000 to launch the Community Foundation Tyne & Wear and Northumberland’s Coronavirus Recovery & Response Fund.
We will continue to invest in our technology and our people
Andrew Haigh