Strong results mark first six months
The Nottingham is pleased to announce another strong set of results for the six months ended 30th June 2016, in which it has continued to grow the membership and heartland presence of the society.
Key performance highlights include:
- Branch retail savings balances up by 11% to over £2 billion
- The Society now has 56 branches across nine counties
- Customer Net Promoter Score of 76.5% (this is almost double the average for the financial services sector)
- Gross mortgage lending of £409m and mortgage book growth of 4.6%
- Total assets of £3.45 billion up 4%
- Arrears levels remain low at 0.20% of total mortgage book
- Group pre-tax profit of £7.1m
David Marlow, Chief Executive of The Nottingham commenting on the results, said: “Our strategy is focused on providing our members access to first class building society services, whole-of-market mortgage and financial advice and estate agency services all under one roof from a source that they can trust; something that is increasingly hard to find on high streets across our heartland.
“In the first half of 2016 we have added another new location, Belper, to our network and plans are well advanced for a further four new branches to be added by the end of the year. The branch network which is the core of our Society will have increased from 31 locations in 2013 to 60 by the end of this year – underscoring the popularity of our proposition and the success of our strategy. During the first half of this year, branch based retail savings balances have increased by a further 11% and are now in excess of £2.0 billion; a record level for the Society – having only passed the £1.0 billion mark in May of 2012.
“Our unique proposition and brand of service is valued by our customers and this is demonstrated not only by our rising savings balances, increased membership and activity levels but also in our independently run customer satisfaction programme which looks specifically at the levels of advocacy amongst our customers. This is best demonstrated by our net promoter score, which currently stands at 76.5%, almost double the average for the financial services sector overall at 42%.
“The Group continues to deliver our strategy to build the franchise and has grown its balance sheet to £3.45 billion at 30 June 2016. Overall gross lending is up at £409m (June 2015: £268m) resulting in a 4.6% increase to mortgage assets, whilst we have also continued to support our savers and protect them from the low interest rate environment by offering products competitively positioned in the market. Our average rate paid to savers currently is 1.49%, almost three times the current bank base rate.
“If we are to meet the increasing demands of our customers and attract further new members to the Group, it is essential that as we grow and expand; we continue to invest in our systems, people and capability. In the first half of 2016 we have invested more than £1 million in our improvement programme. We expect to continue this in the second half of 2016 investing further in our branches and infrastructure, as well as implement a number of staff development initiatives as we work hard to make The Nottingham an employer of choice in our heartland.
“As anticipated in our 2015 Annual Report, and in line with our plan, profit levels are lower than 2015, when we delivered a record level of profit before tax, as we have looked to finely balance the conflicting needs of our savings and mortgage customers. We are pleased therefore to report pre-tax profits of £7.1m in the first six months of this year, exactly in line with that plan. The Board has a strong focus on ensuring that our level of profitability enables us to strengthen our capital base as our balance sheet grows and to continue our investment programme of improvements for the benefit of our growing member base. Our level of profitability in 2016 will be more than sufficient to achieve both of these objectives.
“The economic and political fallout from the EU referendum vote is causing uncertainty in the financial and housing markets, although it is too early to ascertain the full impact. However, as we are a UK based organisation with no members’ money invested in Eurozone countries and no direct currency exposure, our focus will be sharply on the wellbeing of the UK economy.
“The low interest rate environment is likely to remain with us for some time yet, with an increasing likelihood that bank base rates could get even closer to 0% in the coming months. Inevitably this will continue to challenge us to strike the appropriate balance between our savers and borrowers in an extremely competitive market, with mortgage rates now at an all-time low. It will be essential therefore that an incentive to save for all UK consumers is maintained.
“Overall, I am pleased with our strategic progress and confident that our good performance in the first six months of 2016 will allow us to continue to grow the business and deliver sustainable value to our customers. We believe that it is vital for the Society to continue to differentiate strongly from the big banks, through focusing on providing customers with expert advice on their financial affairs supported by a high customer service ethos – something which we are confident will always be in demand whatever the short term economic prospects.”