Nottingham Building Society

Results for the six-month period ended 30^th June 2024

Nottingham Building Society delivers a positive financial performance, achieving growth in mortgage lending in a challenging economic environment and progress in transformation

The key performance indicators disclosed below are based on the position at 30^th June or for the 6-month period ended 30^th June, unless otherwise stated. The average Liquidity Coverage Ratio ('LCR') represents a 12-month average for the period ended 30^th June 2024.

·    £525.7m gross new lending (2023: £457.1m), representing an increase of £68.6m or 15.0%;

·    £3.9bn total mortgage assets (2023: £3.3bn), being growth of £0.6bn or 18.6%;

·    4,069 new mortgage customers (2023: 3,630), an increase of 12.1%;

·    £4.0bn total savings balance (2023: £3.1bn), an uplift of £0.9bn;

·    £71.5m total interest paid to savers (2023: £35.4m), an increase of £36.1m;

·    £9.0m underlying profit before tax (2023: £13.7m), representing a decrease of £4.7m;

·    £0.7m profit before tax (2023: profit before tax £11.7m), representing a decrease of £11.0m and incorporates anticipated expense associated with Philips Trust Corporation;

·    1.87% underlying net interest margin (2023: 2.00%), being an absolute decrease of 0.13%;

·    76.6% underlying cost : income ratio (2023: 64.4%), an increase of 12.2%;

·    Expected coverage loss coverage ratio of 15bps (2023: 18bps), a decrease of 3 bps;

·    The Nottingham continues to benefit from a robust capital / liquidity base, demonstrated by:

o  14.0% CET1 ratio (2023: 16.3%);

o  5.3% Leverage ratio (2023: 5.9%);

o  169.3% average LCR (2023: 177.3%);

·    4.9 Trustpilot score (2023: 4.8);

·    61.3% net promoter score (2023: 67.0%); and

·    1,200 colleague volunteering hours (2023: 817)

Sue Hayes, Chief Executive Officer ('CEO') commented on the results:

"I am pleased with our financial results for the first six-months in 2024 which generated an underlying profit of £9.0m (2023: £13.7m).

Following our decision to support members impacted by Philips Trust Corporation through a voluntary support payment, our profit has reduced in the first half of 2024 to a Profit Before Tax ('PBT') of £0.7m (2023: PBT of £11.7m).  

Our underlying business performance is strong with an 18.6% increase in gross mortgage balances compared with June 2023. We achieved significant growth in lending while the overall UK mortgage market grew substantially less.

We continue to invest in both our core IT systems and in developing innovation that will improve our mortgage application and credit risk decisioning processes in the future.

Alongside this, we achieved good growth in our savings balances of 26.9% compared with June 2023. We diversified our proposition to offer a variety of attractive products and savings rates to our customers via our branch network and online savings app. As interest rates have risen and remained high throughout this year, we have focused on paying savers the best rates we can whilst doing what we need to strengthen the Society. We paid a total of £71.5m in interest to savers in 2024 (2023: £35.4m).

Looking to the future, we will continue to progress our transformation plans, delivering the great customer service we know our members value whilst continuing to focus on innovation in our products and propositions in order to build a future fit society for our members and brokers."

Sue Hayes

Chief Executive Officer

24^th July 2024