NBSR Newcastle 125/8

 

TIDMNBSR 
 
RNS Number : 1935M 
Newcastle Building Society 
19 May 2010 
 

 
 
 
 
 
 
 
 
 
 
 
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| PRESS RELEASE                |                19th May 2010 | 
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          Newcastle Building Society Announces Repositioning Programme 
 
Newcastle Building Society has today announced the launch of the second of its 
two key phase repositioning programme. This programme, which was developed to 
support the Society's strategy of providing long-term member value, aims to 
streamline the business, which will further improve costs, enhance income and 
strengthen its foundation further. 
 
The first phase of this programme, announced recently, was successfully 
completed on 10th May, and involved a proactive capital strengthening exercise. 
 
As a result of the second key phase, which focuses on streamlining areas of the 
business, the Society has taken the decision to close four branches and make 126 
redundancies across certain business areas and a range of grades. 
 
Reduction in staffing numbers will mostly focus on back office and management 
roles, with the core aim of maintaining the current level of customer-facing 
staff. However, the Society is able to create approximately 80 customer service 
vacancies in its Solutions division, following a contract win. 
 
The branches chosen for closure are Crook, Yarm, West Road and York. The 
branches were identified based on a number of factors including whether they 
fitted into the Society's heartland strategy and/or where member usage has 
fallen significantly. 
 
Jim Willens, Chief Executive, said: "Our core strategy of providing long-term 
member value as a strong, traditional and independent regional building society 
is clear in our minds. However to remain strong we need to be realistic in the 
knowledge that this is still a very challenging climate for the financial 
services sector. 
 
"We have to make some difficult decisions but these will benefit the Society and 
the majority of its staff in the long-term. We believe that by operating with a 
slightly smaller number of branches and reduced levels of staff in certain areas 
of our business it will allow us to streamline costs and become more efficient. 
Additionally, it will allow us to focus on the things that are important to us 
being a regional independent building society; such as providing value and 
choice to members." 
 
The Society will endeavor to keep compulsory redundancies to a minimum by 
offering voluntary redundancy and helping some employees secure alternative work 
elsewhere within the organisation. 
 
As part of the repositioning programme the Society also proposes to stop future 
accruals within the Newcastle Building Society Pension & Assurance Scheme. 
Members of staff affected will be offered an alternative existing Group Personal 
Pension Scheme. 
 
In 2009 the Society attracted more than 50,000 members, an increase of over 30% 
on last year, raised more than GBP490m in net retail funds, and ensured 100% of 
its mortgage balances were funded by retail savings, which was a record figure. 
In addition to this, the Society's solvency ratio improved from 11.9% to 13.4% 
and tier 1 capital increased from 9.2% to 10.2%. 
 
                                      ENDS 
 
Notes to Editors: 
·      As a result of the first phase of the programme - the Capital Agreement - 
in addition to the GBP179 million of core tier 1 capital held by the Society as 
at 31 December 2009, the Society now also has GBP46 million of contingent core 
tier 1 capital (such contingent core tier 1 capital being equivalent to 2.2% of 
the Society's risk weighted assets). 
·      Newcastle Building Society is the 8th largest building society, in 
relation to assets, in the country and is the biggest based in the North East. 
·      It currently has 35 branches - and this will change to 31 after the 
proposed closures. 
·      The Society formally entered into a 90-day consultation on Wednesday 19th 
May 2010 with the trade union Unite regarding the proposed redundancies. 
·      www.newcastle.co.uk 
 
For more information contact: 
 
Newcastle Building Society 
+------------------------------+----------+----------------------------+ 
| Natalie Falkous              | Richard Hall                          | 
| Group Corporate              | Communications Assistant              | 
| Communications Manager       |                                       | 
+------------------------------+---------------------------------------+ 
| Newcastle Building Society   | Newcastle Building Society            | 
+------------------------------+---------------------------------------+ 
| 0191 244 2024                | 0191 244 1522                         | 
+------------------------------+---------------------------------------+ 
| 07917388329                  |                                       | 
+------------------------------+---------------------------------------+ 
| National Media Enquiries                | Regional Media Enquiries   | 
+-----------------------------------------+----------------------------+ 
| The Wriglesworth Consultancy            | Julian Christopher         | 
+-----------------------------------------+----------------------------+ 
| John Wriglesworth                       | Footprint Public Relations | 
| 07774988275                             |                            | 
| Or                                      | 07891 005034               | 
| Emma Bowden                             |                            | 
| 020 7427 1400                           |                            | 
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|                              |          |                            | 
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This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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