TIDMNBSR
RNS Number : 2527L
Newcastle Building Society
28 July 2011
NEWCASTLE BUILDING SOCIETY
Announcement of half-year results for the six months ended 30
June 2011
Newcastle Building Society today announces continued and steady
progress on delivering its strategy with a profit before tax of
GBP1.0m reported for the six months ended 30 June 2011.
Key highlights:
-- The Society reports a profit before tax of GBP1.0m for the
six months ended 30 June 2011 compared to a loss before tax of
GBP0.9m for the first half in 2010 (excluding GBP4.0m repositioning
costs) and a profit of GBP0.2m in the second half of 2010;
-- Commercial lending wind down strategy is ahead of plan with
a reduction of GBP70.9m in the first half including the sale
of GBP31.0m of debt;
-- Solutions business continues to expand with savings balances
administered for third parties doubling in the last 12 months;
-- Business simplification continues including repayment of the
commercial securitisation programme at the first call date in
February 2011, and unwind of the covered bond programme in July
2011 following repayment of the notes;
-- Solvency ratio improved to 14.8% from 14.1% at the end of
2010;
-- Liquidity ratio remains strong at 24.9%;
-- The number of residential borrowers in arrears of 3 months
or more has fallen from 0.75% at the end of 2010 to 0.72% at
30 June 2011; 3 month arrears across the entire mortgage portfolio
has also fallen from 0.78% to 0.76%; and
-- Support for members through 90% first time buyer mortgages,
loyalty accounts and competitive savings products. Overall customer
satisfaction in the first half was 87%.
Chief Executive's Business Review:
"Last year, set against a challenging economic landscape, we set
in motion a series of changes to the Society's strategy to return
the focus to a traditional and simpler building society model,
supported by a diversified income stream, and with a leaner and
more efficient cost base. The benefits of this could be seen as
early as the second half of 2010 and I am pleased to report that
this positive trend has continued as we announce a profit before
tax of GBP1.0m for the six month period to 30(th) June 2011. As
shown in note 7 the Society's underlying profitability, before the
impact of provision adjustments, shows an improvement from a loss
of GBP2.1m for the first half of 2010 to a profit of GBP4.2m for
the first half of 2011.
However, profit is one measure of the steady progress our
strategy is showing and I am keen to outline improvements in other
key areas.
We identified last year that our cost base was too high relative
to the level of income being generated and we set out to reduce the
cost base and generate additional income, particularly from our
Solutions business. While the interest margin has remained stable,
in line with expectations, other income for the six months has
increased by almost a third and costs have reduced by over 14%.
This has resulted in a 30% improvement in our cost income ratio
from a figure of 111% for the first half of 2010 to 81% for the
first half of 2011.
The increase in other income is largely attributable to
successful growth of the Society's Solutions business, which
provides a diversified income stream based on the core competencies
of being a building society. The progress has exceeded expectations
and is due to the capability of our IT systems and our people.
There is a larger pipeline of new contracts at the 2011 half year
than in 2010 and the balances under management have doubled in the
last 12 months. We expect growth in the Solutions business to
continue.
Whilst we achieved the GBP8m reduction in the underlying cost
base that was targeted as part of the repositioning programme
launched in 2010, we continue to focus on costs, efficiency and
business simplification. This includes simplifying the group
structure; repaying the commercial securitisation programme at the
first call option in February 2011 and unwinding the covered bond
programme in July 2011 following repayment of the notes. We
continue to focus on cost optimisation and efficiency to achieve
longer term improvements in our cost income ratio.
Our strategy to concentrate more on core building society
activities continues and to achieve this we have had to focus on
unwinding several areas of legacy business, including the higher
risk commercial lending portfolio. Currently the un-wind of the
portfolio is ahead of plan with GBP71m of redemptions in the first
half including the sale of GBP31m of debt. The economic climate
combined with weak business confidence continues to present a
challenging backdrop for commercial property values and it is
therefore considered appropriate to add to provisions in this area.
The Society's provisions charge at the half year includes GBP2.5m
in relation to commercial provisions. At 30 June 2011 the Society
has one commercial property in possession and 3 months plus
commercial arrears was under 1%.
The Society's overall lending portfolio continues to be of a
high quality and the last 6 months have seen a continued
improvement in residential arrears. The number of residential
borrowers in arrears of 3 months or more has fallen over the last
12 months to 0.72% from 0.79% and 3 month arrears across the entire
mortgage portfolio has fallen from 0.82% to 0.76%. The value of
balances in 3 month or more arrears across the whole mortgage
portfolio continues to be under 0.5%
The Society's overall balance sheet reduced in the 6 month
period as a result of shrinkage in loans and advances to customers;
the majority of the shrinkage was attributable to unwind of
portfolios where the Society has ceased new lending. Another
continuing theme in 2011 has been residential customers paying off
their mortgages in full or increasing their lump sum payments
against the difficult economic backdrop. Over a third of customers
prepaying in 2011 followed this trend and the Society has seen a
50% increase in this type of transaction over the last two
years.
We were pleased to develop and introduce a wide range of
competitive products for our members during this time, which proved
very popular. The launch of further first time buyer mortgage deals
at 90% LTV helped people take their first step on the property
ladder, our members-only savings product rewarded customer loyalty,
the launch of two highly competitive five year bonds, at great
interest rates, were very popular on a national scale and our
online saver account launched in January still proves to be a
popular best buy product.
Our liquidity continues to remain strong at 24.9% with 80% of
treasury assets held in the highest quality, zero risk weighted
assets. Funding from wholesale markets remained at a relatively low
level with the wholesale funding ratio at 9.1%. Solvency also
improved from 14.1% at the end of 2010 to 14.8% with tier 1 capital
ratio increasing from 10.7% to 11.5%.
We commenced an independent customer satisfaction survey that is
part of our strategy to provide long-term member value. This
exercise produced informative and encouraging results with an
overall satisfaction rating of 87% and 89% of customers stating
that they felt valued as a customer. The results will help us shape
and build on our services and processes to add further value to our
members. We also reduced the numbers of complaints received across
the Member business, which is an indication of the hard work of our
staff and the renewed focus on customer service.
We also launched a staff engagement programme, led by a group of
staff representatives from across the business. This group aims to
evaluate, develop and build on key areas of the organisation and
the day-to-day lives of our staff as we seek to make the Newcastle
one of the most rewarding places to work in the region. We are
currently working through the project streams but we are pleased to
report progress has already been made, thanks to the hard work and
passion of our staff representatives. In February 2011 the Society
was re-accredited as an 'Investor in People' for the sixteenth
year; the Society was the first building society to be accredited
as an 'Investor in People'. The Society awarded a pay increase to
its staff on 1(st) April 2011, after a gap of two years, and
pleasingly we were able to ensure that lower paid members of staff
received an award ahead of inflation.
While some media reports suggest it is harder for graduates to
gain employment after they leave university, the Society has
introduced a graduate training scheme to provide further support to
the region's graduates. By teaming up with the University of
Northumbria we aim to offer rewarding long-term career
opportunities and 'on the job' training to talented graduates from
the region's largest university.
Corporate Social Responsibility ("CSR") remains a focus for us
as a mutual organisation and we have launched a financial education
programme for schools in our region. This was kick-started with a
primary school in Middlesbrough, with positive feedback from all
involved, including the 130 11-year-old pupils we presented to. The
wider programme will be rolled out to other regional schools
throughout the remainder of the year. We also launched our
branch-to-branch challenge, which involves a large group of Society
staff volunteers who have made a promise to walk, run or cycle to
each branch to raise money for our new charity of the year,
Macmillan Cancer Support. A number of other successful fund raising
events have taken place including a family fun day attended by over
350 staff, coffee mornings and a myriad of sponsored activities
including the Great North Run. Whilst the Society's ability to
provide high levels of financial support has been constrained over
the last 18 months, the energy and enthusiasm of our staff to
participate and contribute to our CSR activities has not.
In January we were delighted to appoint Gillian Tiplady to our
Board as Business Services Director, following a total of four
years with the Society, latterly as Head of Legal. This follows
four years at Universal Building Society, where she was a Board
member.
The economic climate will continue to deliver challenges to the
financial services sector for some time including continuing low
interest rates, escalating retail funding costs and the challenges
faced by financial institutions particularly around the changing
regulatory backdrop. Therefore, it is more important than ever that
we remain focussed on ensuring the delivery of long-term value and
service to our members, customers, employees, and the communities
in which we operate."
Jim Willens
Chief Executive
Forward-looking statements
Certain statements in this half-yearly information are
forward-looking. Although the Group believes that the expectations
reflected in these forward-looking statements are reasonable, we
can give no assurance that these expectations will prove to have
been correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those
expressed or implied by these forward-looking statements.
We undertake no obligation to update any forward-looking
statements whether as a result of new information, future events or
otherwise.
NEWCASTLE BUILDING SOCIETY GROUP
HALF-YEARLY FINANCIAL INFORMATION
Summary Consolidated Income Statement
Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
30 Jun 11 30 Jun 10 31 Dec 10
GBPm GBPm GBPm
Interest and similar income 50.1 50.2 101.0
Interest expense and similar charges (41.2) (41.2) (83.2)
---------- ---------- ----------
Net interest receivable 8.9 9.0 17.8
Other income and charges 12.5 9.4 18.8
Gains less losses from financial
instruments 0.3 0.3 0.9
Hedge ineffectiveness 0.1 (0.3) (0.9)
---------- ---------- ----------
Total operating income 21.8 18.4 36.6
Administrative expenses (16.1) (18.9) (33.7)
Depreciation (1.5) (1.6) (3.2)
Impairment credit on loans and advances
to banks 0.0 1.4 2.1
Impairment credit on debt securities 0.0 0.0 0.3
Impairment charge on loans and advances
to customers (2.9) (0.2) (1.8)
Repositioning programme 0.0 (4.0) (4.0)
Other provisions for liabilities and
charges (0.3) 0.0 (1.0)
---------- ---------- ----------
Profit/(loss) before taxation 1.0 (4.9) (4.7)
Taxation (expense)/credit (0.5) 1.3 1.0
---------- ---------- ----------
Profit/(loss) for the financial period 0.5 (3.6) (3.7)
---------- ---------- ----------
The notes on pages 10 to 13 form an integral part of this
condensed consolidated half-yearly financial information.
NEWCASTLE BUILDING SOCIETY GROUP
HALF-YEARLY FINANCIAL INFORMATION
Summary Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
30 Jun 11 30 Jun 10 31 Dec 10
GBPm GBPm GBPm
Profit/(loss) for the period 0.5 (3.6) (3.7)
Other comprehensive income
Movement on available for sale reserve 0.3 2.2 1.0
Actuarial loss on retirement benefit
obligations - - (0.5)
Income tax relating to components
of other comprehensive income - - (0.1)
---------- ---------- ----------
Other comprehensive income for the
period, net of tax 0.3 2.2 0.4
Total comprehensive income for the
period 0.8 (1.4) (3.3)
---------- ---------- ----------
The notes on pages 10 to 13 form an integral part of this
condensed consolidated half-yearly financial information.
NEWCASTLE BUILDING SOCIETY GROUP
HALF-YEARLY FINANCIAL INFORMATION
Summary Consolidated Balance Sheet
Unaudited Unaudited Audited
30 Jun 11 30 Jun 10 31 Dec 10
GBPm GBPm GBPm
ASSETS
Liquid assets 928.5 937.7 823.9
Derivative financial instruments 44.1 40.4 34.2
Loans and advances to customers 3,162.0 3,394.4 3,325.1
Fair value adjustments for hedged
risk 39.4 77.5 50.8
Assets pledged as collateral 130.3 70.5 105.4
Property, plant and equipment 24.8 27.2 26.1
Investment properties 14.3 14.8 14.3
Other assets 38.1 41.0 39.0
---------- ---------- ----------
TOTAL ASSETS 4,381.5 4,603.5 4,418.8
---------- ---------- ----------
Unaudited Unaudited Audited
30 Jun 11 30 Jun 10 31 Dec 10
GBPm GBPm GBPm
LIABILITIES
Shares 3,653.3 3,767.8 3,593.0
Fair value adjustments for hedged
risk 25.9 25.6 20.8
Deposits and debt securities 366.3 423.3 457.4
Derivative financial instruments 40.7 82.1 54.2
Other liabilities 30.2 37.2 29.1
Subordinated liabilities 58.6 59.9 58.6
Subscribed capital 29.6 29.6 29.6
Reserves 176.9 178.0 176.1
---------- ---------- ----------
TOTAL LIABILITIES 4,381.5 4,603.5 4,418.8
---------- ---------- ----------
The notes on pages 10 to 13 form an integral part of this
condensed consolidated half-yearly financial information.
NEWCASTLE BUILDING SOCIETY GROUP
HALF-YEARLY FINANCIAL INFORMATION
Summary Consolidated Statement of Movement in Members'
Interests
For the 6 months ended 30 June 2011 (unaudited)
Available
General for sale
reserve reserve Total
GBPm GBPm GBPm
At 1 January 2011 174.6 1.5 176.1
Movement in the period 0.5 0.3 0.8
At 30 June 2011 175.1 1.8 176.9
---------- ----------- ------
For the 6 months ended 30 June 2010 (unaudited)
Available
General for sale
reserve reserve Total
GBPm GBPm GBPm
At 1 January 2010 178.6 0.8 179.4
Movement in the period (3.6) 2.2 (1.4)
At 30 June 2010 175.0 3.0 178.0
---------- ----------- ------
For the year ended 31 December 2010 (audited)
Available
General for sale
reserve reserve Total
GBPm GBPm GBPm
At 1 January 2010 178.6 0.8 179.4
Movement in the year (4.0) 0.7 (3.3)
At 31 December 2010 174.6 1.5 176.1
---------- ----------- ------
The notes on pages 10 to 13 form an integral part of this
condensed consolidated half-yearly financial information.
NEWCASTLE BUILDING SOCIETY GROUP
HALF-YEARLY FINANCIAL INFORMATION
Summary Consolidated Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
30 Jun 11 30 Jun 10 31 Dec 10
GBPm GBPm GBPm
Net cash flows from operating activities 113.6 (65.0) (92.3)
Payment into defined benefit pension
scheme (0.4) (0.4) (0.4)
Net cash flows from investing activities (57.6) (237.4) (219.8)
Net cash flows from financing activities (3.0) (2.6) (4.6)
---------- ---------- ----------
Net increase/(decrease) in cash
and cash equivalents 52.6 (305.4) (317.1)
---------- ---------- ----------
Cash and cash equivalents at the
start of period 360.9 678.0 678.0
---------- ---------- ----------
Cash and cash equivalents at the
end of the period 413.5 372.6 360.9
---------- ---------- ----------
Other percentages
Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
30 Jun 11 30 Jun 10 31 Dec 10
% % %
Gross capital as a percentage of
shares and borrowings 6.6 6.6 6.7
Liquid assets as a percentage of
shares and borrowings 24.9 27.0 25.2
Wholesale deposits as a % of shares
and borrowings 9.1 8.3 9.5
Net interest receivable as a % of
mean total assets 0.41 0.39 0.40
Management expenses as a percentage
of income 81.1 111.4 111.7
Profit/(loss) after tax as a % of
mean total assets 0.02 (0.2) (0.8)
(including repositioning programme
costs)
Profit/(loss) after tax as a % of
mean total assets 0.02 (0.05) (0.04)
(excluding repositioning programme
costs)
Management expenses as a % of mean
total assets* 0.80 1.06 0.91
(including repositioning programme
costs)
Management expenses as a % of mean
total assets* 0.80 0.89 0.82
(excluding repositioning programme
costs)
* Expressed on an annualised basis
The notes on pages 10 to 13 form an integral part of this
condensed consolidated half-yearly financial information.
NEWCASTLE BUILDING SOCIETY GROUP
HALF-YEARLY FINANCIAL INFORMATION
Notes
1. General information
1.1. The half-yearly financial information set out above, which
was approved by the Board of Directors on, 26(th) July 2011, does
not constitute accounts within the meaning of the Building
Societies Act 1986.
1.2. The financial information for the 12 months to 31 December
2010 has been extracted from the accounts for that year which have
been filed with the Financial Services Authority and on which the
auditors gave an unqualified opinion.
1.3. The half-yearly financial information for the 6 months to
30 June 2011 and the 6 months to 30 June 2010 is unaudited.
1.4. The announcement will be sent to holders of the Society's
permanent interest bearing shares. Copies are available from the
Society's Principal Office at Portland House, Newcastle upon Tyne
NE1 8AL.
2. Basis of preparation
This condensed consolidated half-yearly financial information
for the half-year ended 30 June 2011 has been prepared in
accordance with the Disclosure and Transparency Rules of the
Financial Services Authority and with IAS 34, 'Interim financial
reporting' as adopted by the European Union. The half-yearly
financial information should be read in conjunction with the annual
financial statements for the year ended 31 December 2010, which
have been prepared in accordance with IFRSs as adopted by the
European Union.
The Group meets its day-to-day liquidity requirements through
managing both its retail and wholesale funding sources and is
required to maintain a sufficient buffer over regulatory capital
and liquidity requirements. The Group's risk appetite as well as
its management and control processes for managing exposure to
credit, market, liquidity and operational risk are described in the
Risk Management Report in the Annual Report and Accounts for 2010.
The Group's forecasts and projections, including stress testing and
trading sensitivity analysis, shows that the Group will be able to
operate at adequate levels of liquidity and capital for the
foreseeable future. After making enquiries, the Directors are
satisfied that the Group has adequate resources to continue in
operational existence for the foreseeable future and that it is
therefore appropriate to continue to adopt the going concern basis
in preparing the interim financial statements.
3. Accounting policies
Except as described below, the half-yearly financial information
has been prepared on the basis of the accounting policies adopted
for the year ended 31 December 2010, as described in those
financial statements.
The following new standards and amendments to standards have
been adopted for the first time for the financial year beginning on
1 January 2011:-
-- IAS 24 (Revised): Related Party Disclosures;
-- Amendment to IAS 32 Financial instruments: Presentation on
classification of rights issues;
-- Amendment to IFRS 1, First time adoption on financial
instrument disclosures;
-- Amendment to IFRIC 14, Pre-payments of a Minimum Funding
Requirement;
-- IFRIC 19 Extinguishing financial liabilities with equity
instruments; and
-- Improvements to IFRSs (2011).
Adoption of these new standards and amendments has had no impact
on the results for the period.
As part of the annual improvements to IFRSs (2011) the group has
adopted IAS 34 (Revised): Interim Financial Reporting. The revised
standard places greater emphasis on the disclosure principles for
significant events and transactions. Additional requirements cover
disclosure of changes to fair value measurements (if significant)
and the need to update relevant information from the most recent
annual report. Where applicable these disclosures have been made in
the half yearly financial information.
NEWCASTLE BUILDING SOCIETY GROUP
HALF-YEARLY FINANCIAL INFORMATION
4. Principal Risks and Uncertainties
The Group's activities expose it to a variety of risks: market
risk (including interest rate risk), credit risk, liquidity risk
and operational risk. There have been no changes in the principal
risks and uncertainties facing the Group and no significant changes
to these risks are expected in the second half of the year.
The interim condensed consolidated financial statements do not
include all risk management information and disclosures required in
the annual financial statements, and should be read in conjunction
with the Group's Annual Report and Accounts for December 2010.
There have been no major changes in the risk management
departments since year end or in any risk management policies or
procedures.
5. Taxation
The effective tax charge is 44% (first half 2010 - 27%). The tax
charge has been calculated as far as possible to approximate to the
expected full year tax rate and includes an adjustment to deferred
tax assets for changes in the enacted corporation tax rate changing
from 27% to 26%.
Further changes to the enacted tax rate subsequent to the period
end may impact the overall effective tax rate for the full
year.
6. Related Party Transactions
There have been no changes to the nature of the related party
transactions entered into since the last annual report. There were
no material related party transactions in the period other than the
amounts owed by Bamburgh Finance plc which were repaid following
the first call date in February 2011, amounting to GBP85.2m.
NEWCASTLE BUILDING SOCIETY GROUP
HALF-YEARLY FINANCIAL INFORMATION
7. Segment information
The chief operating decision maker has been identified as the
Board of Directors. The Board reviews the Group's internal
reporting in order to assess performance and allocate resources.
Management has determined the operating segments based on these
reports. Following the management approach of IFRS 8, operating
segments are reported in accordance with the internal reporting
provided to the Board of Directors. The operating segments used by
the Group meet the definition of a reportable segment under IFRS
8.
The 'Member business' provides mortgage, savings, investment and
insurance products to members and customers. The 'Solutions
business' provides business to business services through people,
processes and technology. The Board assesses performance based on
profit before tax after the allocation of all central costs. Income
and directly attributable costs are allocated to each segment and
support costs are apportioned, based on direct salary costs.
No segment information is presented on geographical lines,
because substantially all of the Group's activities are in the
United Kingdom.
6 months to 30 June 2011 Member Solutions
Business Business Total
GBPm GBPm GBPm
Net interest receivable 8.9 - 8.9
Other income and charges 5.7 6.8 12.5
Gains less losses from financial
instruments 0.3 - 0.3
Hedge ineffectiveness 0.1 - 0.1
Administrative expenses (11.9) (4.2) (16.1)
Depreciation (1.1) (0.4) (1.5)
--------- ---------- -------
Operating profit before provisions 2.0 2.2 4.2
Impairment losses and provisions
for liabilities and charges (2.9) (0.3) (3.2)
--------- ---------- -------
(Loss)/profit before taxation (0.9) 1.9 1.0
Taxation expense (0.5)
-------
Profit for the financial period 0.5
-------
6 months to 30 June 2010 Member Solutions
Business Business Total
GBPm GBPm GBPm
Net interest receivable 9.0 - 9.0
Other income and charges 5.2 4.2 9.4
Gains less losses from financial
instruments 0.3 - 0.3
Hedge ineffectiveness (0.3) - (0.3)
Administrative expenses (15.0) (3.9) (18.9)
Depreciation (1.2) (0.4) (1.6)
--------- ---------- -------
Operating loss before provisions (2.0) (0.1) (2.1)
Impairment losses and provisions
for liabilities and charges 1.4 (0.2) 1.2
Repositioning provision (4.0) - (4.0)
--------- ---------- -------
Loss before taxation (4.6) (0.3) (4.9)
Taxation credit 1.3
-------
Loss for the financial period (3.6)
-------
Member Solutions
Year to 31 December 2010 Business Business Total
GBPm GBPm GBPm
Net interest receivable 17.8 - 17.8
Other income and charges 9.8 9.0 18.8
Gains less losses from financial
instruments 0.9 - 0.9
Hedge ineffectiveness (0.9) - (0.9)
Administrative expenses (25.7) (8.0) (33.7)
Depreciation (2.4) (0.8) (3.2)
--------- ---------- -------
Operating loss before provisions (0.5) 0.2 (0.3)
Impairment losses and provisions
for liabilities and charges 0.5 (0.9) (0.4)
Repositioning provision (4.0) - (4.0)
--------- ---------- -------
Loss before taxation (4.0) (0.7) (4.7)
Taxation credit 1.0
-------
Loss for the financial period (3.7)
-------
NEWCASTLE BUILDING SOCIETY GROUP
HALF-YEARLY FINANCIAL INFORMATION
Statement of directors' responsibilities
The directors confirm that this condensed consolidated
half-yearly financial information has been prepared in accordance
with IAS 34 as adopted by the European Union, and that the
half-yearly management report herein includes a fair review of the
information required by the Disclosure and Transparency Rules (DTR
4.2.7 and DTR 4.2.8).
The directors of Newcastle Building Society are listed in the
Annual Report for 2010. The following changes have occurred in the
period:
Gillian Tiplady (appointed 11 January 2011)
Ann Cairns (resigned 30 June 2011)
On behalf of the Board
FD Holborn
Chairman
26(th) July 2011
NEWCASTLE BUILDING SOCIETY GROUP
HALF-YEARLY FINANCIAL INFORMATION
Independent review report to Newcastle Building Society
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2011, which comprises the Summary
Consolidated Income Statement, the Summary Consolidated Statement
of Comprehensive Income, the Summary Consolidated Balance Sheet,
the Summary Consolidated Statement of Changes in Members'
Interests, the Summary Consolidated Cash Flow Statement and related
notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Services Authority.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review. This report, including the
conclusion, has been prepared for and only for the company for the
purpose of the Disclosure and Transparency Rules of the Financial
Services Authority and for no other purpose. We do not, in
producing this report, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown
or into whose hands it may come save where expressly agreed by our
prior consent in writing.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2011 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP Chartered Accountants Newcastle upon
Tyne
26(th) July 2011
Notes:
(a) The maintenance and integrity of the Newcastle Building
Society website is the responsibility of the directors; the work
carried out by the auditors does not involve consideration of these
matters and, accordingly, the auditors accept no responsibility for
any changes that may have occurred to the financial statements
since they were initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
ENDS
Media Contact:
Natalie Falkous
Group Corporate Communications Manager
Tel: 0191 244 2024
Mobile: 07917388329
Email: natalie.falkous@newcastle.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUQAMUPGUMR
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