TIDMNBSR
RNS Number : 4474K
Newcastle Building Society
30 July 2013
NEWCASTLE BUILDING SOCIETY
Announcement of half-year results for the six months ended 30
June 2013
Newcastle Building Society today announces continuing
improvement in profitability and further progress on delivering its
long-term strategy with a profit before tax of GBP0.8m reported for
the six months ended 30 June 2013.
Key Highlights
------------------------------------------------------------------------
* Profit before tax of GBP0.8m for the six months ended
30 June 2013 compared to a profit before tax of
GBP0.5m for the six months ended 30 June 2012.
* Operating profit before impairments, provisions and
exceptional items improved to GBP5.8m from GBP4.3m.
* The Society's financial advice subsidiary, Newcastle
Financial Services Limited ("NFSL"), completed a
smooth transition to the new regulatory regime under
the Retail Distribution Review ("RDR") which
commenced on 1(st) January 2013. NFSL has exceeded
planned profitability in the first half of the year.
* Gross residential mortgage lending in the first half
of 2013 has almost equalled the residential mortgage
lending for the whole of 2012 and the Society is on
track to achieve its target of doubling gross
mortgage lending in 2013 compared to 2012.
* Income from the Society's third party servicing
Solutions business remained in line with expectations
with a very strong pipeline of new contracts
currently being progressed.
* Wind-down in legacy mortgage portfolios, where the
Society is no longer lending, continued on plan with
a GBP37m reduction in the 6 months to 30 June 2013
with a greater reduction expected in the second half.
Commercial provisions have been increased by GBP5m
reflecting the backdrop for commercial property
values.
* The number of mortgages in arrears by 3 months or
more continued at a low level of 0.7%; much lower
than the UK average of 1.28%. Within this figure the
number of residential borrowers in arrears of 3
months or more reduced to 0.68% at 30 June 2013
compared to 0.75% at the end of 2012.
* Solvency ratio improved to 16.9% from 16.4% at the
end of 2012. Core tier 1 capital ratio improved from
10.7% to 11.1%.
* Liquidity ratio remains strong at 25.8% (30.2% at
31/12/12).
* Support for members continued through 95% LTV first
time buyer mortgages, charity linked savings accounts
and competitive savings products.
* Overall customer satisfaction is at 92% with
satisfaction in NFSL also at 92%.
------------------------------------------------------------------------
Chief Executive's Review
The UK economy has avoided a return to recession and there are
some signs that we may be on a path to recovery albeit a slow and
winding one. The Housing Market is showing some increased activity
but still at very modest levels compared to historical trends.
Mortgage rates have fallen following the launch of the Funding for
Lending Scheme ("FLS") but on the flipside savings rates have also
reduced. The introduction of RDR in January 2013 has presented NFSL
with an opportunity as it has caused several financial advice
providers to exit the market (or provide services only to high net
worth individuals) as the fee based income is significantly below
pre RDR commission levels, making it more difficult to provide
financial advice to customers, profitably.
Against this backdrop we believe we have made excellent progress
in the first half of 2013 with improving profitability, increased
residential lending, successful transition to the RDR regime in our
financial advice subsidiary which is trading profitably, continuing
wind down of legacy portfolios, reducing arrears rates and at the
same time achieving excellent customer satisfaction scores and
reducing complaints.
Improving Profitability
Profit before tax was GBP0.8m for the six months ended 30 June
2013 compared to GBP0.5m for the first half 2012. Operating profit
before impairments, provisions and exceptional items increased from
GBP4.3m to GBP5.8m.
Interest margin improved from 42bp to 59bp reflecting the
positive impact of new lending, lower funding costs and improved
returns on non buffer liquidity.
Other income reduced from GBP13.8m to GBP12.6m due mainly to
reduced income from the Society's financial advice subsidiary
following the RDR transition; while income is down the subsidiary
is trading profitably and slightly ahead of plan. Income from the
Solutions business was flat at GBP7.8m but this was in line with
expectations given the impact of the FLS on demand for savings
balances and therefore related savings administration services.
Growth in the Solutions business income in the short to medium term
will be achieved via conversion of the excellent pipeline with
organic growth expected in the medium to longer term following
withdrawal of the FLS. The Society increased the provision held
against investment properties held for sale by GBP0.8m, to ensure
that wind down of this legacy portfolio is achieved within the next
12 months.
Management expenses reduced by GBP0.5m from GBP18.4m to GBP17.9m
reflecting efficiency and cost improvements which more than offset
the impact of the annual salary review. In addition, the cost base
within NFSL was also subject to review and re-set reflecting the
new RDR framework. Whilst management expenses reduced the Society's
balance sheet size also reduced which resulted in an increase in
the management expenses ratio from 0.88% to 0.92%. Due to the
Society's ongoing strategy of simplification and de-risking, the
size of the balance sheet has reduced and in the short term is
expected to reduce further. In addition, as the Solutions business
increases costs without increasing the Society's balance sheet size
a more meaningful measure of cost efficiency is the Cost to Income
ratio. The ratio improved from 82% for the first half of 2012 to
76% for the six months ended 30 June 2013, due to improved cost to
income ratios in both the Member and Solutions businesses. The
Solutions business provides a diversified income stream for the
Society based on core competencies and enhances profitability.
Complaints reduced in the first half of 2013 for both MPPI and
non-MPPI complaints. It is pleasing that we have started to see a
reduction in the number of MPPI complaints although is it still of
concern that over a third of the MPPI complaints coming through are
speculative i.e. the complainant didn't have a product with the
Society. The Society has never sold single premium MPPI and we have
not seen any evidence of systemic mis-selling issues.
Mortgage loss provisions amounted to GBP3.9m compared to GBP3.2m
for the same period last year, with the majority of provisions
continuing to relate to mortgages secured on commercial
property.
It is disappointing that we have seen a further increase in the
charge levied by the Financial Services Compensation Scheme in
respect of failed banks. The charge for the half year increased
from GBP0.8m to GBP1.1m reflecting that deposit takers are now also
contributing to the capital shortfalls on the loans advanced to
bail out the banks, as well as the interest cost. The FSCS levy
represents a greater burden on financial institutions funded by
retail deposits as they bear a higher proportion of the charge than
institutions funded via wholesale markets.
Higher Capital Ratios
The Society's capital ratios continue to improve as higher risk
assets, with higher capital requirements, redeem from the Society's
balance sheet. The overall Solvency ratio increased to 16.9% from
15.9% at the same time last year and Tier 1 ratio improved from
12.3% to 13.1% over the same period. Core tier 1 capital ratio, the
key measure of focus under new capital regulations, improved from
10.5% to 11.1%.
Strong Liquidity
Liquidity continues at a strong level, in excess of 25%, and
means that the Society already has funding in place to support
mortgage lending plans in the second half.
Lower Credit Risk
The number of mortgages in arrears by 3 months or more continued
at a level lower than the UK average, at 0.70% compared to 0.75% at
the end of 2012. Within this figure the value of residential
borrowers in arrears of 3 months or more was 0.68% at 30 June 2013
compared to 0.75% at the end of 2012. Possession cases continued at
low levels with 11 prime residential possessions and 14 Buy to Let
(BTL) possessions at 30 June 2013 compared to 5 and 17,
respectively, at the end of 2012.
The Society saw an increase in the number of commercial loans
where a Law of Property Act 1925 (LPA) receiver had been appointed
from 4 to 5 due to another lender appointing an administrator to
the company that holds the Society's security property. There were
3 BTL exposures where an LPA receiver was appointed.
The Society's prime residential mortgage book increased by
GBP45m during the first half of 2013 with legacy mortgage books
reducing by GBP37m. Gross and net prime residential mortgage
lending volumes were up significantly in the first half of 2013
compared to the first half of 2012.
Supporting our Members
The Society has continued to help the North East's first time
buyers realise their home owning ambitions with the regular
availability of mortgage products that require just a 5%
deposit.
In the first six months of 2013 we have advanced loans to the
same number of first time buyers as we did throughout the entire 12
month period of 2012. We also have a target of doubling 2012's
gross lending by the end of this year. In addition, our Big Home
Saver product - which encourages borrowers to save for a deposit -
has attracted more than 5,000 new customers this year.
It was great to be awarded the UK's best mortgage lender for
first-time buyers by Moneywise Mortgage Awards; to receive such
acknowledgement against strong market competition is a great
achievement for all the staff involved in the mortgage process.
Our charity-linked savings products, in support of the
North-East charity the Sir Bobby Robson Foundation, reached a
fantastic milestone in 2013 with payments to the charity of
GBP300,000. This money will be used to support essential investment
in cancer research.
Our financial advisory service in the new post-RDR regime has
been very well received; initial research has delivered good
feedback from customers with overall satisfaction at 92%.
Supporting our Staff
We have continued with the rollout of our values programme,
which has been well-received by staff. In addition, our Staff To
Achieve Recognition (S.T.A.R) awards have entered the second year
with staff being rewarded for special achievements in the
workplace.
As a Society, we are celebrating our 150(th) anniversary this
year; this included a special event for staff at a historical north
east landmark, held as a thank you for their support and loyalty
over the years. As well as this we also launched a special
'Celebration Bond' for our members as part of this special
celebration.
The Society continues to invest in the training and development
of staff and it is pleasing that we continue to see year on year
improvement in employee satisfaction.
Supporting our Communities
We have commenced the third year of our Cornerstone in the
Community initiative. This involves our branch network engaging
with the local communities in which they operate through a range of
support activities, including volunteering, fundraising, a
school-engagement programme, branch activities and an award
ceremony. The initiative has grown since last year and so far we
have engaged with more than 650 school children as part of a
financial education programme called the Boardroom Charity
Challenge. As well as this, we have celebrated local heroes at an
award ceremony held to reward those doing good within the local
communities. We have several more ceremonies planned and many more
fundraising events in the community to support throughout the rest
of this year.
We said goodbye to one Charity of the Year, Help for Heroes,
after staff raised more than GBP24,000 through a range of dress
down days, cake sales and much more; we then welcomed our new
charity of the year, The Alzheimer's Society. Our corporate Charity
of the Year initiative has ran for more than five years and it is
something we're very proud of having raised more than GBP100,000
for five good causes within our region.
I am very pleased with our continued progress this year. This is
down to the dedicated efforts of our executive team and staff and I
would like to thank them for their loyalty and hard work, without
which the progress would not have been achieved.
Jim Willens
Chief Executive
30(th) July 2013
Forward-looking statements
Certain statements in this half-yearly information are
forward-looking. These statements are made in good faith based on
the information available up to the time of approval of this report
and such statements should be treated with caution due to the
inherent uncertainties, including both economic and business risk
factors, underlying any such forward-looking information. Therefore
actual results may differ materially from those expressed or
implied by these forward-looking statements. The directors
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 30 Jun 31 Dec
13 12 12
GBPm GBPm GBPm
Interest and similar income 50.3 56.5 111.0
Interest expense and similar charges (38.4) (47.5) (90.4)
---------- ---------- ----------
Net interest receivable 11.9 9.0 20.6
Other income and charges 12.6 13.8 27.9
Loss on revaluation of investment
properties held for sale (0.8) (0.1) (1.0)
Total operating income 23.7 22.7 47.5
Administrative expenses (16.7) (17.0) (34.5)
Depreciation (1.2) (1.4) (2.6)
---------- ---------- ----------
Operating profit before impairments,
provisions and exceptional items 5.8 4.3 10.4
Impairment charge on loans and advances
to customers (3.9) (3.2) (8.3)
FSCS levy (1.1) (0.8) (2.1)
Other provisions for liabilities and
charges - 0.2 0.7
Gain on disposal of Prepaid Cards
Business - - 0.8
---------- ---------- ----------
Profit before taxation 0.8 0.5 1.5
Taxation expense (0.4) (0.2) (1.5)
---------- ---------- ----------
Result after taxation for the financial
period 0.4 0.3 -
---------- ---------- ----------
The notes on pages 9 to 12 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
13 30 Jun 12 31 Dec 12
GBPm GBPm GBPm
Result for the period 0.4 0.3 -
Other comprehensive (expense)/income
Items that may be reclassified to income
statement
Movement on available for sale reserve (5.0) 4.9 6.8
Income tax on items that may be reclassified
to income statement 1.2 (1.2) (1.6)
---------- ---------- ----------
Total items that may be reclassified to
income statement (3.8) 3.7 5.2
---------- ---------- ----------
Items that will not be reclassified to
income statement
Actuarial loss on retirement benefit obligations - - (6.7)
Income tax on items that will not be reclassified
to income statement - - 1.5
---------- ---------- ----------
Total items that will not be reclassified
to income statement (5.2)
Total comprehensive (expense)/income for
the period (3.4) 4.0 -
---------- ---------- ----------
The notes on pages 9 to 12 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 13 30 Jun 12 31 Dec 12
GBPm GBPm GBPm
ASSETS
Liquid assets 906.8 1,137.4 1,114.1
Derivative financial instruments 24.6 43.5 38.1
Loans and advances to customers 2,735.7 2,846.9 2,727.6
Fair value adjustments for hedged
risk 31.0 62.0 40.0
Assets pledged as collateral 66.2 25.0 54.0
Property, plant and equipment 22.1 23.1 23.0
Investment properties held for sale 10.7 15.7 14.0
Other assets 35.9 32.0 29.3
---------- ---------- ----------
TOTAL ASSETS 3,833.0 4,185.6 4,040.1
---------- ---------- ----------
Unaudited Unaudited Audited
30 Jun 13 30 Jun 12 31 Dec 12
GBPm GBPm GBPm
LIABILITIES
Shares 3,298.4 3,598.5 3,445.4
Fair value adjustments for hedged
risk 4.5 26.4 17.5
Deposits and debt securities 218.7 204.3 246.0
Derivative financial instruments 30.2 60.9 40.0
Other liabilities 23.8 30.9 30.5
Subordinated liabilities 59.0 58.8 58.9
Subscribed capital 29.7 29.7 29.7
Reserves 168.7 176.1 172.1
---------- ---------- ----------
TOTAL LIABILITIES 3,833.0 4,185.6 4,040.1
---------- ---------- ----------
The notes on pages 9 to 12 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 2013 (unaudited)
Available
General for sale
reserve reserve Total
GBPm GBPm GBPm
At 1 January 2013 165.8 6.3 172.1
Movement in the period 0.4 (3.8) (3.4)
At 30 June 2013 166.2 2.5 168.7
---------- ----------- ------
For the 6 months ended 30 June 2012 (unaudited)
Available
General for sale
reserve reserve Total
GBPm GBPm GBPm
At 1 January 2012 171.0 1.1 172.1
Movement in the period 0.3 3.7 4.0
At 30 June 2012 171.3 4.8 176.1
---------- ----------- ------
For the year ended 31 December 2012 (audited)
Available
General for sale
reserve reserve Total
GBPm GBPm GBPm
At 1 January 2012 171.0 1.1 172.1
Movement in the year (5.2) 5.2 -
At 31 December 2012 165.8 6.3 172.1
---------- ----------- ------
The notes on pages 9 to 12 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
31 Dec
30 Jun 13 30 Jun 12 12
GBPm GBPm GBPm
Net cash flows from operating activities (168.5) (94.3) (71.3)
Payment into defined benefit pension
scheme - - (2.1)
Net cash flows from investing activities 92.3 215.0 229.8
Net cash flows from financing activities (3.5) (3.0) (6.4)
---------- ---------- ----------
Net (decrease)/increase in cash and
cash equivalents (79.7) 117.7 150.0
---------- ---------- ----------
Cash and cash equivalents at the start
of period 528.0 378.0 378.0
---------- ---------- ----------
Cash and cash equivalents at the end
of the period 448.3 495.7 528.0
---------- ---------- ----------
Other percentages
Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
30 Jun 31 Dec
30 Jun 13 12 12
% % %
Gross capital as a percentage of shares
and borrowings 7.3 6.9 7.1
Liquid assets as a percentage of shares
and borrowings 25.8 29.9 30.2
Wholesale deposits as a % of shares
and borrowings 6.2 5.4 6.7
Net interest receivable as a % of
mean total assets 0.59 0.42 0.47
Cost to income ratio 75.6 81.5 77.0
Profit after tax as a % of mean total
assets 0.02 0.01 -
Management expenses as a % of mean
total assets* 0.92 0.86 0.88
Core Tier 1 11.1 10.5 10.7
Tier 1 13.1 12.3 12.6
Solvency 16.9 15.9 16.4
* Expressed on an annualised basis
The notes on pages 9 to 12 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 30(th) July 2013, 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
2012 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 2013 and the 6 months to 30 June 2012 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
The condensed consolidated half-yearly financial information for
the half-year ended 30 June 2013 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 2012, 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 2012.
The Group's forecasts and projections, including multiple-scenario
stress testing and sensitivity analysis, show 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 information.
3. Accounting policies
The half-yearly financial information has been prepared on the
basis of the accounting policies adopted for the year ended 31
December 2012, as described in those financial statements.
There have been no new standards, or amendments to standards,
which have been adopted, published or issued in exposure draft
since the signing of the Annual Report and Accounts, which would
have a material impact on the Group.
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 (predominantly 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 information does
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 2012.
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 46% (first half 2012 - 45%). 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, and to current tax for changes in the enacted
corporation tax rate. Further changes to the enacted tax rate
subsequent to the period end are expected to 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.
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 2013 Member Solutions
Business Business Total
GBPm GBPm GBPm
Net interest receivable 11.9 - 11.9
Other income and charges 4.8 7.8 12.6
Loss on revaluation of investment properties
held for sale (0.8) - (0.8)
Administrative expenses (12.6) (4.1) (16.7)
Depreciation (0.9) (0.3) (1.2)
--------- ---------- -------
Operating profit before impairments and
provisions 2.4 3.4 5.8
Impairment charges and provisions for liabilities
and charges (4.1) 0.2 (3.9)
FSCS levy (1.1) - (1.1)
(Loss)/profit for the period before taxation (2.8) 3.6 0.8
Taxation expense (0.4)
-------
Profit after taxation for the financial
period 0.4
-------
6 months to 30 June 2012 Member Solutions
Business Business Total
GBPm GBPm GBPm
Net interest receivable 9.0 - 9.0
Other income and charges 6.0 7.8 13.8
Loss on revaluation of investment properties
held for sale (0.1) - (0.1)
Administrative expenses (12.5) (4.5) (17.0)
Depreciation (1.0) (0.4) (1.4)
--------- ---------- -------
Operating profit before impairments and
provisions 1.4 2.9 4.3
Impairment charges and provisions for liabilities
and charges (3.0) - (3.0)
FSCS levy (0.8) - (0.8)
(Loss)/profit for the period before taxation (2.4) 2.9 0.5
Taxation expense (0.2)
-------
Profit after taxation for the financial
period 0.3
-------
Year to 31 December 2012 Member Solutions
Business Business Total
GBPm GBPm GBPm
Net interest receivable 20.6 - 20.6
Other income and charges 11.7 16.2 27.9
Loss on revaluation of investment properties
held for sale (1.0) - (1.0)
Administrative expenses (25.6) (8.9) (34.5)
Depreciation (2.0) (0.6) (2.6)
--------- ---------- -------
Operating profit before impairments and
provisions 3.7 6.7 10.4
Impairment charges and provisions for liabilities
and charges (8.4) 0.8 (7.6)
FSCS levy (2.1) - (2.1)
Exceptional items - 0.8 0.8
(Loss)/profit for the period before taxation (6.8) 8.3 1.5
Taxation expense (1.5)
-------
Result after taxation for the financial
period -
-------
8. Fair value measurement
The following table summarises the fair value measurement basis
used for assets and liabilities held on the Balance Sheet at fair
value.
Level Level Level Total
1 2 3 GBPm
GBPm GBPm GBPm
Financial assets
Debt securities - available for
sale 519.6 - - 519.6
Derivative financial instruments - 24.6 - 24.6
Investment properties held for
sale - 10.7 - 10.7
Financial liabilities
Derivative financial instruments - 30.2 - 30.2
Level 1: Quoted prices (unadjusted) in active markets for
identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1
that are observable for the asset or liability either directly
(i.e. as price) or indirectly (i.e. derived from prices).
Level 3: Inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
These definitions have been taken from the March 2009 amendment
to IFRS 7 'Improving Disclosures about Financial Instruments'.
There were no transfers between levels in the period.
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 true and fair
review of the information required by the Disclosure and
Transparency Rules (DTR 4.2.4, DTR 4.2.7 and DTR 4.2.8).
The Society's Home Member State is the United Kingdom.
The directors of Newcastle Building Society are listed in the
Annual Report for 2012. During the period the only changes to the
Board were the resignation of Gillian Tiplady on 11(th) April 2013
and the retirement of David Holborn on 24(th) April 2013.
On behalf of the Board
Jim Willens
Chief Executive
30(th) July 2013
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 2013, which comprises the Summary
Consolidated Income Statement, the Summary Consolidated Statement
of Comprehensive Income, the Summary Consolidated Balance Sheet,
the Summary Consolidated Statement of Movements 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 Conduct Authority.
As disclosed in Note 2, 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
Conduct 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 2013 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 Conduct Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
30(th) July 2013
Newcastle upon Tyne
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
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