TIDMNBSR
RNS Number : 3573F
Newcastle Building Society
27 July 2016
Announcement of half-year results for the six months ended 30
June 2016
Key Highlights
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* Profit before tax of GBP3.5m for the six months ended
30 June 2016 compared to GBP1.5m for the same period
in 2015
* Operating profit before impairment charges and FSCS
levy unchanged at GBP6.1m
* GBP10m investment programme launched - new branch and
financial advice centres opened in Newcastle city
centre and new flagship branch opened in Gateshead
* Gross residential mortgage lending increased to
GBP255m from GBP148m and net lending improved from
GBP2m to GBP116m in the first half of 2016 compared
to the same period in 2015
* The percentage of mortgages in arrears by 3 months or
more continued at a very low level of 0.47% compared
to 0.51% at the same point last year; well below
industry averages
* Capital ratios are robust with Total Capital Ratio
(Solvency) at 18.2%, Tier 1 Ratio at 15.1%, Common
Equity Tier 1 Ratio at 13.7% and Leverage Ratio at
4.9%
* Liquidity as a percentage of shares, deposits and
liabilities (excluding encumbered assets) was 17.2%
compared to 17.7% at the end of 2015
* Launch of behaviours framework to support staff in
delivering our goals and delivering against our new
customer promise
* Launch of Newcastle Community Saver accounts to help
support longer term funding to charities and
communities within the North East
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Chief Executive's Review
We are a straightforward building society from the North East
that puts our customers at the heart of our business, providing a
great range of mortgage and savings products and trusted financial
advice, combined with excellent customer service. This is what we
have been doing for over 150 years and what we will continue to do
in the years ahead. Whilst we have seen a more volatile economic
backdrop over the first half of 2016, which became more pronounced
following the vote to leave the European Union, this won't impact
our commitment to providing our customers with the products,
services and advice they need. It is at times like this that
customers want to know that their money is safe, they can get a
mortgage to buy a home, and that advice is available to help them
navigate the stormy seas.
It is against this background that I am pleased to report
another period of solid financial performance for the Society, with
increased profits, strong capital ratios, robust liquidity
position, higher lending volumes and record low levels of arrears
reflecting the excellent credit quality of our residential mortgage
book.
As a customer owned business, we need to make sufficient profits
to grow and invest for the future, while maintaining strong capital
ratios. I am particularly pleased that we have been able to
increase profitability at a time when we are making significant
investment into the business with new financial advice centres, our
reinvigorated branch refurbishment programme, developing our
people, enhancing the resilience of our systems and, not least,
focusing on the provision of first class service to our
customers.
Profitability
Profit before tax was GBP3.5m for the six months ended 30 June
2016 compared to GBP1.5m for the first half of 2015. Operating
profit before impairment charges and the annual industry levy for
the Financial Services Compensation Scheme remained at GBP6.1m.
Interest margin remained at 75bp with lower funding costs being
offset by narrower spreads on mortgage lending due to a mortgage
market that remained extremely competitive. Other income and
charges increased from GBP10.9m to GBP13.1m due mainly to increased
income from the Newcastle Strategic Solutions business. Management
expenses increased by GBP2m from GBP18.2m to GBP20.2m reflecting
the growth in the headcount to support growing areas of the
business, particularly mortgage lending and the Solutions business.
Our increased capital investment programme has resulted in a higher
charge for depreciation, however this will create benefits to the
business in the longer term. We have seen an increase in staff
related costs, particularly training and development, recruitment
and HR project costs. Another area of growth has been within
information technology where we have invested heavily in projects
to enhance our infrastructure and resilience, whilst at the same
time expanding our IT development team as we develop our in-house
systems to keep pace with digital and regulatory changes. As a
result of this investment the cost to income ratio increased from
75.2% to 76.9%, which was in line with expectations of an increase
in the short term.
The pipeline for the Newcastle Strategic Solutions business
continues to be strong. The Solutions business delivers a
diversified income stream, taking one of our core competencies in
savings management and providing it in the form of a comprehensive
outsourced service to other financial institutions. All of the
profits from the Solutions business are ploughed back in to the
Society and support increased investment in services for members as
well as providing capital to support and grow the business.
Mortgage impairment charges reduced from GBP2.7m to GBP1.8m,
with the majority of provisions continuing to relate to lending
secured on commercial property. We expect the level of commercial
provisions to continue to fall as the book is now below GBP100m and
is expected to fall further by the end of the year.
The charge for the Financial Services Compensation Scheme levy
reduced from GBP1.9m to GBP0.8m reflecting a lower overall expected
levy in 2016 following the announcement that there will be no levy
for capital shortfalls in relation to failed banks this year.
Capital
The Total Capital Ratio (Solvency) increased to 18.2% from 18.1%
at the same time last year but was down compared to 31 December
2015 level of 18.7%; this reduction being due to the amortisation
of Tier 2 capital as it approaches maturity. Tier 1 ratio improved
from 14.5% to 15.1% over the same period. Common Equity Tier 1
ratio improved from 12.8% to 13.7%. The Society's Basel III
leverage ratio (transitional basis) was 4.9% compared to 5.3% at 30
June 2015, the reduction being due to a larger balance sheet size.
Capital ratios include half year retained profits.
Liquidity
Liquid assets as a percentage of Shares, Deposits and
Liabilities at 30 June 2016 was 25.9% compared to 24.3% at the end
of 2015. Excluding encumbered liquid assets the ratio fell from
17.7% to 17.2% at 30 June 2016. The quality of liquidity continues
to be excellent, comprising assets that can be used to generate
funding through treasury markets (repo) or via the various Bank of
England liquidity schemes.
Credit Risk
The percentage of mortgages in arrears by 3 months or more
continued at a level lower than the UK average, at 0.47% compared
to 0.51% at the half year last year, and 0.49% at 31 December 2015.
Within this figure the percentage of residential borrowers in
arrears of 3 months or more was 0.45% at 30 June 2016 compared to
0.48% at the same period last year and 0.47% at the end of 2015.
Possession cases continued at very low levels. The low levels of
arrears and possessions reflect the excellent credit quality of the
Society's residential lending.
The Society's prime residential mortgage book increased by
GBP116m during the first half of 2016 (GBP2m first half 2015) with
this being offset by a reduction in legacy mortgage books of GBP54m
(GBP88m first half 2015). The increase in prime residential lending
was due mainly to a 70% increase in gross lending to individuals
from GBP148m to GBP255m with redemptions being slightly lower and
capital repayments being slightly higher.
Supporting Customers
We have a great range of mortgage products for customers which
we have expanded to include a new range of products tailored for
customers who are either self-employed or require a larger loan
size. Our first time buyer lending has been very successful in the
first half of 2016 with consistent good value products up to 95%
Loan to Value ("LTV") for those customers taking their first step
onto the property ladder. Our buy to let and self-build mortgage
products have also been well received by brokers and customers and
have contributed to strong lending volumes in the first half of the
year. We pride ourselves on having mortgage products to suit a wide
range of house buyers, from 2 to 10 year fixed rates, variable and
discounted rates, and fee free products. We also have a range of
retention products available on maturity for loyal customers.
Our 'Home Saver' products have been popular with customers
looking to save for a home where they can participate in the
Government's Help to Buy scheme and also take the Society's First
Home Saver account, both available through our innovative
'CustomISA' facility. CustomISA allows customers to combine tax
free saving into a Help to Buy ISA and a First Home Saver ISA at
the same time, taking advantage of the bonuses offered on both
products when the customer buys their home.
With savings rates at an all time low we believe it is important
to provide a broad range of savings products to customers,
including bonds, regular savings accounts, loyalty products and of
course provide advice where customers want to understand investment
options outside of a regular savings account.
Our financial advice subsidiary, Newcastle Financial Services
Limited, gives customers financial advice regardless of how much
they have to invest. We know our customers really value this
face-to-face service as this area of the business scores very
highly in customer satisfaction (currently at 99%), and experiences
high repeat levels of business. We have made further investment
into our financial advice proposition this year with the launch of
two new advice centres in our branches in the heart of Newcastle
city centre, and we have grown the number of financial advisors we
have available to help customers navigate a route through the
challenging market turmoil.
We launched a new branch at our head office in Newcastle city
centre in May and a flagship branch in Gateshead in July;
demonstrating our long term commitment to the branch network and
maintaining a strong presence across the region. Our programme of
investment was announced in January, coinciding with the re-opening
of our newly refurbished branch in North Shields, and will continue
through the year. We are particularly excited about the impending
launch of a new branch in Yarm which is being progressed through an
innovative partnership with Stockton Borough Council and will be
located in the newly refurbished Yarm library.
We continue to put the customer at the heart of our business as
we believe this is what being a mutual building society is about.
Our focus on customers is reinforced with the appointment of a new
customer director, Damian Thompson, who joins the Society in August
2016, with a wealth of experience of developing services and
products for customers within the building society sector.
Supporting our Staff
Our focus on being a leading employer in the region means we
continually search for ways to make the Society an even better
place to work. We have continued our investment into the
recruitment and development of staff across the business. Alongside
the introduction of an online recruitment management platform, we
have introduced a framework of behaviours to help us achieve our
vision, our goals and to underline and support our customer focused
culture, including a new customer promise. We have continued to
invest in our 'Ocademy' programme, working with our partner,
Openwork, to develop new advisors for Newcastle Financial Services.
The first candidates are expected to graduate this year and we
continue to recruit new members of staff on to the scheme. In line
with our promised commitment at the start of the year, we are over
half way to our target of creating 100 new jobs to support our
growth plans.
Supporting our Communities
We have continued to support the North East based cancer
charity, the Sir Bobby Robson Foundation through our charity-linked
savings accounts, and this year reached an impressive GBP1.8m in
donations since the fund first started.
Following the success of this approach we recently launched new
Community Saver accounts. These accounts offer competitive interest
rates, and generate a Society donation to the Newcastle Building
Society Community Fund in association with the Community
Foundation. This fund will provide grants to good causes across our
North East branch network. Causes will be nominated by our
customers, enabling us to directly support our customers'
communities.
Our financial education programme for schools is in its sixth
year and to date has delivered lessons to improve financial
capability to more than 2,000 primary school children. The
culmination of the programme is the Boardroom Charity Challenge
which asks young participants to develop business ideas that will
benefit their local community while making a profit. A Gateshead
Primary School won this year's GBP1,000 prize.
The Society's wider financial education commitment has so far
this year seen it provide more than 38 free information talks to
Society members and others who want to learn more about their
financial position and how to plan for their future.
Our staff volunteering policy, allows time off during the
working week to support a range of charities based in our local
communities. From archaeology digs at Hadrian's Wall, to scrubbing
and painting school fences, members of staff have made themselves
available to lend a hand and make a difference.
Staff have been supporting the Percy Hedley Foundation as our
corporate charity over the last two years and we are very proud
that over GBP20,000 has been raised through a wide variety of fund
raising activities. Percy Hedley Foundation supports young children
and adults with physical and mental impairments.
We were thrilled to receive recognition for our commitment to
our communities at the North East Business Awards, where we won the
"Heart of the Community" Award.
I am pleased with the Society's results for the first half of
the year. We will continue to invest in the business to develop our
proposition for members and continue to provide excellent customer
service. In the second half we will be focusing very closely on
delivering our investment programme and supporting our customers
and members through these changing and uncertain times.
Andrew Haigh
Chief Executive
26(th) July 2016
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
30 Jun 16 30 Jun 15 31 Dec 15
GBPm GBPm GBPm
Interest and similar income 36.1 39.9 78.0
Interest expense and similar charges (22.9) (26.5) (50.9)
---------- ---------- ----------
Net interest receivable 13.2 13.4 27.1
Other income and charges 13.1 10.9 23.0
Total operating income 26.3 24.3 50.1
Administrative expenses (19.1) (17.2) (36.1)
Depreciation (1.1) (1.0) (2.1)
---------- ---------- ----------
Operating profit before impairments and provisions 6.1 6.1 11.9
Impairment charges on loans and advances to customers (1.8) (2.7) (4.6)
FSCS levy (0.8) (1.9) (1.9)
---------- ---------- ----------
Profit before taxation 3.5 1.5 5.4
Taxation expense (0.7) (0.4) (2.1)
---------- ---------- ----------
Profit after taxation for the financial period 2.8 1.1 3.3
---------- ---------- ----------
The Notes on pages 10 and 11 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
30 Jun 16 30 Jun 15 31 Dec 15
GBPm GBPm GBPm
Profit for the period 2.8 1.1 3.3
Other comprehensive (expense)/income
Items that may be reclassified to income statement
Movement on available for sale reserve (0.5) (0.7) (0.8)
Income tax on items that may be reclassified to income statement 0.1 0.1 0.2
---------- ---------- ----------
Total items that may be reclassified to income statement (0.4) (0.6) (0.6)
---------- ---------- ----------
Items that will not be reclassified to income statement
Actuarial re-measurements on retirement benefit obligations - - 0.4
Income tax on items that will not be reclassified to income statement - - (0.1)
---------- ---------- ----------
Total items that will not be reclassified to income statement - - 0.3
Total other comprehensive expense (0.4) (0.6) (0.3)
---------- ---------- ----------
Total comprehensive income for the financial period 2.4 0.5 3.0
---------- ---------- ----------
The Notes on pages 10 and 11 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 16 30 Jun 15 31 Dec 15
GBPm GBPm GBPm
ASSETS
Liquid assets 810.9 733.2 726.0
Derivative financial instruments 10.5 9.5 7.3
Loans and advances to customers 2,547.4 2,577.5 2,478.6
Fair value adjustments for hedged risk 274.5 174.1 190.8
Property, plant and equipment 23.1 23.0 23.4
Other assets 19.2 20.2 19.4
---------- ---------- ----------
TOTAL ASSETS 3,685.6 3,537.5 3,445.5
---------- ---------- ----------
Unaudited Unaudited Audited
30 Jun 16 30 Jun 15 31 Dec 15
GBPm GBPm GBPm
LIABILITIES
Shares 2,730.6 2,853.5 2,678.8
Fair value adjustments for hedged risk 8.4 6.3 5.3
Deposits and debt securities 405.0 228.9 307.1
Derivative financial instruments 274.3 174.4 190.4
Other liabilities 15.7 18.2 14.7
Subordinated liabilities 50.0 59.5 50.0
Subscribed capital 30.0 30.0 30.0
Reserves 171.6 166.7 169.2
---------- ---------- ----------
TOTAL LIABILITIES 3,685.6 3,537.5 3,445.5
---------- ---------- ----------
The Notes on pages 10 and 11 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 2016 (unaudited)
Available
General reserve for sale reserve Total
GBPm GBPm GBPm
At 1 January 2016 169.7 (0.5) 169.2
Movement in the period 2.8 (0.4) 2.4
At 30 June 2016 172.5 (0.9) 171.6
---------------- ------------------ -------
For the 6 months ended 30 June 2015 (unaudited)
Available
General reserve for sale reserve Total
GBPm GBPm GBPm
At 1 January 2015 166.1 0.1 166.2
Movement in the period 1.1 (0.6) 0.5
At 30 June 2015 167.2 (0.5) 166.7
---------------- ------------------ -------
For the year ended 31 December 2015 (audited)
Available
General reserve for sale reserve Total
GBPm GBPm GBPm
At 1 January 2015 166.1 0.1 166.2
Movement in the year 3.6 (0.6) 3.0
At 31 December 2015 169.7 (0.5) 169.2
---------------- ------------------ -------
The Notes on pages 10 and 11 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
to to 12 months
30 Jun 16 30 Jun 15 31 Dec 15
GBPm GBPm GBPm
Net cash flows from operating activities 12.7 (77.7) (61.6)
Payment into defined benefit pension
scheme (0.9) (0.9) (2.0)
Net cash flows from investing activities 19.4 (46.0) (48.8)
Net cash flows from financing activities (3.1) (3.4) (16.2)
---------- ---------- ----------
Net increase/(decrease) in cash and
cash equivalents 28.1 (128.0) 128.6
---------- ---------- ----------
Cash and cash equivalents at the start
of period 186.5 514.4 315.1
---------- ---------- ----------
Cash and cash equivalents at the end
of the period 214.6 386.4 186.5
---------- ---------- ----------
Other percentages
Unaudited Unaudited Audited
6 months 6 months 12 months
30 Jun 16 30 Jun 15 31 Dec 15
% % %
Gross capital as a % of shares and borrowings 8.0 8.3 8.3
Liquid assets as a % of shares and borrowings 25.9 23.8 24.3
Wholesale deposits as a % of shares and borrowings 12.9 7.4 10.3
Liquid assets as a % of shares and borrowings excluding encumbered assets 17.2 18.1 17.7
Net interest receivable as a % of mean total assets 0.75 0.75 0.75
Cost to income ratio 76.9 75.2 76.0
Profit after tax as a % of mean total assets 0.16 0.06 0.09
Management expenses as a % of mean total assets* 1.14 1.01 1.06
Common Equity Tier 1 Ratio 13.7 12.8 13.6
Tier 1 Ratio 15.1 14.5 15.3
Total Capital Ratio (Solvency) 18.2 18.1 18.7
Leverage Ratio (Basel III - end point) 4.5 4.7 4.9
Leverage Ratio (Basel III - transitional) 4.9 5.3 5.6
* Expressed on an annualised basis
The Notes on pages 10 and 11 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 2016, 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
2015 has been extracted from the accounts for that year, and on
which the auditors gave an unqualified opinion, and which have been
filed with the Financial Conduct Authority and Prudential
Regulation Authority.
1.3. The half-yearly financial information for the 6 months to
30 June 2016 and the 6 months to 30 June 2015 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 2016 has been prepared in accordance
with the Disclosure and Transparency Rules of the Financial Conduct
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 2015, which have been prepared in accordance
with IFRSs as adopted by the European Union.
The Board has reviewed medium and long term plans over a 5 year
horizon with particular emphasis on examining forecast capital,
profitability and liquidity of the Group and the risks to those
forecasts through a variety of stress testing scenarios. This
horizon is considered appropriate through alignment to the Group's
usual forecasting and management reporting allowing robust and
continuous assessment of the Group's expected position and
principal risks over the time-frame. Active risk management is
undertaken to mitigate the Group's principal risks as detailed in
note 4 of this half-yearly financial information.
The outcome of this review is that the Directors are satisfied
that the Society and the Group have adequate resources to continue
in business and meet its liabilities throughout the period of
assessment.
Accordingly the financial statements of the Group have been
prepared on a going concern basis with no material uncertainties
that the going concern basis of accounting is appropriate.
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 2015, as described in those financial statements.
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 2015.
There have been no major changes in the risk management
departments since year end or in any risk management policies or
procedures.
NEWCASTLE BUILDING SOCIETY GROUP
HALF-YEARLY FINANCIAL INFORMATION
5. Taxation
The effective tax rate is 20% (first half 2015 - 23%). 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.
6. Related Party Transactions
During the 6 months to 30 June 2016 the Society purchased
GBP6.4m of Business Support Services from Newcastle Strategic
Solutions Limited (NSSL) and GBP2.0m Managed IT and Property
Services from Newcastle Systems Management Limited (NSML), both
wholly owned subsidiary companies. The Society received GBP2.1m
from NSSL and GBP0.5m from NSML for the provision of financial and
administrative services during the same period. There were no
comparable intra-group transactions during the 6 months to June
2015. For further detail see Note 29 of the Newcastle Building
Society Annual Report and Accounts 2015.
7. 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 324.8 - - 324.8
Derivative financial instruments - 10.5 - 10.5
Fair value adjustments for hedged
risk on underlying instruments - 274.5 - 274.5
Financial liabilities
Derivative financial instruments - 274.3 - 274.3
Fair value adjustments for hedged
risk on underlying instruments - 8.4 - 8.4
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 13 'Improving Disclosures: 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 2015. There were no other changes to the Board in
the period except as already disclosed in the 2015 Annual
Report.
On behalf of the Board
Andrew Haigh
Chief Executive
26(th) July 2016
NEWCASTLE BUILDING SOCIETY GROUP
HALF-YEARLY FINANCIAL INFORMATION
Independent review report to Newcastle Building Society
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed the condensed consolidated interim financial
statements, defined below, in the Announcement of half-year results
of Newcastle Building Society for the six months ended 30 June
2016. Based on our review, nothing has come to our attention that
causes us to believe that the condensed consolidated interim
financial statements are 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.
This conclusion is to be read in the context of what we say in
the remainder of this report.
What we have reviewed
The condensed consolidated interim financial statements, which
are prepared by Newcastle Building Society, comprise:
-- the Summary Consolidated Balance Sheet as at 30 June 2016;
-- the Summary Consolidated Income Statement and Summary
Consolidated Statement of Comprehensive Income for the period then
ended;
-- the Summary Consolidated Cash Flows Statement for the period then ended;
-- the Summary Consolidated Statement of Movements in Members'
Interests for the period then ended; and
-- the explanatory Notes to the condensed consolidated interim financial statements.
As disclosed in Note 2, the financial reporting framework that
has been applied in the preparation of the full annual financial
statements of the Group is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European
Union.
The condensed consolidated interim financial statements included
in the Announcement of half-year results have been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
What a review of condensed consolidated financial statements
involves
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.
We have read the other information contained in the Announcement
of half-year results and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed consolidated interim financial
statements.
Responsibilities for the condensed consolidated interim
financial statements and the review
Our responsibilities and those of the Directors
The Announcement of half-year results, including the condensed
consolidated interim financial statements, is the responsibility
of, and has been approved by, the directors. The directors are
responsible for preparing the Announcement of half-year results in
accordance with the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Our responsibility is to express to the company a conclusion on
the condensed consolidated interim financial statements in the
Announcement of half-year results based on our review. This report,
including the conclusion, has been prepared for and only for the
company for the purpose of complying with the Disclosure and
Transparency Rules of the Financial Conduct Authority and for no
other purpose. We do not, in giving this conclusion, 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.
PricewaterhouseCoopers LLP
Chartered Accountants
26(th) July 2016
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LIFIDDAIDFIR
(END) Dow Jones Newswires
July 27, 2016 03:13 ET (07:13 GMT)
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