TIDMWBS
RNS Number : 7278U
West Bromwich Building Society
26 November 2019
West Bromwich Building Society
Announcement of half-year results for the six months
to 30 September 2019
The West Brom today announces its half-year results for the six
months to 30 September 2019.
Key highlights:
- The average weighted savings rate paid to members was 50% more
than the market average(1) (30 September 2018: 42% above),
delivering a 31% increase in annualised mutual benefit to savers to
GBP13.7m (30 September 2018: GBP10.5m)
- An already strong Net Promoter Score(R)(2) increasing
marginally from +72 at 31 March 2019 to +73, with customer
satisfaction up from 94% to 95%
- GBP251m of new mortgage lending (30 September 2018: GBP466m),
reflecting a deliberate strategy to moderate lending volumes. 43%
of new lending was to first-time buyers (30 September 2018:
38%)
- A 7% increase in profit before tax to GBP6.4m (30 September 2018: GBP6.0m)
- An uplift in the net interest margin to 1.04% (30 September 2018: 1.02%)
- Delivery of cost efficiencies led to the improvement of the
management expense ratio to 0.83% (30 September 2018: 0.88%)
- The Society's Common Equity Tier 1 (CET 1) capital ratio now
stands at 16.2% (31 March 2019: 16.0%)
Jonathan Westhoff, Chief Executive, commented:
The Society has delivered a strong half-year performance,
despite an increasingly competitive mortgage market, delivering a
31% increase in annualised member benefit to its savers. A 7%
increase in pre-tax profit contributed to an increase in the CET 1
ratio, which not only ensures the Society has the necessary capital
to weather any economic challenges that may result from the current
political and Brexit uncertainties but is also able to continue to
deliver on its purpose by continuing to offer real value to savers
and mortgage products that promote home ownership.
Our role in supporting those who aspire to own their home saw
advances to first-time buyers accounting for 43% of our total new
lending during the last six months. We have continued to broaden
our mortgage proposition directed at helping those that find it
challenging to achieve their home ownership ambitions, including
our new range of shared ownership and assisted mortgage
products.
For savers, we continue to offer a range of savings products to
fit a variety of requirements, while paying an average interest
rate some 50% higher than the market average(1) , delivering
GBP13.7m of annualised mutual benefit to savers. We also provide
services for retirement and later life planning and have been
raising awareness about planning for retirement through a series of
clinics hosted by independent financial advisers in our
branches.
Despite the heightened levels of political and economic
uncertainty surrounding Brexit and a forthcoming general election,
the last six months has seen intensified mortgage market pricing
competition, created in part by the ongoing availability of very
low cost funding. Regrettably this has had the unfortunate outcome
of reducing rates available for savers in general and whilst the
Society resisted the pressure to lower its savings rates during the
first half of our financial year, we have reduced some rates in
response to this competitive pressure since the half-year period
ended.
As a modern building society, we have become increasingly
innovative in how we provide our services to members through our
online offering. Over the last six months we have upgraded our
website and launched an online mortgage application tracker service
to enable our new mortgage borrowers and intermediary partners to
view the status and progression of mortgage applications online.
Future developments to expand the Society's online offering are in
progress and will continue to be a significant area of focus for
us, underpinned by ongoing investment in our core technology
platforms to allow greater digital capability and operational
resilience.
We expect no let up in the challenges that currently face us,
whether that is the ever intensifying margin pressure in the
mortgage market, the general economic uncertainty caused by the
unknowns around future global trading relationships and the ever
escalating focus on climate change which will have an impact on the
UK housing stock. Despite these challenges, as a mutual, the West
Brom will continue to progress with the best interests of both its
saving and borrowing members at the heart of decisions made.
(1) Average market rates sourced from Bank of England Bankstats
table A6.1
(2) Net Promoter Score and NPS are trademarks of Satmetrix
Systems, Inc., Bain & Company, Inc., and Fred Reichheld.
ENQUIRIES
The West Brom Press Office - 8848 Communications
01902 907520 or 07772 443367
Jonathan Westhoff - Chief Executive
Ashraf Piranie - Group Finance & Operations Director
West Bromwich Building Society
Condensed consolidated
half-yearly financial information
30 September 2019
Chief Executive's Business Review
A clear strategy to steer through uncertain times
The six months to 30 September have again witnessed the Society
delivering on its purpose by balancing the needs of both its saving
and borrowing members, and continuing to offer real value to savers
and mortgage products that promote home ownership.
Our strategy has remained clear and uncomplicated: to complete
sustainable levels of residential lending, offer a safe and
rewarding home for savings and provide our members with the
benefits of belonging to a secure and efficient building
society.
Despite the uncertainty created by the ongoing challenges of
Brexit and a forthcoming general election, the period has witnessed
an intensification of competition in the mortgage market, driven in
part by the ongoing availability of very low cost funding.
Regrettably this has had the unfortunate outcome of reducing rates
available for savers in general. Although the West Brom resisted
the pressure to lower its savings rates in the 6 months, since the
period end some rates have been reduced in response to this
competitive pressure. Not to have done so would have meant the
Society holding excess, and expensive, funding which ultimately
impacts its members negatively.
A performance that delivers for both savers and borrowers
Financial strength
A 7% increase in profit before tax, to GBP6.4m (30 September
2018: GBP6.0m), has resulted in an increase in the key capital
ratio, Common Equity Tier 1 (CET 1), to 16.2% (31 March 2019:
16.0%). Despite the pressure on net interest margins experienced
the Society's margin improved modestly year on year, to 1.04% (30
September 2018: 1.02%), and our focus on cost efficiency delivered
an improvement in the key cost efficiency measure (the management
expense ratio) in relation to the comparable period, to 0.83% (30
September 2018: 0.88%).
Capital resources
Transitional Transitional
CRD IV Full implementation CRD IV Full implementation
rules of CRD IV rules of CRD IV
30-Sep-19 30-Sep-19 31-Mar-19 31-Mar-19
GBPm GBPm GBPm GBPm
Members' interests and
equity
(excluding Additional
Tier
1) 382.7 382.7 377.3 377.3
Other adjustments(1) (0.4) (28.5) 5.9 (25.5)
----------------------- ------------- ------------------------------- ------------- -------------------------------
Common Equity Tier 1
(CET 1)
capital 382.3 354.2 383.2 351.8
Additional Tier 1
capital 8.9 - 8.9 -
----------------------- ------------- ------------------------------- ------------- -------------------------------
Total Tier 1 capital 391.2 354.2 392.1 351.8
Tier 2 capital(2) 21.6 21.6 21.6 21.6
Total regulatory
capital resources 412.8 375.8 413.7 373.4
----------------------- ------------- ------------------------------- ------------- -------------------------------
Risk weighted assets
(RWA) 2,359.6 2,302.1 2,400.6 2,321.7
Leverage ratio
exposure 5,545.6 5,545.6 5,586.3 5,586.3
----------------------- ------------- ------------------------------- ------------- -------------------------------
Capital ratios % % % %
Common Equity Tier 1
ratio
(as a percentage of
RWA) 16.2 15.4 16.0 15.2
Tier 1 ratio (as a
percentage
of RWA) 16.6 15.4 16.3 15.2
Total capital ratio
(as a percentage
of RWA) 17.5 16.3 17.2 16.1
Leverage ratio 7.1 6.4 7.0 6.3
----------------------- ------------- ------------------------------- ------------- -------------------------------
1 Other adjustments mainly relate to intangible assets, deferred
tax and IFRS 9 transitional relief.
2 Tier 2 capital excludes accrued interest.
The statutory impairment charge reduced year on year from
GBP3.7m to GBP0.5m. However, including the impact of positions
taken to hedge the commercial lending exposure against the risk of
interest rate increases, the cost of credit risk increased by
GBP1.3m, from GBP2.9m to GBP4.2m, driven by the ongoing challenges
facing the commercial real estate sector, primarily retailers. In
addition, a provision of GBP0.7m was set aside, mainly to cover the
potential cost of redress following the late surge in PPI claims as
the August deadline for making a claim approached.
The movements in the cost of credit risk and PPI provisions were
more than offset by the benefit of an 8% (GBP2.0m) reduction in
administration costs including depreciation, and a GBP1.0m increase
in the valuation gains relating to the Society's investment
property portfolio. This portfolio consists of 870 rental
properties, mainly based in the South West and South Wales, with
tenants benefiting from our mutual values which drive the approach
we take to delivering fair-priced, good quality residential
housing. Occupancy levels are consistently near to 100%.
This financial performance has also allowed the Society to meet
its forecast distribution policy as announced in the Liability
Management Exercise of April 2018. A distribution of GBP0.50 per
core capital deferred share (CCDS) will be made in February
2020.
Balancing members' interests
As referred to above, the mortgage market competition has
continued to intensify. As an example, the average market fixed
mortgage rate on new business offered at the start of the period
was 2.11%(1) . By September a comparable product was 2.01%. The
Society has responded to this margin pressure, whilst maintaining
savers' rates significantly above the market average. Indeed savers
received, on average, rates some 50%(2) above the market average
during the 6 months to 30 September, an improvement on the premium
offered in the comparable period in 2018 of 42%. On an annualised
basis, this represents a very considerable GBP13.7m (30 September
2018: GBP10.5m) distributed to our savings members.
However, a consequence of the competition in the mortgage market
is a materially lower volume of lending for the period. In the six
months, GBP251m of new mortgages were advanced, compared with
GBP466m in the same period in 2018, albeit this was higher than the
second six months of the financial year to 31 March 2019 of
GBP225m. A key driver for this reduction was our belief that, at
times, the pricing in the market for some lending types had reduced
to an extent where the potential costs of the risks of bad debts
were not sufficiently covered. It is in these circumstances where a
mutual has a clear responsibility to its members not to lend and
risk depleting capital.
We have maintained our focus on providing a broader mortgage
proposition that reflects the changing needs of society. Our new
range of shared ownership products has proved a popular addition,
supporting borrowers looking for a modern route into homeownership.
This extension, along with our wider product proposition, evidences
our continued support to first-time buyers, who have accounted for
43% of all lending during the first six months.
(1) Average market rates sourced from UK Finance table IR5M
(2) Average market rates sourced from Bank of England Bankstats
table A6.1
Responsible lending and managing legacy exposures
In the 6 months to 30 September, our exposure to the legacy
loans to the commercial real estate sector, excluding those loans
that are subject to securitisation, reduced only modestly to
GBP406.7m (31 March 2019: GBP411.9m). The provisions coverage for
potential losses against this exposure, however, increased to 16.1%
(31 March 2019: 15.7%).
Our residential lending exposure remains very low risk. Cases in
arrears by 3 months or more were just 0.31% on our core owner
occupied loans (31 March 2019: 0.36%) and 0.15% on our buy to let
loans (31 March 2019: 0.12%). These compare favourably with
industry UK Finance averages, for arrears of greater than 3 months,
of 0.81% and 0.37% respectively.
A safe, stable funding base
The vast majority of the funding the Society uses to meet the
requirements of borrowing members is provided by its savers,
broadly unchanged over the period at 79%. Within this branch based
balances increased marginally as a proportion of savings balances,
to 71% (31 March 2019: 69%).
In order to provide security of access for savers to their
savings, the Society ensures it maintains liquid resources to meet
this need, even in the event of a stress event, for example should
there be an unexpected reaction to a 'no deal' Brexit. Given the
proximity of our last financial year end to such a risk, we held
nearly double the regulatory requirement (referred to as the
Liquidity Coverage Ratio, or LCR), at 195%. Given the cost to
members of holding excess liquidity, we manage this carefully, and
as at the half year we reduced the coverage to 158%, still very
substantially above the assessed requirement.
Strong member advocacy and engagement
We pride ourselves on providing a consistent level of
outstanding service irrespective of how people choose to interact
with us. Our Net Promotor Score(3) (a key indicator of how likely
our members are to recommend us to others) increased to +73, from
+72 at the previous financial year end. This compares with a
financial services industry average of +50(4) .
As well as the outstanding level of service provided by our
people, reflected in satisfaction survey results of 95% at 30
September 2019, we are becoming increasingly innovative in how we
extend Society services to members through our online offering.
Over the last six months we have upgraded our website and launched
an online mortgage application tracker service that enables both
new mortgage borrowers and intermediary partners to view the status
and progression of mortgage applications online.
Future developments to extend our online offering to improve the
experience of our members and deliver efficiency are in progress,
supported by ongoing investment into a programme of work to improve
and upgrade our technology.
Finally, further meetings were held with our Member and Employee
Councils. Again, the outputs of these engagements proved to be
valuable, informing management's understanding of a diversity of
perspectives on a wide range of topics.
The Society's commitment to the community is a continuing source
of pride to us. This is epitomised by the support provided to our
current chosen charity of the year - the Midlands Air Ambulance
Charity - where we have raised nearly GBP18,000 in the first six
months of the year for this emergency response service. The charity
completes some 2,000 missions each year, many lifesaving, which is
why our fundraising makes an important contribution to this vital
cause.
As well as our fundraising efforts, staff also give their time
to community initiatives through our active volunteering programme.
That comprised almost 400 hours of volunteering for various
regional charities, as well as presentations on financial awareness
to local schools.
(3) Net Promoter Score and NPS are trademarks of Satmetrix
Systems, Inc., Bain & Company, Inc., and Fred Reichheld.
(4) NPS UK average for financial services
www.customergauge.com/benchmarks/industry/financial-services
Principal risks and uncertainties
The Society continues to recognise that effective risk
management is essential to achieving the Society's objectives in an
operating environment where the nature of the threats which prevail
is continually evolving.
Where applicable, this report provides an update on the
principal risks and uncertainties reported on pages 25 to 31 of the
2018/19 Annual Report and Accounts.
Principal risks
In the period, the Society's identified principal risk
categories have remained unchanged. Against the backdrop of ongoing
economic uncertainty, credit risk management has been a key focus
to ensure new loan originations remain in line with Board approved
risk appetite. To aid this further, a project to develop new credit
application scorecards has commenced to support the underwriters in
their decision making process.
The Society's IFRS 9 provisioning and stress testing models
continue to provide informed outputs against a range of
macroeconomic scenarios that supports the ongoing financial
resiliency assessments.
Business conditions and the economic environment
Brexit related uncertainty remains and the potential impact of
this on the economy is closely monitored. Whilst the regulatory
authorities have commented that the UK Banking system could support
the real economy should the UK leave the EU without a transitional
deal in place, the potential range of outcomes for Brexit has
widened. The Society's UK focus should allow it to be protected
from the short-term adverse implications of a problematic Brexit,
but it could be impacted by wider long-term economic changes
affecting house prices, Bank Rate and employment levels. Our
business plans continue to model the impact of a range of scenarios
and stress tests are performed to provide comfort that the Society
can tolerate the consequences of the spectrum of potential
outcomes. In particular, financial projections are reviewed
regularly to identify mitigation actions.
Margin compression
As already outlined, notwithstanding the net interest margin
increasing modestly, the Society has moderated its lending in the
period as the risk adjusted returns on capital thresholds were not
being achieved and, in November, the rates on certain savings
products were reduced. These management actions continue to be
driven by the very low Bank Rate environment, which is now expected
to continue at these levels for a prolonged period and the prospect
of it dropping further continues to increase as evidenced by market
expectations. Indeed, other well established economies, i.e. Japan
and the European Union, already have negative interest rates set by
their central banks. The reducing mortgage rates in the traditional
market will impact the Society's growth opportunities but accepting
this position is the responsible thing to do in this environment to
protect member value.
Technology investment and operational resilience
The Society continues to invest in a programme of strategic
change in its core technology platforms to allow greater digital
capability in both savings and mortgage origination that is
expected to retain significant management involvement through to
2021.
Building on the investment already made in cyber security
infrastructure, the focus on operational resilience has been
heightened in the period to ensure the Society's critical business
services remain readily available to meet members' demands. The
Society remains committed to developing an operational environment
that is strong and resilient, meeting members' and regulatory
expectations.
Strengthening risk management capabilities
Our capability to assess, manage and control risks has been
illustrated by the progress we have made, over recent years, to
de-risk the balance sheet. We are also continuing to develop our
risk management capabilities through a project to progress the
Society towards the Internal Ratings Based approach to credit risk.
The project, which was anticipated to result in an application
being submitted before the end of 2019, will be deferred to allow
the Society's models to be developed to take account of the latest
regulatory guidelines from the European Banking Authority and the
Prudential Regulation Authority published in CP 21/19 in September
2019.
Outlook
A recurring theme of the recent years has been the uncertain
outlook, driven primarily by the issues surrounding the UK's
withdrawal from the European Union. This uncertainty remains, with
a general election now also on the near term horizon. Forecasting
the housing market over the medium term therefore remains very
difficult. However, we expect to see a continuing pressure on
margins, to the point where levels do not appropriately account for
the associated risk.
As I stressed in my year-end report the West Brom, throughout
its now 170 year history, has remained resolute in how it has
delivered both continuity and change across generations. Our
performance in the first six months of this year, delivering
increased levels of profit, strengthened capital and sustained
member value has been guided by our long-term traditional building
society purpose of helping people to save and to have somewhere
they can call home. Delivering against these principles continues
to evidence the relevance and resilience of our mutual model.
Remaining true to, and delivering consistently against, this
purpose will help ensure we are well positioned to respond to both
the challenges and opportunities of the future.
Jonathan Westhoff
Chief Executive
Forward-looking statements
Certain statements in this half-yearly report are
forward-looking. Although the West Brom believes that the
expectations reflected in these forward-looking statements are
reasonable, we can give no assurance that these expectations will
prove to be an accurate reflection of actual results. By their
nature, all forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances that are
beyond the control of the West Brom. As a result, the West Brom's
actual future financial condition, business performance and results
may differ materially from the plans, goals and expectations
expressed or implied in these forward-looking statements. Due to
such risks and uncertainties the West Brom cautions readers not to
place undue reliance on such forward-looking statements. We
undertake no obligation to update any forward-looking statements
whether as a result of new information, future events or
otherwise.
Condensed consolidated half-yearly Income Statement
for the six months ended 30 September 2019
6 months 6 months Year
ended ended ended
30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
Notes GBPm GBPm GBPm
Interest receivable and similar income
Calculated using the effective interest
method 58.5 58.4 118.5
On instruments measured at fair value
through profit or loss (2.0) (4.1) (6.9)
Total interest receivable and similar
income 56.5 54.3 111.6
Interest expense and similar charges (27.8) (25.3) (53.1)
Net interest receivable 28.7 29.0 58.5
Fees and commissions receivable 1.1 1.6 2.6
Other operating income 2.2 2.0 4.0
Fair value (losses)/gains on financial
instruments (4.3) 0.2 (4.4)
Total income 27.7 32.8 60.7
Administrative expenses (19.4) (21.6) (42.6)
Depreciation and amortisation 10 (3.5) (3.3) (6.9)
Operating profit before revaluation gains,
impairment and provisions 4.8 7.9 11.2
Gains on investment properties 11 2.8 1.8 2.6
Impairment on loans and advances 6 (0.5) (3.7) (3.0)
Provisions for liabilities 7 (0.7) - (0.3)
Profit before tax 6.4 6.0 10.5
Taxation (1.2) (1.1) (1.4)
Profit for the period 5.2 4.9 9.1
-------------------------------------------- ------ ---------- ------------------ ----------
Condensed consolidated half-yearly Statement of Comprehensive
Income
for the six months ended 30 September 2019
6 months 6 months Year
ended ended ended
30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
GBPm GBPm GBPm
Profit for the period 5.2 4.9 9.1
--------------------------------------------------- ---------------- ---------------- -----------------
Other comprehensive income
Items that may subsequently be reclassified
to profit or loss
Fair value through other comprehensive
income investments
Valuation gains/(losses) taken to equity 0.3 (0.9) (1.1)
Taxation (0.1) 0.2 0.2
Items that will not subsequently be reclassified
to profit or loss
Actuarial losses on defined benefit obligations - - (2.5)
Taxation - - 0.5
--------------------------------------------------- ---------------- ---------------- -----------------
Other comprehensive income for the period,
net of tax 0.2 (0.7) (2.9)
--------------------------------------------------- ---------------- ---------------- -----------------
Total comprehensive income for the period 5.4 4.2 6.2
--------------------------------------------------- ---------------- ---------------- -----------------
Condensed consolidated half-yearly Statement of Financial
Position
at 30 September 2019
30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
Notes GBPm GBPm GBPm
Assets
Cash and balances with the Bank
of England 197.7 130.1 182.5
Loans and advances to credit
institutions 126.9 106.0 106.7
Investment securities 331.2 259.4 309.3
Derivative financial instruments 4.4 17.9 6.5
Loans and advances to customers 8 4,667.4 4,843.6 4,746.7
Deferred tax assets 17.7 19.7 18.9
Trade and other receivables 3.2 3.6 3.7
Intangible assets 10 17.2 15.1 16.5
Investment properties 11 137.5 134.0 134.7
Property, plant and equipment 10 29.8 29.6 28.4
------------------------------------ ------ ----------- ---------- ----------
Total assets 5,533.0 5,559.0 5,553.9
------------------------------------ ------ ----------- ---------- ----------
Liabilities
Shares 9 3,982.3 3,869.2 3,991.2
Amounts due to credit institutions 631.9 760.1 667.3
Amounts due to other customers 105.2 96.7 77.7
Derivative financial instruments 52.7 33.0 39.3
Debt securities in issue 12 322.0 369.7 344.1
Current tax liabilities - 4.0 1.1
Deferred tax liabilities 5.9 4.2 5.8
Trade and other payables 13.7 9.7 12.1
Provisions for liabilities 7 1.5 1.5 1.4
Retirement benefit obligations 3.4 4.0 4.9
Subordinated liabilities 16 22.8 22.8 22.8
Total liabilities 5,141.4 5,174.9 5,167.7
------------------------------------ ------ ----------- ---------- ----------
Members' interests and equity
Core capital deferred shares 13 127.0 127.0 127.0
Subscribed capital 15 8.9 8.9 8.9
General reserves 252.3 244.7 247.1
Revaluation reserve 3.3 3.4 3.3
Fair value reserve 0.1 0.1 (0.1)
------------------------------------ ------ ----------- ---------- ----------
Total members' interests and
equity 391.6 384.1 386.2
==================================== ====== =========== ========== ==========
Total members' interests, equity
and liabilities 5,533.0 5,559.0 5,553.9
------------------------------------ ------ ----------- ---------- ----------
Condensed consolidated Statement of Changes in Members'
Interests and Equity
for the six months ended 30 September 2019
6 months ended 30 September 2019 (unaudited)
Core
capital Fair
deferred Subscribed General Revaluation value
shares capital reserves reserve reserve Total
GBPm GBPm GBPm GBPm GBPm GBPm
At 1 April
2019 127.0 8.9 247.1 3.3 (0.1) 386.2
Profit for the
period - - 5.2 - - 5.2
Other
comprehensive
income
for the period
(net of
tax)
Fair value
through other
comprehensive
income
investments - - - - 0.2 0.2
Total other
comprehensive
income - - - - 0.2 0.2
--------------- ----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Total
comprehensive
income
for the
period - - 5.2 - 0.2 5.4
--------------- ----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
At 30
September
2019 127.0 8.9 252.3 3.3 0.1 391.6
--------------- ----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
6 months ended
30 September
2018
(unaudited)
Profit Core
participating capital Available Fair
deferred deferred Subscribed General Revaluation for sale value
shares shares capital reserves reserve reserve reserve Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 April
2018 175.0 - 75.0 215.8 3.4 0.8 - 470.0
Changes on
initial
application
of IFRS 9 - - - (27.9) - (0.8) 0.8 (27.9)
--------------- ----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
At 1 April
2018
including
impact of
IFRS 9
adoption 175.0 - 75.0 187.9 3.4 - 0.8 442.1
Profit for the
period - - - 4.9 - - - 4.9
Other
comprehensive
income
for the period
(net of
tax)
Fair value
through other
comprehensive
income
investments - - - - - - (0.7) (0.7)
Total other
comprehensive
income - - - - - - (0.7) (0.7)
--------------- ----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Total
comprehensive
income
for the
period - - - 4.9 - - (0.7) 4.2
Capital
restructuring (175.0) 127.0 (66.1) 51.9 - - - (62.2)
At 30
September
2018 - 127.0 8.9 244.7 3.4 - 0.1 384.1
--------------- ----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Year ended 31
March 2019
(audited)
Profit Core
participating capital Available Fair
deferred deferred Subscribed General Revaluation for sale value
shares shares capital reserves reserve reserve reserve Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 April
2018 175.0 - 75.0 215.8 3.4 0.8 - 470.0
Changes on
initial
application
of IFRS 9 - - - (27.8) - (0.8) 0.8 (27.8)
---------------- ---------------- ----------------
At 1 April
2018
including
impact of
IFRS 9
adoption 175.0 - 75.0 188.0 3.4 - 0.8 442.2
Profit for the
financial
year - - - 9.1 - - - 9.1
Other
comprehensive
income
for the year
(net of
tax)
Retirement
benefit
obligations - - - (2.0) - - - (2.0)
Realisation of
previous
revaluation
gains - - - 0.1 (0.1) - - -
Fair value
through other
comprehensive
income
investments - - - - - - (0.9) (0.9)
Total other
comprehensive
income - - - (1.9) (0.1) - (0.9) (2.9)
--------------- ----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Total
comprehensive
income
for the year - - - 7.2 (0.1) - (0.9) 6.2
Capital
restructuring (175.0) 127.0 (66.1) 51.9 - - - (62.2)
At 31 March
2019 - 127.0 8.9 247.1 3.3 - (0.1) 386.2
--------------- ----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Condensed consolidated half-yearly Statement of Cash Flows
for the six months ended 30 September 2019
6 months 6 months Year
ended ended ended
30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
GBPm GBPm GBPm
Net cash inflow/(outflow) from operating
activities (below) 82.2 (103.2) 30.7
-------------------------------------------- ----------------- ---------------- -----------------
Cash flows from investing activities
Purchase of investment securities (57.5) (62.5) (120.1)
Proceeds from disposal of investment
securities 47.9 65.3 87.8
Proceeds from disposal of investment
properties - - 0.1
Purchase of property, plant and equipment
and intangible assets (3.0) (2.5) (6.7)
Proceeds from disposal of property,
plant and equipment 0.6 - -
------------------------------------------- ----------------- ---------------- -----------------
Net cash flows from investing activities (12.0) 0.3 (38.9)
-------------------------------------------- ----------------- ---------------- -----------------
Cash flows from financing activities
Issue of debt securities - 1.0 1.0
Repayment of debt securities in issue (21.4) (124.0) (149.2)
Capital restructuring - (36.2) (36.2)
Interest paid on subordinated liabilities (1.2) - (1.2)
Payment of lease liabilities (0.3) - -
------------------------------------------- ----------------- ---------------- -----------------
Net cash flows from financing activities (22.9) (159.2) (185.6)
-------------------------------------------- ----------------- ---------------- -----------------
Net increase/(decrease) in cash 47.3 (262.1) (193.8)
Cash and cash equivalents at beginning
of period 298.7 492.5 492.5
-------------------------------------------- ----------------- ---------------- -----------------
Cash and cash equivalents at end of
period 346.0 230.4 298.7
-------------------------------------------- ----------------- ---------------- -----------------
For the purposes of the cash flow statement, cash and cash
equivalents comprise the following balances with maturities of
three months or less from the date of acquisition:
30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
GBPm GBPm GBPm
Cash and cash equivalents
Cash in hand (including Bank of England Reserve account) 187.1 119.4 172.0
Loans and advances to credit institutions 126.9 106.0 106.7
Investment securities 32.0 5.0 20.0
-----------------------------------------------------------
346.0 230.4 298.7
---------------------------------------------------------- --------------- --------------- ---------------
The Group is required to maintain certain mandatory balances
with the Bank of England which, at 30 September 2019, amounted to
GBP10.6m (30 September 2018: GBP10.7m and 31 March 2019: GBP10.5m).
The movement in these balances is included within cash flows from
operating activities.
Condensed consolidated half-yearly Statement of Cash Flows
(continued)
for the six months ended 30 September 2019
6 months 6 months Year
ended ended ended
30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
GBPm GBPm GBPm
Cash flows from operating activities
Profit before tax 6.4 6.0 10.5
Adjustments for non-cash items included
in profit before tax
Impairment on loans and advances 0.5 3.7 3.0
Depreciation and amortisation 3.5 3.3 6.9
Disposal of property, plant and equipment (0.1) - -
Revaluation of investment properties (2.8) (1.8) (2.6)
Changes in provisions for liabilities 0.1 (0.6) (0.7)
Interest on subordinated liabilities 1.2 1.2 2.4
Fair value losses on equity release
portfolio 0.1 0.9 1.7
Other non-cash movements (14.3) 1.3 (12.3)
---------------------------------------------- ---------- ---------- ----------
(5.4) 14.0 8.9
Changes in operating assets and liabilities
Loans and advances to customers 91.7 (79.0) 30.0
Loans and advances to credit institutions (0.1) (4.1) (3.9)
Derivative financial instruments 15.5 (4.1) 13.6
Shares (8.9) (182.1) (59.9)
Deposits and other borrowings (7.3) 153.0 42.0
Trade and other receivables 0.5 2.5 2.4
Trade and other payables (1.2) (2.3) 0.3
Retirement benefit obligations (1.5) (1.1) (2.7)
Tax paid (1.1) - -
Net cash inflow/(outflow) from operating
activities 82.2 (103.2) 30.7
---------------------------------------------- ---------- ---------- ----------
Notes to condensed consolidated half-yearly financial
information
for the six months ended 30 September 2019
1 General information
These half-yearly financial results do not constitute statutory
accounts within the meaning of the Building Societies Act 1986. A
copy of the statutory accounts for the year to 31 March 2019 has
been delivered to the Financial Conduct Authority and the relevant
information in this report has been extracted from these statutory
accounts. The statutory accounts for the year ended 31 March 2019
have been reported on by the Group's auditor and the report of the
auditor was (i) unqualified, and (ii) did not include a reference
to any matters to which the auditor drew attention by way of
emphasis without qualifying their report.
The consolidated half-yearly financial information for the six
months to 30 September 2019 and 30 September 2018 is unaudited and
has not been reviewed by the Group's auditor.
2 Basis of preparation
This condensed consolidated half-yearly financial report for the
six months ended 30 September 2019 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 condensed consolidated
financial report should be read in conjunction with the Annual
Report and Accounts for the year ended 31 March 2019, which have
been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union.
3 Going concern and business viability statement
Details of the Group's objectives, policies and processes for
managing its exposure to risk are contained in the Risk Management
Report of the 2018/19 Annual Report and Accounts. The Directors
also include statements in the Directors' Report in respect of
going concern and longer-term business viability on page 36 of the
2018/19 Annual Report and Accounts.
The Directors have reviewed the latest plans and forecasts for
the Group giving consideration to liquidity and capital adequacy.
They are satisfied that the Group has adequate resources to meet
both the normal demands of the business and the requirements which
might arise in stressed circumstances for the next 12 months and
that the longer-term business viability statement in the 2018/19
Annual Report and Accounts remains appropriate. Accordingly they
continue to adopt the going concern basis in preparing these
half-yearly financial results.
4 Accounting policies
The accounting policies adopted by the Group in the preparation
of its 2019 Interim Financial Report are consistent with those
disclosed in the Annual Report and Accounts for the year ended 31
March 2019 with the exception of the adoption of IFRS 16 'Leases',
the impacts of which are set out below.
IFRS 16 'Leases'
a) Introduction
IFRS 16 'Leases' was adopted by the Group from 1 April 2019 and
replaces IAS 17 'Leases'. The standard amends the definition of a
lease and sets out the principles for the recognition, measurement,
presentation and disclosure of leases. As permitted by the new
standard, the Group has implemented IFRS 16 using the 'modified
retrospective' approach and recognised the cumulative impact of
transition as an adjustment to 'general reserves' in the Statement
of Financial Position at 1 April 2019. Therefore, the comparative
information has not been restated and is presented, as previously
reported, under IAS 17 and related interpretations.
Previously, under IAS 17 and IFRIC 4 'Determining whether an
Arrangement contains a Lease', the Group had no finance leases but
had operating lease arrangements for properties whereby lease
rentals were expensed to the Income Statement and disclosed within
administrative expenses. On adoption of IFRS 16 under the modified
retrospective approach, these lease arrangements, where the Group
is a lessee, have been brought onto the Statement of Financial
Position. Lease liabilities, representing the obligation to make
future lease payments, have been recognised within trade and other
payables and initially measured at the present value of the
remaining lease payments at 1 April 2019, discounted using the
Group's incremental borrowing rate at that date. The incremental
borrowing rate was determined with reference to pricing for
securities with similar risk characteristics and terms to the
leased assets. The leased assets, reported as right-of-use assets
within property, plant and equipment, were initially measured at an
amount equal to the corresponding lease liabilities, adjusted for
any prepaid or accrued lease payments recognised at 31 March
2019.
Following transition, leases are identified in accordance with
the definition set out in IFRS 16. Operating lease rental costs are
replaced with depreciation charges on the right-of-use assets
(presented within administrative expenses) and interest expense
charged on lease liabilities (presented within interest expense and
similar charges). In the six months ended 30 September 2019, the
adoption of IFRS 16 resulted in a GBP0.3m reduction in
administrative expenses, offset by a GBP0.3m increase in
depreciation and interest payable.
The Group has elected to apply the following practical
expedients which are allowed on transition to IFRS 16:
- Contracts existing at 1 April 2019 have, without reassessment,
been identified as leases only if previously classified as such
under IAS 17.
- No right-of-use assets or lease liabilities have been
recognised for leases of plant and equipment which are of low value
or end within 12 months of the date of IFRS 16 adoption. For these
leases, payments continue to be recognised as administrative
expenses, on a straight line basis over the lease term.
- Reliance has been placed on previous assessments of whether
leases are onerous as an alternative to performing an impairment
review. As no provisions for onerous leases were required at 31
March 2019, there were no adjustments to right-of use assets in
this respect.
- Initial direct costs have been excluded from the measurement
of right-of-use assets at 1 April 2019.
- Where contracts contain termination or extension options,
hindsight has been used to determine the lease term.
IFRS 16 adoption has not impacted the reporting of lease
arrangements where the Group acts as lessor, with lessor accounting
being substantially unchanged from that prescribed by IAS 17.
The Society's first full set of financial statements prepared
under IFRS 16 will be published in the Annual Report and Accounts
for the year ended 31 March 2020.
b) Changes to accounting policies
The Group's new lease accounting policy is set out below.
Leases
When the Group enters into a contract which conveys the right to
control the use of an identified asset for a period of time in
excess of 12 months in exchange for consideration, it recognises a
right-of-use asset within property, plant and equipment and a
corresponding lease liability within trade and other payables in
the Statement of Financial Position. The majority of the Group's
leases relate to its branch property network.
The lease liability is measured at the present value of the
remaining lease payments at the commencement date, discounted using
the Group's incremental borrowing rate. The lease term incorporates
lease extension or termination options where they are reasonably
certain to be exercised. The incremental borrowing rate is
determined with reference to the market pricing of securities with
similar risk characteristics and terms to the leased assets at the
commencement date. The carrying value of the lease liability is
adjusted for interest charged and repayments. The lease liability
is remeasured for changes in future lease payments, the lease term
or the Group's assessment of whether it will exercise a lease
extension or termination option. Any remeasurement results in a
corresponding adjustment to the right-of-use asset. Interest is
charged on the lease liability at the Group's incremental borrowing
rate and recorded in interest expense and similar charges within
the Income Statement.
The right-of-use asset is measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for remeasurement
of the corresponding lease liability. The initial measurement of
the right-of-use asset includes the lease liability, initial direct
costs, lease payments made prior to the commencement date and lease
incentives received. It is subsequently depreciated using the
straight line method over the shorter of the asset's estimated
useful life and the period to the end of the lease term.
Right-of-use assets are subject to an annual impairment
assessment.
The Group does not recognise a right-of-use asset or lease
liability for leases of low value or with lease terms of less than
12 months. For these leases, payments are recognised on a straight
line basis over the lease term and disclosed within administrative
expenses in the Income Statement.
In the Statement of Cash Flows, payments of lease liabilities
are categorised as cash flows from financing activities.
c) Financial impact of IFRS 16 adoption
The Group has a number of leased assets, primarily branch
properties, which have been recognised as right-of-use assets under
IFRS 16. The financial impact of adopting this standard is
summarised in the table below.
Increase/(Decrease) in general
reserves
1-Apr-19
Impact of IFRS 16 adoption on Statement of Financial Position unaudited
equity category GBPm
Recognition of right-of-use assets Property, plant and equipment 2.6
Release of lease incentive
accruals Trade and other payables 0.2
Recognition of lease liabilities Trade and other payables (2.8)
----------------------------------- ----------------------------------- ----------------------------------
Total General reserves -
----------------------------------- ----------------------------------- ----------------------------------
A reconciliation between the operating lease commitments
disclosed in the 2018/19 Annual Report and Accounts and the lease
liability recognised at 1 April 2019 under IFRS 16 is set out in
the table below.
unaudited
Notes GBPm
Operating lease commitments disclosed at 31 March 2019 1.9
Operating lease commencing after 1 April 2019 (i) (0.3)
Adjustments for future termination and extension options (ii) 1.5
(ii
Impact of discounting i) (0.3)
Lease liability recognised at 1 April 2019 2.8
--------------------------------------------------------------------- ------------------
Notes
(i) Operating lease commitments disclosed at 31 March 2019
included lease agreements signed before the reporting date which
did not commence until after 1 April 2019 and are therefore
excluded from the lease liability recognised at 1 April 2019.
(ii) Operating lease commitments disclosed at 31 March 2019
represented the Group's minimum contractual commitments, assuming
that termination options were exercised where this was possible at
the discretion of the lessee. Under IFRS 16, the lease liability
includes the Group's expected behaviour in respect of future
termination and extension options.
(iii) The lease liability represents the value of future lease
payments discounted at the Group's incremental borrowing rate (IBR)
at 1 April 2019. The weighted average IBR on adoption of IFRS 16
was 2.6%, with the IBRs applied to individual leases ranging from
1.9% to 2.9% depending on the lease term.
Critical accounting estimates and judgements in applying
accounting policies
In the process of applying accounting policies, the Group makes
various judgements, estimates and assumptions which affect the
amounts recognised in the financial statements. Estimates and
judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future
events that are believed to be reasonable under the
circumstances.
Under IFRS 16, which was adopted in the period, the Group makes
judgements in relation to the exercise of termination and extension
options in order to calculate lease terms. Determining the
incremental borrowing rate used to discount the future lease
payments involves a degree of estimation uncertainty. However,
these judgements and estimates are not deemed critical as they do
not materially impact the financial statements.
For the half year accounts, tax has been charged on the
statutory profit before tax at the UK standard rate of 19%. A full
review of the tax position of the Society and its subsidiaries will
be carried out at the year end date. Otherwise, the significant
judgements in applying accounting policies and key sources of
estimation uncertainty at 30 September 2019 are unchanged from
those existing at 31 March 2019.
5 Business segments
Operating segments are reported in accordance with the internal
reporting provided to the Group Board (the chief operating decision
maker), which is responsible for allocating resources to the
reportable segments and assessing their performance.
The Group has three main business segments:
-- Retail - incorporating residential lending, savings,
investments and protection;
-- Commercial real estate - primarily representing loans for
commercial property investment; and
-- Property - a portfolio of residential properties for
rent.
Central Group operations have been included in Retail and
comprise risk management, finance, treasury services, human
resources and computer services, none of which constitute a
separately reportable segment.
There were no changes to reportable segments during the
period.
Transactions between the business segments are carried out at
arm's length. The revenue from external parties reported to the
Group Board is measured in a manner consistent with that in the
consolidated Income Statement.
Funds are ordinarily allocated between segments, resulting in
funding cost transfers disclosed in inter-segment net interest
income. Interest charged for these funds is based on the Group's
cost of capital. Central administrative costs are also allocated
between segments and are disclosed in inter-segment administrative
expenses. There are no other material items of income or expense
between the business segments.
The Group does not consider its operations to be cyclical or
seasonal in nature.
6 months ended 30 September 2019 Commercial Consolidation Total
(unaudited) Retail real estate Property adjustments Group
GBPm GBPm GBPm GBPm GBPm
Interest receivable and similar income
Calculated using the effective interest
method 60.9 5.3 - (7.7) 58.5
On instruments measured at fair
value through profit or loss (2.0) - - - (2.0)
-------------------------------------------- -------- ------------- --------- -------------- --------
Total interest receivable and similar
income 58.9 5.3 - (7.7) 56.5
Interest expense and similar charges (27.4) (6.7) (1.4) 7.7 (27.8)
-------------------------------------------- -------- ------------- --------- -------------- --------
Net interest receivable/(expense) 31.5 (1.4) (1.4) - 28.7
Fees and commissions receivable 1.1 - - - 1.1
Other operating income 0.1 - 2.1 - 2.2
Fair value losses on financial instruments (0.4) (3.7) - (0.2) (4.3)
-------------------------------------------- -------- ------------- --------- -------------- --------
Total income 32.3 (5.1) 0.7 (0.2) 27.7
Administrative expenses (18.8) (0.5) (0.1) - (19.4)
Depreciation and amortisation (3.5) - - - (3.5)
-------------------------------------------- -------- ------------- --------- -------------- --------
Operating profit/(loss) before revaluation
gains, impairment and provisions 10.0 (5.6) 0.6 (0.2) 4.8
Gains on investment properties - - 2.8 - 2.8
Impairment on loans and advances 0.4 (0.9) - - (0.5)
Provisions for liabilities (0.7) - - - (0.7)
-------------------------------------------- -------- ------------- --------- -------------- --------
Profit/(Loss) before tax 9.7 (6.5) 3.4 (0.2) 6.4
-------------------------------------------- -------- ------------- --------- -------------- --------
Total assets 5,495.2 370.1 139.9 (472.2) 5,533.0
-------------------------------------------- -------- ------------- --------- -------------- --------
Total liabilities 5,132.0 462.4 122.6 (575.6) 5,141.4
-------------------------------------------- -------- ------------- --------- -------------- --------
6 months ended 30 September 2018 Commercial
(unaudited) Retail real estate Property Consolidation adjustments Total Group
GBPm GBPm GBPm GBPm GBPm
Interest receivable and similar
income
Calculated using the effective
interest method 57.9 8.8 - (8.3) 58.4
On instruments measured at fair
value through profit or loss (3.7) (0.4) - - (4.1)
-------------------------------------- -------- ------------- --------- ---------------------------- ------------
Total interest receivable and similar
income 54.2 8.4 - (8.3) 54.3
Interest expense and similar charges (24.7) (7.4) (1.5) 8.3 (25.3)
-------------------------------------- -------- ------------- --------- ---------------------------- ------------
Net interest receivable/(expense) 29.5 1.0 (1.5) - 29.0
Fees and commissions receivable 1.6 - - - 1.6
Other operating (expense)/income (0.1) - 2.1 - 2.0
Fair value (losses)/gains on
financial instruments (0.6) 0.8 - - 0.2
-------------------------------------- -------- ------------- --------- ---------------------------- ------------
Total income 30.4 1.8 0.6 - 32.8
Administrative expenses (20.9) (0.6) (0.1) - (21.6)
Depreciation and amortisation (3.3) - - - (3.3)
-------------------------------------- -------- ------------- --------- ---------------------------- ------------
Operating profit before revaluation
gains, impairment and provisions 6.2 1.2 0.5 - 7.9
Gains on investment properties - - 1.8 - 1.8
Impairment on loans and advances (0.3) (3.4) - - (3.7)
-------------------------------------- -------- ------------- --------- ---------------------------- ------------
Profit/(Loss) before tax 5.9 (2.2) 2.3 - 6.0
-------------------------------------- -------- ------------- --------- ---------------------------- ------------
Total assets 5,525.2 399.6 136.5 (502.3) 5,559.0
-------------------------------------- -------- ------------- --------- ---------------------------- ------------
Total liabilities 5,133.7 490.7 123.2 (572.7) 5,174.9
-------------------------------------- -------- ------------- --------- ---------------------------- ------------
Commercial Consolidation Total
Year ended 31 March 2019 (audited) Retail real estate Property adjustments Group
GBPm GBPm GBPm GBPm GBPm
Interest receivable and similar
income
Calculated using the effective
interest
method 119.6 15.3 - (16.4) 118.5
On instruments measured at fair
value through profit or loss (7.1) 0.2 - - (6.9)
-------------------------------------- -------- ------------------------ ----------- --------------- ------------
Total interest receivable and similar
income 112.5 15.5 - (16.4) 111.6
Interest expense and similar charges (52.0) (14.6) (2.9) 16.4 (53.1)
-------------------------------------- -------- ------------------------ ----------- --------------- ------------
Net interest receivable/(expense) 60.5 0.9 (2.9) - 58.5
Fees and commissions receivable 2.6 - - - 2.6
Other operating income (0.1) - 4.1 - 4.0
Fair value losses on financial
instruments (1.7) (2.4) - (0.3) (4.4)
-------------------------------------- -------- ------------------------ ----------- --------------- ------------
Total income 61.3 (1.5) 1.2 (0.3) 60.7
Administrative expenses (41.2) (1.3) (0.1) - (42.6)
Depreciation and amortisation (6.9) - - - (6.9)
-------------------------------------- -------- ------------------------ ----------- --------------- ------------
Operating profit/(loss) before
revaluation
gains, impairment and provisions 13.2 (2.8) 1.1 (0.3) 11.2
Gains on investment properties - - 2.6 - 2.6
Impairment on loans and advances (1.2) (1.8) - - (3.0)
Provisions for liabilities - (0.3) - - (0.3)
-------------------------------------- -------- ------------------------ ----------- --------------- ------------
Profit/(Loss) before tax 12.0 (4.9) 3.7 (0.3) 10.5
-------------------------------------- -------- ------------------------ ----------- --------------- ------------
Total assets 5,497.3 381.6 137.0 (462.0) 5,553.9
-------------------------------------- -------- ------------------------ ----------- --------------- ------------
Total liabilities 5,139.9 472.5 123.1 (567.8) 5,167.7
-------------------------------------- -------- ------------------------ ----------- --------------- ------------
6 Allowance for losses on loans and advances to customers
6 months 6 months Year
ended ended ended
30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
GBPm GBPm GBPm
Impairment charge for the period 0.5 3.7 3.0
---------------------------------------------- ---------- ---------- ----------
Impairment provision at end of period
Loans fully secured on residential property 4.3 6.3 6.0
Loans fully secured on land 70.4 77.4 70.7
---------------------------------------------- ---------- ---------- ----------
Total 74.7 83.7 76.7
---------------------------------------------- ---------- ---------- ----------
In accordance with IFRS 9, 'Financial instruments', forecasts of
future economic conditions are integral to the expected credit loss
calculations. At 31 March 2019, the Group modelled four
forward-looking macroeconomic scenarios: central, upside, downside
and stress with respective probability weightings of 50%, 10%, 30%
and 10%. Individual economic variables within the scenarios are
regularly reviewed and updated to reflect the current economic
outlook.
At 30 September 2019, the probability weightings were adjusted
to skew towards the downside scenarios with uncertainties in the
future economic environment, together with geopolitical risk (not
least from Brexit), potentially weighing on any upside. The central
scenario was still considered the most likely single scenario at
40%. The upside, downside and stress scenarios had probability
weightings of 5%, 35% and 20% respectively. Due to the uncertainty
of the path of interest rates in the event of a disruptive Brexit,
the stress scenario was segmented into two, representing low and
high Bank Rate trajectories.
The tables below analyse the movement in residential impairment
provisions by IFRS 9 stage.
Stage Stage Stage
1 2 3 Total
6 months ended 30 September 2019 (unaudited) GBPm GBPm GBPm GBPm
Residential expected credit loss allowance
At 1 April 2019 0.6 1.1 4.3 6.0
Transfers due to increased credit risk:
From stage 1 to stage 2 - 0.1 - 0.1
From stage 1 to stage 3 - - 0.1 0.1
From stage 2 to stage 3 - (0.1) 0.3 0.2
Transfers due to decreased credit risk:
From stage 2 to stage 1 - (0.1) - (0.1)
From stage 3 to stage 2 - - (0.2) (0.2)
Remeasurement of expected credit losses
with no stage transfer (0.2) (0.1) 0.2 (0.1)
Redemptions - - (0.1) (0.1)
Amounts written off - - (1.5) (1.5)
Other movements - - (0.1) (0.1)
---------------------------------------------- ------- ------- ------- -------
At 30 September 2019 0.4 0.9 3.0 4.3
---------------------------------------------- ------- ------- ------- -------
Stage Stage Stage
1 2 3 Total
6 months ended 30 September 2018 (unaudited) GBPm GBPm GBPm GBPm
Residential expected credit loss allowance
At 1 April 2018 0.6 2.5 4.7 7.8
Transfers due to increased credit risk:
From stage 1 to stage 2 - 0.1 - 0.1
From stage 2 to stage 3 - (0.3) 0.2 (0.1)
Transfers due to decreased credit risk:
From stage 2 to stage 1 - (0.2) - (0.2)
From stage 3 to stage 2 - 0.1 (0.2) (0.1)
Remeasurement of expected credit losses
with no stage transfer - 0.2 0.9 1.1
Redemptions - (0.1) (0.1) (0.2)
Amounts written off - - (2.1) (2.1)
---------------------------------------------- ------- ------- ------- -------
At 30 September 2018 0.6 2.3 3.4 6.3
---------------------------------------------- ------- ------- ------- -------
Stage Stage Stage
1 2 3 Total
Year ended 31 March 2019 (audited) GBPm GBPm GBPm GBPm
Residential expected credit loss allowance
At 1 April 2018 0.6 2.5 4.7 7.8
Transfers due to increased credit risk:
From stage 1 to stage 2 - 0.4 - 0.4
From stage 1 to stage 3 (0.1) - 0.5 0.4
From stage 2 to stage 3 - (0.3) 1.0 0.7
Transfers due to decreased credit risk:
From stage 2 to stage 1 0.1 (0.7) - (0.6)
From stage 3 to stage 2 - 0.1 (0.5) (0.4)
Remeasurement of expected credit losses
with no stage transfer 0.2 (0.6) 2.6 2.2
Redemptions (0.1) (0.3) (0.2) (0.6)
Amounts written off (0.1) - (3.7) (3.8)
Other movements - - (0.1) (0.1)
-------------------------------------------- ------- ------- ------- -------
At 31 March 2019 0.6 1.1 4.3 6.0
-------------------------------------------- ------- ------- ------- -------
The tables below analyse the movement in commercial impairment
provisions by IFRS 9 stage.
Stage Stage Stage
1 2 3 Total
6 months ended 30 September 2019 (unaudited) GBPm GBPm GBPm GBPm
Commercial expected credit loss allowance
At 1 April 2019 0.3 8.8 61.6 70.7
Transfers due to increased credit risk:
From stage 2 to stage 3 - (2.7) 2.8 0.1
Remeasurement of expected credit losses
with no stage transfer 0.1 (0.4) 3.0 2.7
Redemptions - - (0.7) (0.7)
Amounts written off - - (2.4) (2.4)
---------------------------------------------- ------- ------- ------- -------
At 30 September 2019 0.4 5.7 64.3 70.4
---------------------------------------------- ------- ------- ------- -------
Stage Stage Stage
1 2 3 Total
6 months ended 30 September 2018 (unaudited) GBPm GBPm GBPm GBPm
Commercial expected credit loss allowance
At 1 April 2018 0.1 11.8 62.5 74.4
Transfers due to increased credit risk:
From stage 2 to stage 3 - (2.1) 0.2 (1.9)
Transfers due to decreased credit risk:
From stage 3 to stage 2 - 0.1 (0.1) -
Remeasurement of expected credit losses
with no stage transfer - 1.3 4.7 6.0
Redemptions - - (0.2) (0.2)
Amounts written off - - (0.9) (0.9)
At 30 September 2018 0.1 11.1 66.2 77.4
---------------------------------------------- ------- ------- ------- -------
Stage Stage Stage
1 2 3 Total
Year ended 31 March 2019 (audited) GBPm GBPm GBPm GBPm
Commercial expected credit loss allowance
At 1 April 2018 0.1 11.8 62.5 74.4
Transfers due to increased credit risk:
From stage 1 to stage 2 (0.1) 0.1 - -
Transfers due to decreased credit risk:
From stage 2 to stage 1 0.3 (0.2) - 0.1
From stage 3 to stage 2 - 2.3 (2.6) (0.3)
Remeasurement of expected credit losses
with no stage transfer - (4.7) 8.7 4.0
Redemptions - - (0.2) (0.2)
Amounts written off - (0.5) (6.8) (7.3)
------------------------------------------- ------- ------- ------- -------
At 31 March 2019 0.3 8.8 61.6 70.7
------------------------------------------- ------- ------- ------- -------
7 Provisions for liabilities
6 months ended 30 September 2019
(unaudited)
FSCS Other Total
GBPm GBPm GBPm
At beginning
of period - 1.4 1.4
Utilised in the
period - (0.6) (0.6)
Charge for the
period - 0.7 0.7
At end of period - 1.5 1.5
----------------------------------- ---- ------ ------ ------
6 months ended 30 September 2018
(unaudited)
FSCS Other Total
GBPm GBPm GBPm
At beginning of
period 0.2 1.9 2.1
Utilised in the
period (0.2) (0.4) (0.6)
Charge for the
period - - -
At end of period - 1.5 1.5
------------------------------------ --- ------ ------ ------
Year ended 31 March 2019
(audited)
FSCS Other Total
GBPm GBPm GBPm
At beginning
of year 0.2 1.9 2.1
Utilised in the
year (0.2) (0.8) (1.0)
Charge for the
year - 0.3 0.3
At end of year - 1.4 1.4
----------------------------------- ---- ------ ------ ------
Other provisions
Other provisions primarily relate to Payment Protection
Insurance (PPI) redress for which, following a number of media
campaigns, the volume of claims increased significantly leading up
to the 29 August 2019 deadline set by the Financial Conduct
Authority (FCA). The PPI provision represents the Group's best
estimate of the costs to settle its remaining obligations in
respect of PPI claims.
8 Loans and advances to customers
30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
GBPm GBPm GBPm
Amortised cost
Loans fully secured on residential
property 4,303.7 4,476.4 4,383.2
Loans fully secured
on land 382.1 417.5 394.9
4,685.8 4,893.9 4,778.1
Fair value through
profit or loss
Loans fully secured on residential
property 14.3 16.4 14.8
4,700.1 4,910.3 4,792.9
Fair value adjustment for
hedged risk 42.0 17.0 30.5
Less: impairment provisions (74.7) (83.7) (76.7)
4,667.4 4,843.6 4,746.7
------------------------------------ ---------- ---------- ----------
Included within loans and advances to customers are GBP432.5m
(31 March 2019: GBP444.3m) of commercial lending balances of which
GBP25.8m (31 March 2019: GBP32.4m) have been sold by the Group to
bankruptcy remote structured entities.
The tables below illustrate the IFRS 9 staging distribution of
residential and commercial loans and advances to customers held at
amortised cost and related credit loss provisions. Stage 2 loans
have been further analysed to show those which are more than 30
days past due, the IFRS 9 backstop for identifying a significant
increase in credit risk (SICR) and those which meet other SICR
criteria. For the purposes of this disclosure, gross exposures and
expected credit loss provisions are rounded to the nearest GBP0.1m
whereas the provision coverage percentages are based on the
underlying data prior to rounding.
Expected
credit
Gross loss Provision
exposure provision coverage
At 30 September 2019 (unaudited) GBPm GBPm %
Residential loans held at
amortised cost
Stage
1 3,793.3 0.4 0.01
Stage
2
> 30 days past
due 17.4 0.1 0.64
Other SICR indicators 416.9 0.8 0.18
Stage
3 56.7 3.0 5.33
4,284.3 4.3 0.10
---------------------------------- --------- ---------- ----------
Expected
credit
Gross loss Provision
exposure provision coverage
At 30 September 2018
(unaudited) GBPm GBPm %
Residential loans held at
amortised cost
Stage
1 4,029.1 0.6 0.01
Stage
2
> 30 days
past due 20.3 0.2 1.00
Other SICR indicators 350.6 2.1 0.61
Stage
3 58.4 3.4 5.88
4,458.4 6.3 0.14
---- --------------------------- --------- ---------- ----------
Expected
credit
Gross loss Provision
exposure provision coverage
At 31 March 2019 (audited) GBPm GBPm %
Residential loans held at
amortised cost
Stage
1 3,887.2 0.6 0.02
Stage
2
> 30 days
past due 15.1 0.2 1.42
Other SICR indicators 399.8 0.9 0.21
Stage
3 61.7 4.3 6.97
4,363.8 6.0 0.14
---------------------------- --------- ---------- ----------
Expected
credit
Gross loss Provision
exposure provision coverage
At 30 September 2019 (unaudited) GBPm GBPm %
Commercial loans held at
amortised cost
Stage
1 71.0 0.4 0.57
Stage
2
> 30 days
past due - - -
Other SICR indicators 97.3 5.7 5.90
Stage
3 264.2 64.3 24.33
432.5 70.4 16.28
---------------------------------- --------- ---------- ----------
Expected
credit
Gross loss Provision
exposure provision coverage
At 30 September 2018
(unaudited) GBPm GBPm %
Commercial loans held at
amortised cost
Stage
1 70.7 0.1 0.08
Stage
2
> 30 days
past due - - -
Other SICR indicators 97.0 11.1 11.41
Stage
3 296.7 66.2 22.33
464.4 77.4 16.66
-------------------------- --------- ---------- ----------
Expected
credit
Gross loss Provision
exposure provision coverage
At 31 March 2019
(audited) GBPm GBPm %
Commercial loans held at
amortised cost
Stage
1 74.1 0.3 0.42
Stage
2
> 30 days
past due 11.5 0.3 2.74
Other SICR indicators 121.6 8.5 6.94
Stage
3 237.1 61.6 25.99
444.3 70.7 15.91
-------------------------- --------- ---------- ----------
9 Shares
30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
GBPm GBPm GBPm
Held by individuals 3,981.3 3,867.9 3,990.2
Other shares 1.0 1.1 1.0
Fair value adjustment for hedged - 0.2 -
risk
---------------------------------- ---------------- ---------- -----------------
3,982.3 3,869.2 3,991.2
---------------------------------- ---------------- ---------- -----------------
10 Property, plant, equipment and intangible assets
Property,
Intangible plant
assets and equipment
6 months ended 30 September 2019 (unaudited) GBPm GBPm
Net book value at 31 March 2019 16.5 28.4
Changes on initial application of
IFRS 16 - 2.6
----------------------------------------------- -------------- ---------------
At 1 April 2019 including impact of
IFRS 16 adoption 16.5 31.0
Additions 2.7 0.8
Disposals - (0.5)
Depreciation, amortisation, impairment
and other movements (2.0) (1.5)
----------------------------------------------- -------------- ---------------
Net book value at 30 September 2019 17.2 29.8
----------------------------------------------- -------------- ---------------
Property,
Intangible plant
assets and equipment
6 months ended 30 September 2018 (unaudited) GBPm GBPm
Net book value at 1 April 2018 15.3 30.2
Additions 1.4 1.1
Depreciation, amortisation, impairment
and other movements (1.6) (1.7)
----------------------------------------------- -------------- ---------------
Net book value at 30 September 2018 15.1 29.6
----------------------------------------------- -------------- ---------------
Property,
Intangible plant
assets and equipment
Year ended 31 March 2019 (audited) GBPm GBPm
Net book value at 1 April 2018 15.3 30.2
Additions 5.1 1.2
Depreciation, amortisation, impairment
and other movements (3.9) (3.0)
----------------------------------------------- ---------------
Net book value at 31 March 2019 16.5 28.4
----------------------------------------------- -------------- ---------------
11 Investment properties
6 months 6 months Year
ended ended ended
30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
GBPm GBPm GBPm
Valuation
At beginning of period 134.7 132.2 132.2
Disposals - - (0.1)
Revaluation gains 2.8 1.8 2.6
------------------------ ---------------- ---------------- ----------
At end of period 137.5 134.0 134.7
------------------------ ---------------- ---------------- ----------
12 Debt securities in issue 30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
GBPm GBPm GBPm
Certificates of deposit 1.0 1.0 1.0
Non-recourse finance on securitised
advances 321.0 368.7 343.1
------------------------------------- ---------- ---------- ----------
322.0 369.7 344.1
------------------------------------- ---------- ---------- ----------
The non-recourse finance comprises mortgage backed floating rate
notes (the Notes) secured over portfolios of mortgage loans secured
by first charges over residential and commercial properties in the
United Kingdom. Prior to redemption of the Notes on the final
interest payment date, the Notes will be subject to mandatory
and/or optional redemption, in certain circumstances, on each
interest payment date.
13 Core capital deferred shares
Number of CCDS nominal Share
shares amount premium Total
GBPm GBPm GBPm
At 30 September 2019
(unaudited) 1,288,813 1.3 125.7 127.0
---------------------------- ---------- ------------- --------- ------
At 30 September 2018
(unaudited) 1,288,813 1.3 125.7 127.0
---------------------------- ---------- ------------- --------- ------
At 31 March 2019 (audited) 1,288,813 1.3 125.7 127.0
---------------------------- ---------- ------------- --------- ------
CCDS are perpetual instruments and a form of Common Equity Tier
1 (CET 1) capital.
CCDS are the most junior-ranking capital instrument of the
Society, ranking behind the claims of all depositors, payables and
investing members.
The CCDS holders are entitled to receive a distribution at the
discretion of the Society. The total distribution paid on each CCDS
in respect of any given financial year of the Society is subject to
a cap provided for in the Rules of the Society and adjusted
annually for inflation. In line with the forecast distribution
policy, the Directors did not declare a distribution in respect of
the year ended 31 March 2019. Subsequent to the balance sheet date,
the Directors have declared an interim distribution of GBP0.50 per
CCDS in respect of the period to 30 September 2019 which will be
paid in February 2020. The interim distribution is not reflected in
these financial statements as distributions to the CCDS holders are
recognised with reference to the date they are declared.
In the event of a winding up or dissolution of the Society, the
share of surplus assets (if any) a CCDS holder would be eligible to
receive is determined by the calculation of a core capital
contribution proportion, limited to a maximum of the average
principal amount, currently GBP100 per CCDS.
14 Related party transactions
Related party transactions for the six months to 30 September
2019 are within the normal course of business and of a similar
nature to those for the last financial year, full details of which
are disclosed in the Annual Report and Accounts for the year ended
31 March 2019.
15 Subscribed capital
30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
GBPm GBPm GBPm
Permanent interest bearing shares 8.9 8.9 8.9
---------------------------------- --------------- --------- ---------
The 6.15% permanent interest bearing shares (PIBS) comprise
8,891 PIBS of GBP1,000 each issued at a price of 99.828% of their
principal amount, with the issue premium amortised.
The PIBS are repayable at the option of the Society in whole on
5 April 2021 or any scheduled interest payment thereafter, subject
to approval by the Prudential Regulation Authority (PRA).
In a winding up or dissolution of the Society the claims of the
holders of permanent interest bearing shares (PIBS) would rank
behind all other creditors of the Society, with the exception of
holders of core capital deferred shares (CCDS). The holders of PIBS
are not entitled to any share in any final surplus upon winding up
or dissolution of the Society.
Future interest payments are at the discretion of the Society,
up to a maximum 6.15% prior to 5 April 2021 and, thereafter, a rate
of interest reset periodically and equal to the applicable 5-year
gilt rate plus a margin of 2.8%. As announced on 2 October 2019, in
accordance with the published distribution policy, the Board
resolved not to make an interest payment on the scheduled interest
payment date of 5 October 2019.
16 Subordinated liabilities
30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
GBPm GBPm GBPm
Subordinated notes due 2038 -
11.0% 22.8 22.8 22.8
------------------------------- --------------- ---------- ----------
The Society's subordinated notes rank behind all other creditors
of the Society, with the exception of holders of CCDS and PIBS.
17 Financial instruments
Fair values of financial assets and financial liabilities
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The Group determines
fair values by the following three tier valuation hierarchy:
Level 1: Quoted prices (unadjusted) in active markets for
identical assets or liabilities.
Level 2: Valuation techniques where all inputs are taken from
observable market data, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Level 3: Valuation techniques where significant inputs are not
based on observable market data.
Valuation techniques include net present value and discounted
cash flow models, comparison to similar instruments for which
market observable prices exist and other valuation models.
Assumptions and market observable inputs used in valuation
techniques include risk-free and benchmark interest rates, equity
index prices and expected price volatilities. The objective of
valuation techniques is to arrive at a fair value determination
that reflects the price of the financial instrument at the
reporting date that would have been determined by market
participants acting at arm's length. Observable prices are those
that have been seen either from counterparties or from market
pricing sources including Bloomberg. The use of these depends upon
the liquidity of the relevant market.
Financial assets and financial liabilities held at amortised
cost
The tables below show the fair values of the Group's financial
assets and liabilities held at amortised cost in the Statement of
Financial Position, analysed according to the fair value hierarchy
described above.
At 30 September 2019 (unaudited) Carrying Fair value Fair value Fair value Fair value
Level Level Level
value 1 2 3 Total
GBPm GBPm GBPm GBPm GBPm
Financial assets
Cash and balances with the Bank
of England 197.7 197.7 - - 197.7
Loans and advances to credit
institutions 126.9 - 126.9 - 126.9
Loans and advances to customers 4,653.1 - - 4,645.3 4,645.3
----------------------------------- -------------- --------------- --------------- --------------- --------------
4,977.7 197.7 126.9 4,645.3 4,969.9
----------------------------------- -------------- --------------- --------------- --------------- --------------
Financial liabilities
Shares 3,982.3 - - 3,948.2 3,948.2
Amounts due to credit institutions 631.9 - 631.9 - 631.9
Amounts due to other customers 105.2 - 105.2 - 105.2
Debt securities in issue 322.0 306.4 15.5 - 321.9
----------------------------------- -------------- --------------- --------------- --------------- --------------
5,041.4 306.4 752.6 3,948.2 5,007.2
----------------------------------- -------------- --------------- --------------- --------------- --------------
At 30 September 2018 (unaudited) Carrying Fair value Fair value Fair value Fair value
Level Level Level
value 1 2 3 Total
GBPm GBPm GBPm GBPm GBPm
Financial assets
Cash and balances with the Bank
of England 130.1 130.1 - - 130.1
Loans and advances to credit
institutions 106.0 - 106.0 - 106.0
Loans and advances to customers 4,827.2 - - 4,837.7 4,837.7
------------------------------------- ------------- --------------- --------------- --------------- -------------
5,063.3 130.1 106.0 4,837.7 5,073.8
------------------------------------- ------------- --------------- --------------- --------------- -------------
Financial liabilities
Shares 3,869.2 - - 3,849.4 3,849.4
Amounts due to credit institutions 760.1 - 760.1 - 760.1
Amounts due to other customers 96.7 - 96.7 - 96.7
Debt securities in issue 369.7 347.2 16.0 - 363.2
------------------------------------- ------------- --------------- --------------- --------------- -------------
5,095.7 347.2 872.8 3,849.4 5,069.4
------------------------------------- ------------- --------------- --------------- --------------- -------------
At 31 March 2019 (audited) Carrying Fair value Fair value Fair value Fair value
Level Level Level
value 1 2 3 Total
GBPm GBPm GBPm GBPm GBPm
Financial assets
Cash and balances with the Bank
of England 182.5 182.5 - - 182.5
Loans and advances to credit
institutions 106.7 - 106.7 - 106.7
Loans and advances to customers 4,731.9 - - 4,669.9 4,669.9
------------------------------------- ------------- --------------- --------------- --------------- -------------
5,021.1 182.5 106.7 4,669.9 4,959.1
------------------------------------- ------------- --------------- --------------- --------------- -------------
Financial liabilities
Shares 3,991.2 - - 3,955.5 3,955.5
Amounts due to credit institutions 667.3 - 667.3 - 667.3
Amounts due to other customers 77.7 - 77.7 - 77.7
Debt securities in issue 344.1 327.2 15.8 - 343.0
------------------------------------- ------------- --------------- --------------- --------------- -------------
5,080.3 327.2 760.8 3,955.5 5,043.5
------------------------------------- ------------- --------------- --------------- --------------- -------------
a) Loans and advances to customers
The fair value of loans and advances to customers has been
determined taking into account factors such as impairment and
interest rates. The fair values have been calculated on a product
basis and, as such, do not necessarily represent the value that
could have been obtained for a portfolio if it were sold at 30
September 2019.
b) Shares and borrowings
The estimated fair value of deposits with no stated maturity,
which includes non-interest bearing deposits, is the amount
repayable on demand. The estimated fair value of fixed
interest-bearing deposits and other borrowings without quoted
market price is based on discounted cash flows using interest rates
for new deposits with similar remaining maturity. The fair values
have been calculated on a product basis and as such do not
necessarily represent the value that could have been obtained for a
portfolio if it were sold at 30 September 2019.
c) Debt securities in issue
The aggregate fair values are calculated based on quoted market
prices. For those notes where quoted market prices are not
available, a discounted cash flow model is used based on a current
yield curve appropriate for the remaining term to maturity.
Financial assets and financial liabilities held at fair
value
The tables below show the fair values of the Group's financial
assets and liabilities held at fair value in the Statement of
Financial Position, analysed according to the fair value hierarchy
described previously.
Level Level Level 3
At 30 September 2019 (unaudited) 1 2 Total
GBPm GBPm GBPm GBPm
Financial assets
Investment securities 331.2 - - 331.2
Derivative financial instruments - 4.4 - 4.4
Loans and advances to customers - - 14.3 14.3
331.2 4.4 14.3 349.9
--------------------------------- --------------- --------------- --------------- ---------------
Financial liabilities
Derivative financial instruments - 52.7 - 52.7
--------------------------------- --------------- --------------- --------------- ---------------
Level Level Level 3
At 30 September 2018 (unaudited) 1 2 Total
GBPm GBPm GBPm GBPm
Financial assets
Investment securities 259.4 - - 259.4
Derivative financial instruments - 17.9 - 17.9
Loans and advances to customers - - 16.4 16.4
259.4 17.9 16.4 293.7
--------------------------------- --------------- --------------- ------- ----------------
Financial liabilities
Derivative financial instruments - 33.0 - 33.0
--------------------------------- --------------- --------------- ------- ----------------
Level Level Level 3
At 31 March 2019 (audited) 1 2 Total
GBPm GBPm GBPm GBPm
Financial assets
Investment securities 309.3 - - 309.3
Derivative financial instruments - 6.5 - 6.5
Loans and advances to customers - - 14.8 14.8
309.3 6.5 14.8 330.6
--------------------------------- --------------- --------------- --------------- ---------------
Financial liabilities
Derivative financial instruments - 39.3 - 39.3
--------------------------------- --------------- --------------- --------------- ---------------
The table below analyses movements in the level 3 portfolio
during the period.
6 months 6 months Year
ended ended ended
30-Sep-19 30-Sep-18 31-Mar-19
unaudited unaudited audited
GBPm GBPm GBPm
Equity release portfolio
At beginning of period 14.8 18.4 18.4
Items recognised in the Income
Statement
Interest receivable and similar
income 0.5 0.5 1.0
Fair value losses on financial
instruments (0.1) (0.9) (1.7)
Redemption payments (0.9) (1.6) (2.9)
At end of period 14.3 16.4 14.8
---------------------------------------- ------------------- ----------------- ------------------
There have been no transfers of financial assets or liabilities
between levels of the valuation hierarchy in the period.
18 Statement of Directors' responsibilities
The Directors confirm that this condensed set of financial
statements has been prepared in accordance with IAS 34 'Interim
Financial Reporting' as adopted by the European Union, and that the
interim management report herein includes a fair review of the
information required by DTR 4.2.7R and DTR 4.2.8R.
The Directors of West Bromwich Building Society are listed in
the West Bromwich Building Society Annual Report for the year ended
31 March 2019. Subsequent to the publication of the Annual Report,
on 25 July 2019, Martin Ritchley stepped down from the Board after
serving a full nine years as a member of the Board.
Signed on behalf of the Board of Directors:
Jonathan Westhoff Ashraf Piranie
Chief Executive Group Finance & Operations Director
26 November 2019
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BXBDBIBDBGCL
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