TIDMNBSR
RNS Number : 3806D
Newcastle Building Society
02 March 2022
NEWCASTLE BUILDING SOCIETY ANNOUNCES
2021 FINANCIAL RESULTS
Key Highlights
* Profit for the year before taxation increased
significantly to GBP29.1m (2020: GBP1.4m)
* Operating profit before impairments and provisions
increased significantly by GBP13.6m to GBP28.5m
(2020: GBP14.9m)
* Underlying operating profit of GBP22.0m (2020:
GBP16.9m)
* Gross mortgage lending for the year was GBP861m and
net core residential lending GBP330m (GBP645m gross
and GBP228m net in 2020)
* Market leading mortgage innovation through Deposit
Unlock - the first lender to market with a successful
pilot and rollout of an innovative new build homes
initiative supporting those with a small deposit to
get a foot on the housing ladder
* First Homes - participation in the government scheme
to support affordable home ownership on new homes
developments
* Over GBP82m of funds invested for Members through our
advice subsidiary, Newcastle Financial Advisers
Limited
* Customer satisfaction score at an all-time high of
95% and net promoter score (NPS) improved further to
+82 (2020 +78)
* More than GBP750,000 in community funding through
charity partnerships, community grants, and colleague
fund raising matches
* Awards:
* Best Regional Building Society - 5th consecutive year
(What Mortgage)
* Best Building Society for Mortgages (Credit Strategy
Lending Awards)
* 4* Mortgage Provider rating (Financial Advisor
Service Awards)
* Best Community Services (Mortgage Finance Gazette)
* Best Use of Customer Insight (International Engage
Awards 2021)
* North East Apprentice of the Year
* Gold Better Health At Work Status
* 21 additional awards our Solutions subsidiary helped
their clients to win
Chief Executive's Statement
Strength through purpose
Throughout 2021 the Covid-19 pandemic continued to cast a shadow
over various aspects of our lives and work. As the year progressed
the second pandemic wave in the UK asserted its hold through the
highly infectious Omicron variant, and once again individuals,
families and communities were forced to reassess how to be
together.
The majority of our colleagues continued to work remotely as we
delayed our return to our new head office location at Cobalt Park
until the first half of 2022. In this period the housing market
maintained unusually high levels of transactions and house prices
continued on their upward trajectory, relatively immune from the
wider economic impacts of the pandemic. Meanwhile the base rate
remained at its historically low level until the very end of the
year, and the unwelcome prospect of rising inflation started to
materialise.
At the end of 2020, I stated that we aspired to exit this period
of crisis and recovery in a stronger position than we might have
expected to achieve without having gone through this experience,
and I'm very proud that we have delivered on this. For your Society
despite the many challenges, 2021 was a year of achievement,
characterised by a spirit of can do, innovation, agility,
responsiveness, ongoing commitment and investment, which I will
cover in more detail in the body of my review.
The underlying financial performance has been strong with record
pre-tax profit and operating profit. The Group's operating profit
before impairments and provisions for 2021 was GBP28.5m, an
increase on last year by GBP13.6m. This resulted in a pre-tax
profit of GBP29.1m, compared to GBP1.4m for 2020 and ahead of what
was budgeted. This position reflects the ongoing success of our
purpose-led strategy and the tireless commitment of our colleagues
to deliver for customers, regardless of the challenging
environment.
Also during the year, I was delighted to join my colleagues in
extending a very warm welcome to James Ramsbotham, who joined us as
our new Chair in September following our previous Chair, Phil
Moorhouse, stepping down. I am hugely grateful to Phil for the
leadership he provided to our Board through a very challenging
period and the significant personal contribution he made to the
success of the Society during that time. We consider that we are
very fortunate to have James on our Board. He has extensive
experience and clear focus on both customers and communities, and
we very much look forward to working with him in the years
ahead.
Purpose
We are the North East's largest building society with assets of
GBP4.9bn and 30 branches across the North East, Cumbria and North
Yorkshire. We are committed to the people and places that make up
our region and believe in the power and value of lasting, authentic
customer relationships.
We are a purpose-led, Member owned organisation. Our purpose is
to connect our communities with a better financial future. This
informs our strategy, our decision making, and defines how we
measure our success.
During 2021 we evolved the pillars which support delivery of our
purpose to emphasise our commitment to diversity, inclusion and the
environment. This includes introducing a new pillar "Caring for our
environment and ensuring sustainability for future generations".
This brings emphasis to our inter-generational commitment to longer
term sustainability to take account of the challenges we face as a
Society, in particular the need to protect and preserve our
environment, a key focus for us in 2022 and beyond.
We employ over 1,300 people and continuously invest in our
colleagues, creating opportunities for talented individuals from a
wide variety of backgrounds to succeed. We work with like-minded
partners who share our aim, not just to make a positive difference,
but to help create environments where people can overcome
disadvantage and ultimately thrive.
Using our 'always on' customer feedback tool, insight, and daily
conversations we try to anticipate our Members' needs, building
authentic relationships that stand the test of time.
Alert to the challenges faced by potential and existing home
owners, we innovate products and propositions to help people move
on and up the property ladder. We employ digital technology to
enhance choice and convenience, to support but not replace our face
to face, personal service. We develop supportive services in tune
with our customers' needs to help them through life's most
challenging moments. We make financial advice you can trust
accessible and convenient on the high street, available in a
network of 30 branches that come with a commitment to maintaining
and enhancing our high street presence.
We bring our communities with us. We share our success as part
of our shared future. Whether building our Newcastle Building
Society Community Fund at the Community Foundation to more than
GBP2.5m in value as a permanent legacy to support charities across
the region through grant funding; or the involvement of colleagues
in hundreds of local volunteering missions; or creating meaningful
career opportunities for talented individuals who may not otherwise
have had a chance; or providing our best (in some instances high
street market leading) savings rates to those in our heartland via
our branches; or helping people on to the housing ladder for the
first time, with innovative products such as Deposit Unlock and
First Homes.
This is what a purpose-led mutual business looks like; this has
driven our 2021 success.
Our financial performance
Our gross mortgage lending for the year was GBP861m (2020:
GBP645m) and our net core residential lending was GBP330m (2020:
GBP228m).
Group profit for the year before tax was GBP29.1m for the year
ended 31 December 2021, compared to GBP1.4m for 2020.
The business performed very well with a 91% increase in
operating profit before impairments and provisions of GBP13.6m
taking the total for the year to GBP28.5m (GBP14.9m in 2020). Key
underlying adjustments of GBP6.5m resulted in operating profit on
an underlying basis of GBP22.0m. (2020: GBP16.9m).
At 2020 year end, we reported a significant increase in our
credit and legacy provisions which resulted in a pre-tax profit of
GBP1.4m. During 2021 we have seen a write-back of impairment
charges on our residential and commercial books, reflecting a more
positive outlook. We continue to be watchful in this respect.
Impairment charges on property and equipment was GBP2.0m in 2021
(2020: GBP3.8m), relating to charges in relation to IT equipment
and leasehold property.
In addition to positive headlines in our financial performance,
we remain strongly capitalised and continue to operate with
appropriate levels of liquidity.
In comparison to the significant impairment and provisions for
2020 of GBP13.5m and as a result of the positive economic
environment, impairments and provisions were a write-back of
GBP0.6m for 2021.
Total operating income increased by 28% to GBP99.5m in 2021
(GBP77.7m in 2020). Offsetting income is overall management
expenses, which include business administration and depreciation
expenses. Management expenses increased to a cumulative GBP71.0m
from GBP62.8m in 2020, reflecting continued investment in our
colleagues and infrastructure during the year.
The Society's net interest margin increased to 1.21% from 1.04%
in 2020 and net interest income increased by GBP10.7m to GBP59.0m
(2020: GBP48.3m).
The Group's capital ratios remain robust with Common Equity Tier
1 ratio of 13.8% (2020: 14.1%) and Tier 1 ratio was 13.9% (2020:
14.4%). The Group complied with Individual Capital Guidance plus
capital buffers, as notified by the Prudential Regulation
Authority, throughout 2021.
The Society continued its focus on core residential lending
while winding down legacy portfolios. The net increase in customer
loans and advances was GBP228m overall in 2021 and included a
GBP330m net increase in core residential, of which GBP48m was in
buy to let, and a GBP102m reduction in our non-core legacy mortgage
portfolio.
The percentage of mortgages in arrears by three months or more
remains at low levels for 2021. Overall number of loans in arrears
have seen an increase of 0.06% to 0.42%.
The Group's liquidity, excluding encumbered assets, ended the
year at 17.1% compared to 19.1% in 2020. This is comfortably in
excess of the Society's minimum operating level.
In December 2021, we significantly increased our funding
capability and diversification as well as our access to both
external funding and government funding schemes. Through our newly
created Tyne Funding No. 1 plc. which utilises buy to let loans, we
completed and fully retained our first Residential Mortgage Backed
Securities (RMBS) issuance.
Continuing to build authentic relationships
Our continued prioritisation to provide good value products and
high standards of service to our customers, in branch, on the
phone, or when dealing with us online, has seen us deliver an
outstanding year.
I'm extremely pleased that our 2021 customer satisfaction score
of 95% has matched our previous year's high (2020: 95%). We further
improved our 2021 net promoter score (NPS) to +82, an increase of 4
points on an already impressive score of +78 in 2020. NPS measures
the strength of our customer relationships and is driven by the
quality and value our colleagues deliver. NPS scores can range from
-100 to +100.
Our continuous online and mobile 'Customer Voice' survey
provides valuable, real time feedback, which is shared across all
levels of the business. We supplemented this in 2021 with the
introduction of a dedicated online customer panel, 'Connected
Communities'. Connected Communities has already become a vibrant
means by which Members provide valuable thoughts, views and
feedback on a range of topics, and share insights and information
with each other and with us. Members who would like to sign up to
be part of Connected Communities, can find more information on our
website.
Helping people save and plan their finances
Our subsidiary, Newcastle Financial Advisers Limited, which
provides financial advice across our branch locations, experienced
another strong year for new investments. The team of professional
advisers, located in each of the network of branches across the
region, delivered 7,000 customer advice journeys to enable
customers to make the most of their money.
Despite the pandemic challenges of face to face meetings in the
first half of the year, a customer survey (Ongoing Service Survey,
October 2021) demonstrated advisers had contact with 88% of
existing customers in the last 12 months. Customers value the
service highly and are happy to refer onto family and friends, with
the subsidiary achieving a customer NPS of +91.
Newcastle Financial Advisers also runs Academy, its training
programme (in association with Openwork), as part of a commitment
to recruit and skill the next generation of professional
advisers.
Despite the ongoing national trend of bank branch closures, we
believe in the value of face to face customer contact and
maintaining a physical presence within the communities we serve. We
remain committed to our high streets and continue to invest in our
branch network, as well as new digital technologies. Looking after
our customers means being available to them and making it easy for
them to interact with us in the way they choose.
We remained 'open for business' throughout the pandemic. We have
maintained a full branch operation including access to cash, which
was vital for some of our most vulnerable customers.
After a Covid-enforced pause, we also re-commenced our
multi-million pound branch investment programme. This saw our West
Denton branch relocate to a more convenient and prominent location
in the Denton Park Centre. A dedicated community room forms part of
the new design and is available for local people and community
groups to use free of charge.
We also began work on a full refurbishment of our branch in
Bishop Auckland, which will relaunch in early 2022. Our plans to
open a brand new community branch in the library in Tynemouth are
progressing and we continue to discuss other partnership
opportunities across our network that align with our strategy and
future plans.
Early in 2021 we moved out of our Newcastle city centre head
office location, reducing our administrative building footprint
from two to one. As part of this head office change we had to close
our Portland House branch, which was integrated into the main
building. Branch customers were given a warm welcome at the nearby
Northumberland Street branch.
We continued to offer significantly better than UK average
savings interest rates - paying an average rate across our products
of 0.71% versus a whole of market average of 0.27%. (Based on
CACI's Current Account and Savings Database as at October
2021).
We also launched a 2% Regular Saver, which proved very
attractive to Members in the current low rate environment, and
which attracted new Members to save with us through our branch
network.
While the Bank of England base rate remained at an historic low
of 0.1% for much of 2021, a late December increase took it to
0.25%. Your Society passed on the rate increase in full in January
2022 to 97% of Members with a variable rate savings product.
Innovating
Helping people own their own home
Our gross mortgage lending in 2021 was GBP861m (2020: GBP645m)
with net core lending at GBP330m (GBP228m in 2020) and we welcomed
5,300 (2020: 5,206) new mortgage customers to the Society.
2021 was a year of innovation for us in the mortgage space. For
a number of years house prices across the country have continued to
rise, while wages haven't kept pace. Achieving the dream of home
ownership without family or other financial assistance can seem out
of reach when a large deposit is required. This impacts both first
time buyers and low deposit, next time buyers. But our
participation in launching two new innovative mortgage support
schemes this year has provided some assistance.
First Homes: We announced our participation in the
government-led 'First Homes' scheme which helps local first-time
buyers - particularly key workers such as NHS staff and armed
forces veterans - onto the property ladder by offering homes at a
discount of at least 30% compared to the market price.
A proportion of new homes are made available on new home
developments under the First Homes scheme, with a minimum 30%
discount on the open market value, which will be passed on with the
sale of the property to future first-time buyers. This means homes
will always be sold below market value and local communities will
benefit from easier access to them for generations to come. A
number of developments across the country are now running the
scheme.
Deposit Unlock : One area of the market particularly challenging
for buyers is purchasing a new build home with a small (5%)
deposit, as most lenders don't offer high loan to value lending on
a new build mortgage. We were therefore delighted to announce
'Deposit Unlock' earlier this year, an innovative new build
mortgage product which helps those with a small deposit to realise
their dream of owning a new build home.
We helped develop this 'first' for the UK in collaboration with
insurance broker, Gallagher Re, The Home Builders Federation and
four of its members. Newcastle Building Society was the first
lender to offer mortgages under this arrangement, initially as part
of a regional pilot, and was also the first to offer Deposit Unlock
on a national basis. A number of young buyers are now on their home
owning journey as a result.
We supported these national 'firsts' with other mortgage moves
specifically designed to improve access and affordability for
borrowers.
- We re-introduced 90% and 95% loan to value lending
- We extended the availability of our Self Build and Custom
Build mortgages, increasing the loan to value cap to 85%
- We re-introduced our Help to Buy range, including a unique
re-mortgage product for customers who are in a position to repay
their equity loan to do so and consolidate this to their existing
mortgage
- We re-introduced and enhanced our Large Loan proposition to
support higher earning professional customers with enhanced income
multiples and increased loan amounts.
The financial support package for home buyers set out by the FCA
in response to the pandemic, the Covid-19 payment deferral scheme,
ended in October 2021. Through participation in this we helped over
4,500 borrowers experiencing financial difficulties as a result of
the pandemic, allowing payment deferrals of up to 6 months. We're
pleased that 99% of borrowers who requested a payment deferral have
since returned to normal monthly payments.
Investing
In addition to providing a market leading outsourced savings
management service, our subsidiary Newcastle Strategic Solutions
Limited also serves the Group's technology needs. Investment is
ongoing in the Group technology infrastructure to strengthen and
enhance resilience and performance, build greater business
flexibility, and adapt to changing propositions while delivering
value for clients and customers.
We have invested in capacity and capability across IT, risk and
compliance, financial crime, and the Group's IT security. Our
technology infrastructure has also received investment to support
current remote working requirements and our future desired state,
along with the people and talent required to deliver it.
We are investing in modern workplace technology in our head
office, along with the latest in laptop performance and enhanced
connectivity. Work has also commenced to update our savings and
mortgage platforms with a digital, customer-centred design
approach. This follows the successful introduction of our Mortgage
Renewal Online Portal, which enables mortgage customers to renew
their mortgage conveniently online.
Newcastle Strategic Solutions manages savings accounts on behalf
of some of the UK's leading savings providers, supporting UK banks
and building societies looking to launch or grow their savings
operations, or transform the management of their existing
portfolio. During 2021 Solutions achieved record balances under
administration and has built a strong pipeline of new business into
2022, while retaining all its existing clients.
We continue to develop our mobile app which is available to our
Solutions' clients and in the latter part of the year, Solutions
also successfully launched an online business savings account for
small and medium sized businesses. This new saving product
capability has already been taken up by new client, Recognise Bank,
and by the Society.
Over the past 12 months 21 awards have been secured by clients
of the subsidiary, supported by the servicing operations of
Newcastle Strategic Solutions.
Building Employability
For more than two years now, we have focused our efforts on
supporting employability across our region in response both to the
challenges of the pandemic and wider economic inequalities.
Great place to work
Being a great place to work continues to feature strongly in our
thinking, in the authentic relationships we build with customers
and clients; the talent we nurture; the leadership and creativity
we foster and in the communities we serve.
Our People Strategy focuses on creating a healthy and
sustainable culture, connecting our colleagues with our purpose,
strategy, values and behaviours; providing an inclusive environment
where colleagues have a sense of belonging and do their best work;
and creating ways of working to drive engagement and operational
effectiveness.
Attracting and growing the right talent is key to ensuring the
long term success of your Society. Sitting alongside this is our
desire to develop a high performance environment where colleagues
own their own performance, take accountability for delivery and are
rewarded and celebrated for their contribution.
Your Society continues to create career advancement and
opportunities for continued development for colleagues. This is
against a backdrop of Society growth and success necessitating new
roles.
We made a significant step forward in our pay position with a
move ahead of the market in April, recognising both the
organisation's ongoing success and the competitive nature of the
wider labour market. Recognising their hard work and contribution
in such another challenging year, we made an additional recognition
payment to all colleagues other than executives in December.
Our apprentice programme continues to thrive and is fit to take
a much more prominent role in our recruitment, talent and
succession strategy. We had four apprentices shortlisted in the
regional final of the national apprentice awards and were
recognised for the third year running when our South Shields branch
customer advisor apprentice, Eryn Wood, won the North East
Apprentice of the Year 2021.
In the last four years we have created 38 apprenticeship routes
to permanent employment, including five new apprentices who joined
us this year. Our ambition next year is to bring 25% of new
colleagues in through our early talent programme. Our early talent
pool includes the opportunity to join us via apprenticeships,
graduate roles, and student placements, in addition to a ring
fenced Prince's Trust apprenticeship and a ring fenced Newcastle
United Foundation's NU: Futures Programme apprenticeship.
We work hard to build a great experience for our new joiners and
were therefore proud to make the 'Rate my Placement' Top 50
Employer list for the third year running. This year we entered the
top 10 for the first time.
We continue to support the Common Purpose Young Leader
programmes which supports young people in the UK to develop their
leadership skills. Five of our own young leaders have attended the
programme this year, along with two young people from the
NU:Futures Programme.
We also achieved the goal we set for the Women in Finance
Charter of achieving 40% females in senior management ahead of our
original target of 2023 and are now working towards gender
parity.
In line with colleague feedback, we made the decision that
hybrid working would be our preferred future working model. As part
of this arrangement, our base assumption is that full time
colleagues will spend two days a week in our head office
environment and three days working from home.
During 2021, following the sale of our Portland House office
building, we re-located our head office to a property we already
owned and occupied at Cobalt Park, North Tyneside. The
transformation of our new head office building provides an
opportunity for us to embed an environmentally friendly approach
and practice. Investing in our shared future to reduce our carbon
footprint has also included the introduction of an electric vehicle
leasing scheme as a colleague benefit and we are committed to
launching a cycle to work scheme when colleagues return to regular
office-based working.
This change in location has provided an opportunity for us to
introduce new workspace concepts, to encourage easier collaboration
and provide efficient use of space. We are taking advantage of this
opportunity to fully digitise the way we work in the office, in how
we interact with our workspace, for example to book meeting rooms
or hot desks, and in seamlessly connecting those in physical
meetings with remote meeting participants.
We consider the benefits of the time that colleagues will spend
together in the office makes a vital contribution to our culture of
connection and to delivering our purpose with impact.
Our eNPS, which measures our employee net promoter score, or how
likely our colleagues are to recommend Newcastle Building Society
is in the top 25% of the global finance sector at +43. Our
apprentice eNPS is +90, which is 50 above the benchmark.
Partnerships & Grants
Our commitment is to support talent and success from a diverse
range of backgrounds. One of the ways we do this is through our
active community partnerships, which include the Newcastle United
Foundation, and The Prince's Trust. We have also focused a
significant portion of our community grants towards employability
support activities within grass roots charities.
Following the launch of our GBP1.1m partnership with the
Newcastle United Foundation last year to deliver 'NUCASTLE powered
by Newcastle Building Society', a new-build community hub for
sports, education and wellbeing, significant progress has been made
in its construction. We witnessed the first local youngsters trying
out the rooftop pitch in October, ahead of the planned launch in
March 2022, which will dramatically expand opportunities for local
people.
Delivery of our joint programmes - Newcastle United Foundation's
NU:Futures and the Prince's Trust Team programme - continued
despite the challenges of remote delivery required in lockdown.
Career advice and other information sessions, including financial
education, have been consistently delivered, thanks to the
commitment of our colleagues from our branch network and across our
Society.
Recognising that the pandemic has brought significant challenge
to our communities, our grant giving programme through the
Newcastle Building Society Community Fund at the Community
Foundation Tyne & Wear and Northumberland was refocused to
support Covid-19 recovery.
The Newcastle Building Society Community Fund grants are
providing ongoing support to programmes delivering employability
skills and experience; addressing food poverty; and helping with
debt management. In 2021 we provided GBP185,000 in support grants
across these areas of focus.
Our total community contributions this year, made up of grants,
match funding, and our ongoing partnership donations, was more than
GBP750,000. Through these various activities we have positively
impacted over 21,700 people of all ages in our region in the past
year.
Again, despite the challenges of working remotely, our colleague
fundraising surpassed the previous year's total at GBP14,772
(GBP16,129.88 including match funding) raised through a combination
of Give as you Earn, fund raising days and a variety of other fund
raising activities.
Wider community
Colleague volunteering continues to be a fundamental way we
support our communities. In 2020 we worked with tech for good
business, onHand and the National Innovation Centre for Ageing to
roll out an innovative volunteering app across our region. In 2021,
through this and other volunteering commitments, colleagues have
delivered more than 400 days of support to our communities -whether
through befriending calls, shop drops, prescription collections,
sports coaching and a variety of other activities. Our work with
onHand has also meant that over 3,200 trees were planted on our
behalf in 2021, aligned to our levels of volunteering.
Summary and Look Ahead
I am delighted with how our colleagues have responded to the
many and unique challenges of 2021, the progress we've made
together towards our strategic goals and the sustained impact
across all aspects of our purpose. Once again I offer my personal
thanks for our colleagues' continued support and tireless efforts
on behalf of our customers and clients - I feel truly privileged to
lead this remarkable team. I also thank our Members for their
continued support and their fantastic engagement with the
Society.
The combined commitment and participation of colleagues, Members
and communities has not only delivered a highly successful
financial year, it has put us in a strong position for 2022. While
we all remain hopeful that 2022 will be the year when we see the
Covid-19 pandemic reduce its impact on our day to day lives, it is
clear that our customers and communities will face many new
challenges in the years ahead and internationally, events in
Ukraine are a new source of concern for all. However, the resolve
and determination of our colleague team, along with our investment
in the Society's capabilities and infrastructure, will ensure we
can continue to be there for our Members in the ways and places
they need us to be. We will continue to compete with the best; and
in so doing, deliver a stand out regional building society,
committed to delivering its purpose and serving its Members within
and beyond our region.
Andrew Haigh
Chief Executive
1 March 2022
NEWCASTLE BUILDING SOCIETY
PRELIMINARY ANNOUNCEMENT
for the year ended 31 December 2021
SUMMARY CONSOLIDATED INCOME STATEMENTS
2021 2020
restated
GBPm GBPm
Interest receivable and similar income
Interest income calculated using effective interest rate 92.0 91.6
Interest recognised in respect of insurance contracts 11.9 12.7
Net expense on derivatives hedging mortgage assets (13.1) (13.3)
------- -----------
Total Interest receivable and similar income 90.8 91.0
Interest payable and similar charges (31.8) (42.7)
Net interest income 59.0 48.3
Other income and charges 45.7 39.7
Gains less losses on financial instruments and hedge accounting (5.2) (10.3)
Administrative expenses (65.8) (57.9)
Depreciation and amortisation (5.2) (4.9)
Operating profit before impairments and provisions 28.5 14.9
Impairment reversals / (charges) on loans and advances to customers 2.8 (9.6)
Impairment of tangible and intangible assets (2.0) (3.8)
Provisions for liabilities and charges (0.2) (0.1)
Profit for the year before taxation 29.1 1.4
Taxation expense (5.2) (0.3)
Profit after taxation for the financial year 23.9 1.1
======= ===========
SUMMARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
2021 2020
restated
GBPm GBPm
Profit for the financial year 23.9 1.1
------ ---------
Other comprehensive income:
Items that may be reclassified to income statement
Movement on fair value of debt securities through
other comprehensive income (0.2) 0.6
Income tax on items that may be reclassified to income
statement 0.3 (0.2)
Total items that may be reclassified to income statement 0.1 0.4
------ ---------
Items that will not be reclassified to income statement
Post-retirement defined benefit remeasurements - (0.2)
Other non-classified items - 0.1
Total items that will not be reclassified to income
statement - (0.1)
------ ---------
Total comprehensive income for the financial year 24.0 1.4
====== =========
SUMMARY CONSOLIDATED BALANCE SHEETS
2021 2020
restated
ASSETS GBPm GBPm
Liquid assets 956.4 1,109.7
Derivative financial instruments 14.5 -
Loans and advances to customers 3,794.5 3,567.1
Fair value adjustments for hedged risk 62.1 116.1
Non-current assets available for sale 2.4 4.9
Intangible assets 7.5 5.7
Property, plant and equipment 31.0 34.8
Fixed and other assets 26.0 19.1
TOTAL ASSETS 4,894.4 4,857.4
=========== ===========
LIABILITIES
Shares 3,731.8 3,776.3
Deposits and debt securities 746.7 628.0
Derivative financial instruments 147.6 214.3
Other liabilities 24.2 18.7
Subscribed capital 20.0 20.0
Reserves 224.1 200.1
TOTAL LIABILITIES 4,894.4 4,857.4
=========== ===========
SUMMARY CONSOLIDATED CASH FLOW STATEMENTS
2021 2020
restated
GBPm GBPm
Net cash (outflows) / inflows from operating activities (62.6) 227.3
Corporation tax paid (4.4) (2.2)
Payment into defined benefit pension scheme - (0.2)
---------- ----------
Cash (outflows) / inflows from operating activities (67.0) 224.9
---------- ----------
Cash (outflows) / inflows from investing activities
Purchase of property, plant and equipment (7.7) (5.6)
Sale of property, plant and equipment 4.9 -
Purchase of investment securities (106.6) (110.7)
Sale and maturity of investment securities 84.6 158.8
---------- ----------
Net cash (outflows) / inflows from investing activities (24.8) 42.5
---------- ----------
Cash outflows from financing activities
Interest paid on subscribed capital (2.3) (2.3)
Payments for finance lease arrangements (1.2) (1.2)
Net cash outflows from financing activities (3.5) (3.5)
---------- ----------
Net (decrease) / increase in cash (95.3) 263.9
Cash and cash equivalents at start of year 490.3 226.4
---------- ----------
Cash and cash equivalents at end of year 395.0 490.3
========== ==========
Summary of key financial ratios 2021 2020
% %
Gross capital as a percentage of shares and borrowings 5.45 5.17
Liquid assets as a percentage of shares and borrowings 21.36 25.20
Profit for the year as a percentage of mean total assets 0.49 0.03
Management expenses for the year as a percentage of mean total assets 1.45 1.35
Notes
1. The financial information set out above, which was approved
by the Board of Directors on 1 March 2022, does not constitute
accounts within the meaning of the Building Societies Act 1986.
2. The financial information for the years ended 31 December
2021 and 31 December 2020 has been extracted from the Accounts for
those years and on which the auditors have given an unqualified
opinion.
3. 2020 comparatives were restated for a change in accounting
policy in relation to Insurance Contracts. Further details can be
found in note 35 of the Annual Report and Accounts which will be
available from 23 March 2022.
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END
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March 02, 2022 06:26 ET (11:26 GMT)
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