Nottingham’s profits fall back from record 2015 levels

Nottingham’s profits fall back from record 2015 levels

The Nottingham Building Society has seen overall gross lending increase to £409m during the first half of this year - compared to £268m at June 2015 - resulting in a 4.6 per cent increase to mortgage assets.

This led to a group pre-tax profit of £7.1m and total assets up 4 per cent to £3.45bn.

However, chief executive David Marlow admitted that as anticipated in the 2015 annual report, profit levels are lower than last year, when a record level of profit before tax (up 15 per cent at £20m) was delivered.

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He explained the board has looked to finely balance the conflicting needs of savings and mortgage customers, with a focus on ensuring levels of profitability help strengthen the capital base.

“Our level of profitability in 2016 will be more than sufficient to achieve these objectives,” he promised.

“Our strategy is focused on providing our members access to first class building society services, whole-of-market mortgage and financial advice and estate agency services all under one roof from a source that they can trust; something that is increasingly hard to find on high streets across our heartland.”

This time last year, the society reported gross mortgage lending down by 22.5 per cent, although pre-tax profits grew from £8.9m to £9.3m during the first half of 2015.

During the first half of 2016, the society added another new location, Belper, to its network and plans are well advanced for a further four new branches to be added by the end of the year.

The branch network will have increased from 31 locations in 2013 to 60 by the end of this year, across nine counties.

Also during the first six months, the Nottingham invested more than £1m in its improvement programme, aimed at improving infrastructure and “implement a number of staff development initiatives”.

Mr Marlow also commented on the landscape post Brexit, stating the economic and political fallout is causing uncertainty in the financial and housing markets, although it is too early to ascertain the full impact.

“However, as we are a UK-based organisation with no members’ money invested in Eurozone countries and no direct currency exposure, our focus will be sharply on the wellbeing of the UK economy,” he stated.

“The low interest rate environment is likely to remain with us for some time yet, with an increasing likelihood that bank base rates could get even closer to 0 per cent in the coming months.

“Inevitably this will continue to challenge us to strike the appropriate balance between our savers and borrowers in an extremely competitive market, with mortgage rates now at an all-time low.”