Record year for building society

Newcastle Building Society has reported record lendings for 2022 of £586 million.

Significant support was provided to Members, clients, and colleagues during a difficult year, which was achieved through the delivery of the Society’s Purpose to connect its communities with a better financial future. With strong growth across the Group, almost 200 new jobs were created through the year, taking colleague numbers to nearly 1,500.

In response to successive decisions by the Bank of England during 2022 to increase the base rate of interest, the Society increased rates on its variable rate savings book multiple times to provide Members with good and consistent value. In 2022, the Society welcomed more than 10,000 new Members to the Society through its savings product range.

In the 12 months to December 2022, the Society’s average savings book rate of 1.20% was materially higher than the market average of 0.66%, which equated to providing around £21m more in interest for its savers. As well as market-leading savings products, the Society continued to offer good value to borrowers. Throughout 2022, its Standard Variable Rate (SVR) was 0.42% lower than the market average, helping its SVR mortgage borrowers save more than half a million pounds in interest payments.

Vital support

With more than 5,600 new mortgage customers during 2022, the Society delivered record net core residential lending of £586m (£330m in 2021). Its focus on supporting first time buyers and borrowers with smaller deposits provided vital support in a rising rate environment and it continued to participate in two key mortgage support schemes; First Homes and Deposit Unlock.

The Society announced Group profit before tax of £31.7m for the year ended 31 December 2022, compared to £29.1m for 2021. Operating profit before writeback of impairments and provisions was £30.5m (£28.5m in 2021).

In August 2022, the Society announced it had entered into an exclusivity agreement with Manchester Building Society to explore the possibility of a merger by way of a transfer of Manchester Building Society’s engagements to Newcastle Building Society. Subsequently in February 2023, it entered into Heads of Terms with the expectation that subject to resolutions by the Boards of both building societies and regulatory approval, a merger will complete later in the year.

The Society continued to challenge national expectations and buck the trend of branch closures by opening its 31^st branch in Knaresborough, working in partnership with North Yorkshire County Council to locate a branch within the town’s library. Knaresborough is the Society’s latest community partnership branch, which involves the innovative use of shared spaces to restore access to financial services by co-locating with community services such as libraries.

Branch opportunities

This pioneering approach was extended with the addition of multi-bank kiosks in its branches in Gosforth and Knaresborough. The OneBanx kiosks enable personal and small business customers of any bank on the open banking network to pay in notes and coins and withdraw cash from their bank account using a mobile app. The use of this technology in a branch is a first, and a formula that could be adopted by financial services providers across the country in communities where banking services are being withdrawn.

Plans to open a new community branch in the refurbished Tynemouth library continue in partnership with North Tyneside council, with an anticipated opening due in 2024. The society continues to explore additional and innovative new branch opportunities in the north east with a view to expanding its physical presence.

Newcastle Building Society chief executive officer, Andrew Haigh said: “In the face of another challenging year and a volatile economic environment, the Society has delivered a set of robust results, and continues to demonstrate its resilience and agility. We’ve consistently delivered for our Members; offered good value to both savers and borrowers, continued to provide financial advice during a period when household budgets are under significant pressure, and pioneered ways to restore access to cash and face to face financial services in our communities.”