Last checked at 7 Mar 2024 08:00
Nottingham Building Society Results for the year ended 31st December 2023
The Nottingham delivers a positive financial performance for the year ended 31st December 2023, achieving growth in mortgage lending in a challenging economic environment as it continues its transformation plan
Key Performance Indicators ('KPIs') The KPIs disclosed below are based on the position at 31st December or for the 12-month period ended 31st December, unless otherwise stated. The average Liquidity Coverage Ratio ('LCR') represents a 12-month average for the year ended 31st December 2023. · £887m gross new lending (2022: £659m), representing an increase of £228m; · £3.6bn total mortgage assets (2022: £3.0bn), being growth of £0.6bn; · 6,957 new mortgage customers (2022: 3,984), an increase of 74.6%; · £3.6bn total savings balance (2022: £3.0bn), an uplift of £0.6bn; · £91.8m total interest paid to savers (2022: £23.9m), an increase of £67.9m; · £8.3m profit before tax (2022: £18.9m), representing a decrease of £10.6m; · £24.2m underlying profit before tax (2022: £15.2m), representing an increase of £9.0m; · 1.94% net interest margin (2022: 1.69%), being an absolute increase of 0.25%; · 84.6% cost : income ratio (2022: 71.7%), an increase of 12.9%; · 70.5% underlying cost : income ratio (2022: 73.0%), a reduction of 2.5%; · ECL coverage ratio of 15bps (2022: 17bps), a decrease of 2bps; · The Nottingham continues to benefit from a robust capital / liquidity base, demonstrated by: o 15.2% CET1 ratio (2022: 16.8%); o 5.2% Leverage ratio (2022: 5.6%); o 184% average LCR (2022: 192%); · 4.9 Trustpilot score (2022: 3.8); · 64.6% net promoter score (2022: 64.7%); and · 2,462 colleague volunteering hours (2022: 841)
Sue Hayes, Chief Executive Officer ('CEO') of The Nottingham, commented on the results:
"I am pleased to report our financial results for 2023 alongside the progress towards delivering our strategy. Our financial performance in 2023 was strong, with profit before tax of £8.3m (2022: £18.9m), an underlying profit before tax of £24.2m (2022: £15.2m) and an 18.3% increase in mortgage balances compared with 2022. We achieved significant growth in mortgage lending while overall lending in the UK mortgage market fell. We helped 6,957 (2022: 3,984) customers either take out a mortgage with us for the first time or move to a new mortgage.
We achieved good growth in our savings balances of 18.3%. We diversified our proposition to offer a variety of attractive products and savings rates to our customers via our branch network and online savings app. As interest rates have risen and remained high throughout this year, we have focused on paying savers the best rates we can whilst doing what we need to strengthen the Society. We paid a total of £91.8m in interest to savers in 2023 (2022: £23.9m).
I am proud of the results we are sharing today and would like to thank our members, and each one of our dedicated colleagues, for their continued trust in the Society. We look ahead to the coming years with a renewed sense of focus, guided by a clear and impactful purpose, with mutuality as our bedrock.
Looking to the future, we will continue to monitor the impact of movements in base rate on our mortgage and savings propositions, while focusing on innovation in our products as part of our ongoing transformation journey. We will also continue to support our saver members with attractive savings propositions."
Sue Hayes Chief Executive Officer 6th March 2024
|
| |||||||
Consolidated income statement for the year ended 31 December 2023 | 2023 |
| 2022 | |||||
£m |
| £m | ||||||
Interest receivable and similar income | 205.5 | 98.8 | ||||||
Interest payable and similar charges | (125.2) | (36.0) | ||||||
Net interest income |
|
|
|
| 80.3 |
| 62.8 | |
Fees and commissions receivable | 2.5 | 3.1 | ||||||
Fees and commissions payable | 0.4 | (1.5) | ||||||
Net (losses) / gains from derivative financial instruments | (14.2) | 10.2 | ||||||
Total net income |
|
|
|
| 69.0 |
| 74.6 | |
Administrative expenses | (52.3) | (42.8) | ||||||
Depreciation and amortisation | (6.7) | (10.7) | ||||||
Operating profit before impairment and losses on disposal of treasury assets |
|
|
|
| 10.0 |
| 21.1 | |
Impairment credit / (charge) - loans and advances to customers | 0.1 | (2.2) | ||||||
Loss on disposal of treasury assets | (1.8) | - | ||||||
Profit before tax | 8.3 |
| 18.9 | |||||
Tax charge | - | (3.1) | ||||||
Profit after tax for the financial year | 8.3 |
| 15.8 | |||||
Reconciliation to underlying profit before tax | 2023 | 2022 | ||||||
| £m | £m | ||||||
Profit before tax | 8.3 |
| 18.9 | |||||
Losses / (gains) from derivative financial instruments | 14.2 | (10.2) | ||||||
Net strategic investment costs | 0.2 | 5.0 | ||||||
Other | 0.5 | - | ||||||
Change in accounting estimates | (0.8) | 1.5 | ||||||
Loss on disposal of treasury assets | 1.8 | - | ||||||
Underlying profit before tax |
|
|
|
| 24.2 |
| 15.2 | |
Consolidated statement of comprehensive income for the year ended 31 December 2023 | 2023 | 2022 | ||||||
| £m | £m | ||||||
Profit for the financial year | 8.3 |
| 15.8 | |||||
Items that will not be re-classified to the income statement | ||||||||
Remeasurements of defined benefit obligations | 0.1 | 0.1 | ||||||
Tax on items that will not be re-classified | (0.1) | (0.1) | ||||||
Items that may subsequently be re-classified to the income statement | ||||||||
Valuation gains / (losses) taken to reserves | 2.8 | (4.1) | ||||||
Loss on disposal of treasury assets taken to income statement | 1.8 | - | ||||||
Tax on items that may subsequently be re-classified | (1.0) | 0.8 | ||||||
Other comprehensive income/(expense) for the year net of income tax | 3.6 |
| (3.3) | |||||
Total comprehensive income for the year |
|
|
|
| 11.9 |
| 12.5 | |
Consolidated statement of financial position as at 31 December 2023 | 2023 | 2022 | |
£m |
| £m | |
Assets | |||
Liquid assets | 801.3 | 719.3 | |
Derivative financial instruments | 105.2 | 142.6 | |
Loans and advances to customers | 3,543.9 | 2,922.8 | |
Fixed and other assets | 24.5 | 27.8 | |
Total assets | 4,474.9 |
| 3,812.5 |
Liabilities | |||
Shares | 3,565.9 | 3,009.7 | |
Wholesale funding | 583.1 | 518.4 | |
Derivative financial instruments | 43.9 | 14.4 | |
Other liabilities | 14.5 | 14.4 | |
Subscribed capital | 24.0 | 24.0 | |
Total liabilities | 4,231.4 |
| 3,580.9 |
Reserves | |||
General reserves | 243.3 | 235.0 | |
Fair value reserves | 0.2 | (3.4) | |
Total reserves attributable to members of the Society | 243.5 |
| 231.6 |
Total reserves and liabilities | 4,474.9 |
| 3,812.5 |
Consolidated statement of changes in members' interests as at 31 December 2023 |
|
| General reserve |
| FVOCI reserve |
| Total |
|
| £m |
| £m |
| £m | |
Balance as at 1 January 2023 | 235.0 | (3.4) | 231.6 | ||||
Profit for the year | 8.3 | - | 8.3 | ||||
Other comprehensive income for the period (net of tax) | |||||||
Net gains from changes in fair value | - | 3.6 | 3.6 | ||||
Total other comprehensive income | - | 3.6 | 3.6 | ||||
Total comprehensive income for the period | 8.3 | 3.6 | 11.9 | ||||
Balance as at 31 December 2023 |
|
| 243.3 |
| 0.2 |
| 243.5 |
Balance as at 1 January 2022 | 219.2 | (0.1) | 219.1 | ||||
Profit for the year | 15.8 | - | 15.8 | ||||
Other comprehensive expense for the period (net of tax) | |||||||
Net losses from changes in fair value | - | (3.3) | (3.3) | ||||
Total comprehensive income / (expense) for the period | 15.8 | (3.3) | 12.5 | ||||
Balance as at 31 December 2022 |
|
| 235.0 |
| (3.4) |
| 231.6 |
Summary consolidated cash flow statement for the year ended 31 December 2023 | |||
| 2023 |
| 2022 |
£m |
| £m | |
Cash flows from operating activities | 18.9 | 34.3 | |
Changes in operating assets and liabilities | 55.7 | 132.8 | |
Net cash generated from operating activities | 74.6 |
| 167.1 |
Cash flows from investing activities | 74.7 | (159.2) | |
Cash flows from financing activities | (2.6) | (2.7) | |
Increase in cash and cash equivalents | 146.7 |
| 5.2 |
Cash and cash equivalents at beginning of year | 292.4 | 287.2 | |
Cash and cash equivalents at end of year | 439.1 |
| 292.4 |
Notes
The financial information set out above, which was approved by the Board of Directors on 6th March 2024, does not constitute accounts within the meaning of the Building Societies Act 1986.
The financial information for the years ended 31st December 2023 and 31st December 2022 has been extracted from the Accounts for those years and on which the auditors have given an unqualified opinion.