Final Results

31 Jan 2007 07:01

Portman Building Society31 January 2007 PORTMAN BUILDING SOCIETYPRESS RELEASEFor Immediate Release31 January 2007 PORTMAN ANNOUNCES OUTSTANDING 2006 ANNUAL RESULTS - TOTAL ASSETS INCREASED BY 20% - Portman Building Society today announces its annual results for 2006, revealingan outstanding year for members, with exceptional growth in assets, profit,residential lending and savings balances. In 2006, Portman Building Society achieved outstanding growth in assets, profitsand new customers. Key achievements: • Total assets increased by 20% to over £21 billion; • Record profit before tax of £93.7 million, £104.6 million underlying; • 10th consecutive year of profit growth; • New residential lending up 18% to £5 billion; • Savings balances up 18% to over £13 billion; • Some 70,000 new customers attracted to the Society, up 20%; • Completion of the merger with Lambeth Building Society; and • Announcement of a proposed merger with Nationwide Building Society. Commenting on the Group's performance, Portman Chief Executive Robert Sharpesaid: "2006 has been a year of outstanding success. Total assets increased by animpressive 20% to £21.3 billion, whilst profits grew to record levels. Inaddition, we completed a merger with Lambeth Building Society, consolidating ourposition as the third largest building society in the UK. At the same time, weoffered competitively priced products and maintained high levels of customerservice and satisfaction, resulting in an exceptional year for attracting newcustomers. "2006 represents Portman's 10th successive year of profit growth, withunderlying pre-tax profit reaching a record £104.6 million, up 23% on 2005. TheGroup's specialist lending subsidiary, The Mortgage Works, delivered recordpre-tax profit of £32.5 million, representing over 30% of the Group's underlyingpre-tax profit. The profits generated by this non-member specialist lendingsubsidiary enhance the Society's ability to deliver the benefits of mutuality tomembers through attractive product pricing. "The Society has recorded exceptional growth in both residential lending, withgross advances up 18% on the previous 2005 record, and retail savings, withbalances up an outstanding 18% to £13.4 billion. "We have also clearly answered those in the sector who have repeatedlyquestioned Portman's ability to generate profitable and aggressive growth. Ourstrategy of ensuring sufficient scale to accommodate a consistently attractivecustomer proposition has been an undoubted success. "The achievements of 2006 are a continuation of Portman's outstandingtrack-record. Over the last five years the Society has achieved average annualgrowth of: • 19% in total assets, with assets doubling in size since 2002; • 15% in savings balances; • 20% in residential mortgages; and • 12% in underlying profit before tax. "In September 2006, the Portman Board announced its decision to recommend tomembers a merger with Nationwide Building Society, which, if approved by Portmanmembers at the Annual General Meeting on 23 April and confirmed by the FinancialServices Authority, will be the largest building society merger ever undertaken,with a substantial distribution of reserves to qualifying Portman members. Oncethe two organisations have been integrated, the substantial economies of scalewhich the Portman Board expects to be achieved will support attractive productpricing for members, who will also have access to a wider range of distributionchannels, including a greatly expanded branch network. "2007 will be a challenging year for the Society, as we maintain our commitmentto meeting the needs of members by delivering attractive products and excellentservice, whilst carrying out the extensive planning and integration activityrequired to complete the proposed merger with Nationwide Building Society. I amconfident that the Portman Group will rise to the challenge of ensuring that themerger, if approved, proceeds smoothly.", Sharpe concluded. Business highlights: Mortgages Supported by the unexpectedly buoyant housing market in 2006 and driven bymarket-leading pricing and innovative product design, gross mortgage lendingincreased 18% on 2005, reaching £5 billion. Residential mortgage balancesincreased by 19% to £16.1 billion. Portman was recognised for the quality of itsmortgage offering through a number of industry awards. Savings Despite an intensely competitive retail savings market, the Society recorded anexcellent performance, with savings balances growing 18% to £13.4 billion. Thehighly competitive 15 day notice ISA and niche accounts, such as the age 50 plusfixed interest bond and the age 60 plus income bond, helped to attract newcustomers and benefited existing account holders. During the year, over 23,000Portman members opened a Members' Loyalty account, which offered a three yearguaranteed link to the Bank of England base rate. The Mortgage Works The Mortgage Works continued to strengthen its position in the buy-to-let andnon-prime mortgage markets, with mortgage balances exceeding £4 billion at theend of 2006. The pre-tax profit contributed by the specialist lending subsidiarywas up 30% on 2005, at £32.5 million. Since it was acquired by Portman in 2001,The Mortgage Works has achieved average profit growth of 24% per annum. -ENDS- Editor's notes: • The 2006 Annual Results, which have been prepared under International Financial Reporting Standards (IFRS), accompany this press release. To access, click or copy the following link into your web browser. http://www.rns-pdf.londonstockexchange.com/rns/3906q_-2007-1-30.pdf • Portman Group consists of: i. Portman Building Society is the third largest UK building society and 13th largest UK mortgage lender. In the period 2000 to 2005, Portman was the fastest growing top ten building society in terms of total assets. The Group has total assets of over £21 billion and employs over 2,500 staff, serving 1.8 million members. Portman has a network of 149 branches. Its Head Office is in Bournemouth and it has an administration centre in Wolverhampton. ii. The Mortgage Works (UK) plc is a specialist mortgage lender which has been operating in the UK mortgage market for the last 16 years. Its product range, available through brokers, includes self-certification, buy-to-let and sub-prime. iii. Portman Channel Islands Ltd is based in the Bailiwick of Guernsey and, as the offshore deposit taking subsidiary of Portman Building Society, offers a safe home for its investors' money together with friendly and efficient service. Further comment from the Society's Executive Team on the annual results can bearranged by contacting the Press Office. A selection of photographs is alsoavailable. Readers requiring further information about any of the products or servicesoffered by the Portman Group should visit their local branch of Portman or call0845 60 90 600 for details. Information can also be found by logging ontowww.portman.co.uk Journalists requiring further information please contact: Nicki GreenPress Officer01202 562256 This information is provided by RNS The company news service from the London Stock Exchange