Final Results

Manchester Building Society

Results for the Financial Year Ended 31 December 2012

Manchester Building Society Group ("the Society") today releases its financial results for the year ended 31 December 2012.

Key points

·; Profit before tax excluding fair value adjustments of £1.9m (2011 restated: £1.6m)

·; Loss before tax including fair value adjustments of (£2.3m) (2011 restated: (£21.9m))

·; New capital issuance of £18m of Profit Participating Deferred Shares completed

As announced on 8 April 2013, the Society decided to alter the accounting treatment of its long-term mortgage book and related interest rate hedges under IAS39. This change in accounting treatment and the fair value adjustments have led to a downward restatement of the Society's 2011 retained earnings by £28.7m to £9.7m as a result of the restated 2011 pre-tax loss of £21.9m. The change has also resulted in a 2012 pre-tax loss of £2.3m.

Whilst the change in accounting treatment has resulted in an overall loss being recorded, the Society increased its trading profit in 2012 by £0.3m to £1.9m.

The private placement of £18 million of Profit Participating Deferred Shares ("PPDS"), also announced on 8 April, has been completed and this ensures the Society continues to have a sound capital base following the restatement of reserves referred to above.

The Society will publish its full report and accounts for the year ended 31 December 2012 by the end of May 2013 and hold its Annual General Meeting by the end of June 2013.

The Society is also announcing that Chief Executive David Cowie (61) has informed the Board of his decision to retire from the Society on 5 June 2013 after 24 years of service, including 12 as Chief Executive. The Society will shortly commence a search for a new Chief Executive.

David Harding, Chairman of the Society, said: 

"The Society delivered an increased level of underlying profitability in 2012; however, as a result of the decision to change the accounting treatment of the long-term mortgage book there has been a material restatement of the Society's opening reserves and an accounting loss for 2012. The £18m of new capital raised through the private placement of PPDS means that the Society maintains a sound capital position, and we will look to strengthen this further over time.

The Board's focus for 2013 will be ensuring we continue to serve our members effectively in this low interest rate environment with a comprehensive range of savings and mortgage products.

The Board would like to thank David Cowie for his 24 years of service to the Society and wishes him well in his retirement."

Enquiries

Chris Gee

0161 923 8023

Finance Director

Key Financial Information

* excludes 2011 profit on disposal of subsidiary of £6.0m

Notes to Editors:

·; Manchester Building Society is the UK's 16th largest building society.

·; Based in Manchester City Centre, the Society has over 29,000 investing members and 5,700 borrowing members.

·; Manchester Building Society provides a range of individually underwritten residential mortgages, comprising discounted variable rates, fixed rates, and an Offset discounted rate. It also offers a range of BTL discounted variable rate and fixed rate mortgage products.

·; Manchester Building Society regularly features in the "best buy" tables for its mortgage and retail savings products.

·; Profit before tax excluding fair value adjustments shows the Society's profit before tax less fair value movements on swaps.