Newcastle Building Society praises ‘equitable approach’ as profits rise

A mutual has hailed its “responsibility to members” in “unpredictable market conditions” after greater support helped push customer numbers and earnings higher.

Newcastle Building Society saw half-year pre-tax profit rise to £16.2 million, with underlying operating profit also better off on a year ago at £15 million.

Bosses say the increases were fuelled by strong customer service, with savings rate lifts complemented by “good value” mortgage offers.

According to results released today (Wednesday, August 2), rises to savings products in the five months to the end of May equated to £11 million more interest for clients, with changes to its standard variable mortgage rate saving members nearly £336,000 in payments across June.

The latter helped the operator – which is a member of the Government’s Mortgage Charter that provides additional support around repayments – attract net core residential lending of £408 million in the half year to June 30, compared to the £181 million recorded 12 months ago.

Andrew Haigh [pictured, above], chief executive at the mutual, which created around 150 jobs in the period, taking its headcount to more than 1630, said he was proud of its progress.

He said: “Persistent inflation and the rising cost of living continues to present ongoing and difficult challenges for our communities, and the first half of the year has been shaped by unpredictable market conditions creating a complex trading environment.

“Our responsibility to members, communities and wider stakeholders is clear and as rates increase, we have been mindful of the need to find a fair, equitable and consistent approach in balancing increases in variable savings and variable mortgage rates.

“The fact we have attracted so many new customers demonstrates the value of that approach.

“Although the economic outlook remains uncertain, the business remains resilient and well-positioned to achieve further growth while supporting our customers and communities.”

Andrew added a previously-announced merger with Manchester Building Society has now been officially confirmed.