The boss of Newcastle Building Society has says its latest half yearly results represent a “strong set of numbers” despite significant economic uncertainty.
Gross mortgage lending in the six months to the end of June was £448m, down from £483m in the the same period of 2021. Underlying operating profit increased to £14.2m from £13.3m but pre-tax profit was down from £15.9m to £14.2m.
Speaking to Business Live about mortgage lending levels, chief executive Andrew Haigh said: “We had a very strong run in the first half of last year and it’s just behaved slightly differently. Actually demand is still very strong. It’s just a little bit of a timing issue more than anything else. The property market is still very, very active.”
He added: “There are lots of things out there causing people concern: energy prices, inflation and so on. But we’re seeing a property market that is strong. There’s still a lack of supply which is keeping prices up and the re-mortgage market will be strong with people looking to find the right value for them.”
Mortgage arrears remained low at 0.38%, a proportion the society said demonstrated the consistent quality of its lending. Across the full year 2021 arrears had been 0.42%.
On savings, Mr Haigh said all indicators pointed to further bank base rate increases and therefore enhanced rates for savers. He said the society had tried hard to balance good rates for savings customers and the competitive rates for borrowers.
And through a multimillion-pound programme that bucks the national trend for the withdrawal of lenders from high street locations, Newcastle Building Society has made progress on new branch openings. Its Knaresborough hub – in a space shared with the town’s library – opened earlier and a similar branch is expected to open in Tynemouth.
On recent visit to the Knaresborough location – which plugs a gap left by the closure of the town’s last bank in 2021 – Mr Haigh said he had observed an appetite for face-to-face services. He said: “Two things struck me: one just how busy it was via word-of-mouth; and two, the incredibly positive reaction from people. Knaresborough is a place where the last bank has left town. Until we went into the library they hadn’t got a financial institution on the high street. And people are just delighted.”
Elsewhere the society – which won Company of the Year at the Tyneside and Northumberland heat of the North East Business Awards – highlighted a “robust” performance for its financial advice subsidiary, Newcastle Financial Advisers. It also signalled a strong start to the year for its outsourced savings management business, Newcastle Strategic Solutions, which helps a number of banks to run savings operations.
Community funding via the society’s grant-giving programme administered by the Community Foundation Tyne & Wear and Northumberland reached £182,000 during the period – including sums given to organisation tackling issues around employability, social isolation, food poverty, homelessness, debt management, and cancer care.
And a new five-year partnership with Walking With The Wounded, including an annual donation of £25,000 to support their employability programme, is intended to support veteran employment opportunities across the Newcastle Building Society Group. In march, Newcastle United Foundation opened its £8m city centre home – NUCASTLE powered by Newcastle Society.
