Principality BS grows lending book to £11.3bn
Principality Building Society saw a modest increase in its retail mortgage book, with a £2m rise to £11.3bn over the six months to June.
The mutual said this growth was achieved “despite a difficult trading environment” as the number of homeowners it supported rose to 89,867.
Principality Building Society also served 3,195 first-time buyers, down from 4,033 last year. It said the lower number reflected affordability pressures in the housing market but said it remained focused on lending sustainably.
Its commercial lending portfolio decreased by £16.6m to £863.9m, compared to the end of last year. However, it said its pipeline continued to rise, nearing £300m, and would convert to growth over the years.
The mutual has agreed £73m of new lending to housing associations, up from £15m last year, and funding to support developers deliver 352 new homes, a rise from 55 last year.
Principality Building Society increased its impairment charge from £300m last June to £5.6m this year, “driven by an increase in retail mortgage and commercial lending provisions, reflecting less favourable macroeconomic forecasts, particularly lower house price growth expectations and an elevated base rate outlook”.
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Nevertheless, the mutual said its loan portfolios remained strong, reflecting its “prudent lending criteria, credit quality and underwriting standards”. The rate of arrears across its book was 0.56%, flat on December and lower than the industry average of 0.91%.
The mutual’s profit before tax stayed stable at £22.2m, marginally lower than the £22.5m reported in June last year.
Iain Mansfield (pictured), chief executive of Principality Building Society, said: “The first half of the year has been dominated by continued geopolitical uncertainty, with conflict in the Middle East creating volatility across financial markets and influencing expectations for future Bank of England base rate changes.
“These external forces have contributed to a challenging operating environment for households and businesses across the globe.
“Despite this backdrop, the society delivered solid financial performance, while maintaining a strong capital and liquidity position, all while managing our costs and taking deliberate decisions that strengthen the society for the long term.”
Mansfield added: “In the face of a challenging market, we continue to listen to and respond to our brokers and customers’ feedback, which has meant that we have been able to take a more focused and distinctive approach to our lending, helping more people access finance for their homes, responsibly.”
