Monmouthshire BS’ lending falls as mortgage platform upgrade affects new business
Monmouthshire Building Society reported lower new mortgage lending in its latest financial year after temporarily withdrawing from new originations to support the implementation of a new mortgage platform.
Gross new lending fell from £219m in 2025 to £197m in 2026, while total mortgage assets declined slightly from £1.38bn to £1.36bn.
Underlying profit before tax for the year was £6.6m, although net interest margin narrowed from 1.9% to 1.88%.
The mutual said it continues to operate in an environment characterised by uncertainty and change, pointing to geopolitical tensions and inflationary pressures.
Mortgage platform upgrade hits lending volumes
Monmouthshire Building Society said it continued to support members through a competitive market by offering fair value across its savings and mortgage products while maintaining service standards.
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However, during the second half of the year, the mutual withdrew from new mortgage originations while it implemented a new loan origination platform.
The lender said the move reduced new lending in the short term but was necessary to improve the customer journey, strengthen operational capabilities and support better levels of service in the longer term.
Margin pressures offset by stable profits
The net interest margin declined marginally to 1.88%, down from 1.9% a year earlier.
The society said the result was resilient given intense competition in both mortgage and savings markets, and had helped it absorb increased investment in transformation programmes while maintaining profitability and capital strength.
It added that a continued focus on product mix, disciplined pricing and sustainable growth remained key to balancing member value with the need to generate profits for future investment.
The society said mortgage book quality remained robust despite ongoing cost-of-living pressures.
As at 30 April 2026, there were 98 mortgage loans one month or more in arrears, compared with 94 a year earlier. These accounts had total arrears of £0.4m and outstanding balances of £18.3m.
The number of mortgages with payments more than 12 months overdue fell from 14 to 12. However, the total balance associated with these accounts increased from £1.8m to £3.3m.
Monmouthshire Building Society said it continued to monitor borrower performance closely and recognised some customers may require additional support amid rising energy costs and inflation.
Impairment provisions increase
The mutual’s impairment ratio remained unchanged at 0.04%.
Loan loss impairment provisions rose from £0.5m to £0.6m, while impairment provisions recognised against customer loans increased from £545,000 to £592,000.
Total credit risk exposure to the mortgage portfolio, including undrawn commitments, decreased from £1.417bn to £1.376bn over the year.
Dawn Gunter, interim CEO of Monmouthshire Building Society, said: “Our 2025/26 financial results show a strong performance and disciplined progress as we moved from a period of growth to the early stages of our significant transformation and modernisation.
“This transformation programme is laying down the foundations that are pivotal for the next stage of our growth strategy. We have modernised our lending and digital capability, improved our customer service and security and strengthened our operational capability. All of this has been achieved while also delivering great customer service, controlling our risk and maintaining business as usual – which I am extremely proud of.”
