Principality Building Society posts strong 2016 results

Jessica Nangle

February 15, 2017

Principality Group has announced one of its strongest years ever with lending to homeowners and pre-tax profits reaching more than £50m.

In 2016 Principality exceeded £8bn in assets and its gross mortgage applications of £2bn for the first time in its history.

Pre-tax profits for 2016 reached £50.3m which is a £1.3m increase on 2015 figures. And savings balances also grew strongly, now standing at over £6.1bn.

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Graeme Yorston, group chief executive at Principality Building Society, said: “I am delighted that the strength of the brand of Principality alongside the outstanding service and dedication of our teams across the business has helped deliver a very strong performance in 2016.

“The trusted model we introduced in 2012 continues to withstand difficult and sometimes uncertain periods.

“Despite a challenging interest rate environment for savers we have continued to grow savings balances which have been fundamental to supporting our growth in mortgage lending.”

Key performance highlights for the Wales based building society include net residential mortgage lending which grew by over £600m and helped more than 3,500 first-time buyers get on to the property ladder.

Yorston added: “Delivering a strong performance is essential, both for our ability to withstand any downturn in the economy as well as providing investment in the business for the future.

“This will mean building on our current model and ensuring that we have digital capability across our business as well as a broader product set that will ensure the business is able to thrive for generations to come.”

Despite the positive figures, the society’s chief executive maintains the belief that profits in the next few years will reduce.

“I have indicated previously that we anticipate profits will reduce in the next few years,” he said.

“This was always planned as part of our strategic direction, as we continue the investment programme to improve and develop our capabilities, including digitally.

“It is important we focus on what is right for our business so that we continue to grow and invest to ensure its long-term success.

“We will invest in our products, services, people and systems to ensure that we can retain and attract members for many years to come.”

This comes after Principality announced that its current finance director Stephen Hughes will take over as chief executive in March 2017.

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