Newcastle Intermediaries’ operating profit in H1 2018 rose by 16% to £7.2m but it’s lending fell from £303m in H1 last year to £229m, the lender’s half year results showed.
Despite the lending fall the society said this was ‘in line with plan’.
Andrew Haigh, chief executive, said: “I am delighted that we have been able to improve operating profitability at a time when we continue to invest in our branch network, our community and creating a great place to work for our colleagues.
“Our financial performance at half year is particularly encouraging as we are reporting increased profits from ongoing operations, strong capital ratios, a robust liquidity position and low levels of arrears, reflecting the excellent credit quality of our residential mortgage lending.”
Newcastle doubled lending volumes to the self-employed in the first half of the year.
Levels of mortgage arrears of three months or more, already well below industry average, reduced further to 0.36%from 0.39% at the same point last year, which it said reflected strong credit risk management and robust affordability assessments on the lending being carried out.
Profit before tax was £6.9m. In the comparable period ending June 2017 this was £7.2m and included a credit of £2.1m on the purchase of the Group’s Cobalt Park office. Excluding this exceptional gain from 2017, this year’s half year profit increased by £1.8m (35%).