Portman announces 2005 annual results
·Total assets increased by 15% to £17.8 billion
·9th consecutive year of profit growth
·Residential mortgage balances up by 16% to £13.5 billion
·New residential lending up by 18% to £4.3 billion
·Solvency strengthened to 13.6%
·Successful first year performance by new financial planning sales force
·The fastest growing top ten building society over the last five years
Commenting on the Group’s performance, Portman chief executive Robert Sharpe said: “2005 has been another highly successful year for the Group, against the background of a very challenging period for the UK mortgage lending and retail savings sectors.
“Despite these challenges, I am delighted to report that 2005 represents the 9th consecutive year of profit growth for the Group. Our mutual advantage enables us to continue to deliver highly competitive products to both our borrowing and saving members. During 2005, we achieved exceptional growth in both new and retained residential lending and introduced a series of market leading savings products designed to reward both our existing members and attract new members to the Society.
“Growth will continue to underpin our success as a mutual organisation and our focus remains firmly on providing a strong infrastructure to support this strategy. During 2005, the Group has further expanded the sales and administration functions at the former Staffordshire Building Society Head Office in Wolverhampton. This expansion has been primarily through the highly successful Portman Direct operation which, in just its second year of existence, is already contributing significantly to the Group’s new prime mortgage business.
“At the beginning of the year, we established our new financial planning sales force. This was a significant change for the Group and one which has greatly enhanced the breadth of service offered to members. We are already seeing positive results from this move, with investments made through the Society increasing by more than 50% compared with 2004.
“Our non-member business also continues to thrive and is delivering record profits to the Group. This year, our specialist lending subsidiary, The Mortgage Works, reported a 44% increase in profit to £25 million.
“2006 will bring its own challenges to the industry as a whole and, whilst there is some uncertainty in terms of the economy and housing market going forward, I am confident that the Portman Group will continue to build on its position as an exceptionally successful, member-focussed mutual organisation,” Sharpe concluded.
Despite the uncertain outlook at the start of 2005, the Group had a record year with new residential lending, up 18% to £4.3 billion, reflecting the market leading rates which were consistently offered across its product range. This, combined with a very successful borrower retention strategy, has resulted in exceptional growth in its total residential mortgage balances, up 16% to £13.5 billion.
The Group focused on introducing a series of savings products with extremely competitive rates to achieve a balance which benefited both existing and new savers. All the following offered base rate or higher:
·a Members’ Loyalty Account;
·a 50 Plus Account for savers over this age;
·two Branch Bonus Saver issues; and
·a 25 Day Notice ISA.
As a result, the Society achieved an excellent performance in terms of customer retention and a satisfactory level of new savings inflows, particularly in the second half of 2005.
The Mortgage Works
Once again, the profitability of the Group’s non-member business was strong, with The Mortgage Works delivering a 44% increase in profit to £25 million.