Principality Building Society saw an increase in net retail mortgage lending while its underlying profit before tax dropped.
Net retail mortgage lending rose by £285.6m in the first six months of this year, bringing total assets to more than £10bn for the first time in the building society’s history.
Underlying profit before tax was £21.2m compared with £27.4m for the six months to June 2018 and is in line with internal expectation.
Steve Hughes (pictured), chief executive of Principality Building Society, said: “I am proud of the performance of my colleagues in the first six months as our excellent customer service once again makes us stand out from our competitors.
“We have delivered growth against a backdrop of a highly competitive mortgage and savings market, uncertainty over potential base rate changes and Brexit negotiations.
“We remain committed to the high street in Wales and the borders, while major banks have withdrawn. For us to maintain our presence it is important our members continue to use and value their local branches and recommend us to family and friends so we continue to grow our society.
“We have actually seen branch transactions increase in the first six months of the year and we know our members value our great personal service.”
The drop in underlying profit before tax was planned. The society said it was driven by significant investment in the modernisation of mortgage and savings technology and branches to meet the changing needs of members.
It also put it down to the run-off of the secured loans portfolio as Principality deploys capital into retail mortgage lending.
Statutory profit before tax was £19.8m, down from £24.9m year-on-year.
Hughes added: “Our commercial team has once again made an outstanding contribution to help build our communities, by making £50m available in competitive loans to help smaller housing developers build homes across Wales.
“In light of increasing demand we have topped up the fund committed to housing associations in Wales and now have £75m available which will enable them to press ahead with creating much-needed affordable homes.
“Their outstanding efforts have made a significant contribution towards addressing the Welsh Housing Agenda this year and is a shining example of how Principality is making a difference to our communities.
“We will continue to seek to grow and invest in our business in a safe and sustainable way for our members and to make sure we are in a strong position for current and future generations of members.”
“We expect economic and political uncertainty to continue over the next six months and price competition in the mortgage and savings markets to remain high.
“Any reduction in the UK base rate would also cause further pressure on margins and could result in changes to rates offered to our members.
“Despite these challenges, our profitability and balance sheet position remains robust and our performance in recent years has built a solid foundation for us to invest for the future.”