Membership

Net interest income: this is the interest we receive on money we have lent, less the interest we have paid to Members and others who have deposited their money with us.

Most of the money we lend goes for mortgages, to purchase or refinance homes. Our mortgage lending is made by the Society and by Platform Home Loans and Britannia Treasury Services, two of the Society’s subsidiary companies. We also lend for the purchase of commercial properties, such as offices, and for property development and purchases by Housing Associations. So most of our assets are used for buying property of one type or another, with the property used as security for the loan.

We also keep a certain amount of funds available as cash, bank balances and deposits, for example to repay Members who have savings accounts with us. We lend this money to large banks and other institutions, who also pay us interest.

Most of the interest we pay out goes to Members who save with the Society. In addition, we borrow from banks or other institutions and pay them interest.

Other income & charges: in addition to interest, we also receive income from a number of other sources. For example, we offer a wide range of insurance, financial products and services to Members, and these generate income, usually as commission from the company providing the service. This item also includes fees charged on mortgages, for example in arranging a new loan or when people want to repay a fixed rate mortgage early.

Fair value gains and losses: these are the gains and losses that arise on derivative financial instruments.

Derivative financial instruments: these are the contracts, with banks, that are designed to protect the Society from changes in interest rates or exchange rates.

Administrative expenses: these are the costs we incur in running the Society and its other businesses. The biggest single cost is wages and salaries of the people who run the branch network and our central operations. Other costs include advertising, developing new products, running costs of branches and professional fees and compliance costs.

Profit before tax & Britannia Membership Reward: this is the amount of profit we have made, available to pay bonuses to members and to re-invest in the business and to pay tax.

Britannia Membership Reward: this is the total amount of the bonus paid back to members in February each year.

Taxation expense: this is the amount of tax payable to the Government on our profits this year.

Net profit: this is the amount of profit which we have kept in the business to fund future development and growth for the benefit of Members. We need to earn profit to keep the Society strong and to meet the requirements of our regulators.

Assets: money and investments owned by the Society, over which the Society has rights or which will give the Society future benefits.

Liquid assets: this is the amount owed to the Society which can be converted to cash at short notice – that is, it is ‘liquid’. This generally refers to money loaned to banks and other institutions, and is readily available for when Members want to draw money out of their accounts. In the meantime, it earns the Society interest.

Mortgages: this is money which the Society has lent for buying property. It is repayable to the Society in the future, often up to 25 years time.

Fixed and other assets: amounts which we have invested in assets to run the Society, such as branches and computer systems. It does not earn interest and is therefore kept relatively small.

Liabilities: amounts which the Society owes to others or over which others have rights.

Shares: the money savers have deposited with the Society. We pay interest to Members on this.

Borrowings: other amounts invested with the Society, generally from banks and other institutions.

Other liabilities: amounts the Society has set aside to meet future costs, such as tax.

Subordinated liabilities: amounts loaned to or invested in the Society, largely by institutional investors. Subordinated means that, if the Society was ever wound up, these loans are paid back last, once everyone else has been paid. As a result they earn more interest for the lender.

Reserves: the cumulative amount of profit kept by the Society each year in order to ensure that the Society remains strong and is able to grow in the future. The value of reserve is equal to the excess of assets over actual liabilities.

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