About Us

Interim results announcement for the six months ended June 30 2006

Britannia Building Society interim results announcement for the six months ended 30 June 2006.

• Integration of Bristol & West savings and branch business completed ahead of target
• Employee engagement and customer satisfaction at record levels
• Mortgage lending up more than 70% to record £4.1 billion
• Asset quality remains strong with continuing low arrears
• Profit up to record £75.8 million

Britannia Building Society, the leading mutual, announced a record performance for the first half of the year as it confirmed it had beaten its ambitious target for integrating the former Bristol & West savings business and branch network, delivering on its promises of no customers being worse off and no compulsory redundancies.

Operating profit and lending were at record highs and arrears remained at very low levels thanks to the Group’s continued focus on quality lending and proactive customer account management. Sales of investments, life insurance and personal loans all increased.

New business integration

In September 2005, Britannia completed the £150 million purchase of the Bristol & West savings business from Bank of Ireland, acquiring more than £4 billion of retail funds.

More than 700,000 Bristol & West savers became members of Britannia in the first re-mutualisation of a former building society, marking a step change in the scale of Britannia’s business, which grew by a third in terms of members, savings balances and branches.

The integration of customer systems was completed in early July, three months ahead of target, with more than a million customer accounts switching to Britannia accounts on Britannia systems. The Society kept its promise of no customer being worse off as a result of this change – in fact, most are now earning higher interest on their savings. In addition, the Society made no compulsory redundancies and offered roles to each of its 800 new employees.

Branches in 65 towns and neighbourhoods where Britannia was not previously present have been rebranded - all three million Britannia members can now transact at 253 branches around the UK, as well as by phone or online. The Society will complete its £15 million investment in refurbishing all of its new branches by the end of this year.

Britannia has opened a new office in Bristol and based a new savings call centre there – all other savings and mortgage calls are managed from its base in Leek, Staffordshire.

Business performance

Profit before tax and Britannia Membership Reward was up at a record £75.8 million (30 June 2005 : £73.0 million). The profit figure includes the effect of the Bristol & West integration, funding and trading costs of £24 million, which were offset by hedging gains.

Both the Member Business and Britannia Capital Investment Group were ahead of profit targets. As a mutual society, Britannia makes only the profit needed to maintain financial strength and it continued its policy of passing on to members the benefits of operational efficiency through competitive pricing of savings and mortgages.

Total assets grew to £33.4 billion (30 June 2005 : £26.0 billion). Gross mortgage lending totalled a record £4.1 billion (£2.4 billion) – up 70% on the first half of 2005 when the market was relatively quiet. Both the Member Business and Platform saw significant increases in mortgage sales. Platform launched a revised product range towards the end of the period, along with a new online application process for brokers. Group net lending was £1.4 billion, more than twice the £609 million achieved in 2005.

Quality of lending remained high. Just nine per cent of Group residential lending for the half year was at more than 90 per cent loan to value (LTV) with the average mortgage LTV at just 70 per cent. Britannia’s continued focus on quality lending meant that arrears over 12 months remained negligible, less than £1 million.

In only its second year of operation, Britannia’s agreement with AXA to provide life, pension, protection and investment products through the Britannia branch network is outperforming expectations.

Customer satisfaction scores are at best-ever levels and independent research confirms levels of employee engagement at Britannia are among the best in the UK.

Commentary

Britannia Group Chief Executive, Neville Richardson, said: “These record results reflect a growing business that delivers consistently for our members.

“Our new members, branches and assets have greatly increased the size and scope of Britannia’s business, delivering significant additional opportunities for growth as we complete our transformation into one business.

“Our new members now share all the benefits of owning their savings provider, with our commitment to an extensive branch network, competitive rates, a one-member, one-vote constitution and an annual share of profits in due course through our unique Britannia Membership Reward.

“We have seen sales of mortgages, personal loans, investments and insurance increase in an immensely competitive market thanks to the skill and dedication of an engaged workforce.

“The second half of the year has started very well, with innovations such as Platform’s Click application, and prospects look good.”

Download the complete Interim Results in 'PDF' format.

What will you need?

Our news releases are in 'PDF' so you'll need to have Adobe Acrobat 4.0 or above to read them. If you haven't got it, you can download it for free from adobe