About Us

Preliminary Results for the year ended 31st December 2006

All round strength from Britannia in best-ever year

Britannia Building Society hailed 2006 as its best-ever year as it announced record mortgage lending, higher savings and investment sales, record profits, increased customer satisfaction and industry-leading levels of employee engagement.

• Customer satisfaction and employee engagement at record levels
• Members received over £51 million from reward scheme
• Mortgage lending up 22% to record £8.4 billion
• Strong asset quality and continuing low arrears
• Integration of Bristol & West savings accounts and branches delivered ahead of schedule
• Profit up to record £130.4 million

Britannia's record performance was achieved while the Society beat its ambitious target for integrating its £150 million acquisition of the former Bristol & West savings business and branch network in the UK's first remutualisation. Most customers are now better off and none were worse off and, as promised, there were no compulsory redundancies.

Group chief executive Neville Richardson said: "Britannia's record results reflect a growing business that is delivering for its members. Sales of mortgages, personal loans, investment and insurance were increased in an immensely competitive market. This is thanks to our people who are fully engaged, skilled and dedicated in a way few companies can match."

Business performance

Profit before tax and Britannia membership reward (BMR) was up at £130.4 million (2005 : £120.5 million).

Total mortgage lending for the year was a record £8.4 billion (2005 : £6.9 billion). Group net lending was £2.3 billion.

Quality of lending remained high. Just 14.6% of Group residential lending for the year was at more than 90% loan to value (LTV) with the average mortgage LTV at 67%. Britannia's continued focus on quality lending meant that arrears over 12 months remained negligible, (less than £1 million).

The profit figure includes the effect of the Bristol & West integration, funding and trading costs, which were partially offset by hedging gains. Costs increased in 2006 as expected, following the acquisition of the former Bristol & West savings business and branch network. Substantial costs were incurred in integrating the business, in duplicate expenses during the transitional period and in respect of the ongoing cost of the branch network which has expanded by a third.

As a mutual, Britannia makes only the profit needed from the Member Business to maintain financial strength, while the BCIG companies maximise returns which are shared with members through the unique BMR. Around a million loyal Britannia members are sharing over £51 million through BMR this year - the biggest payout so far. More than £473 million has been shared in the 11 years the scheme has been running.

As part of the integration costs, 65 former Bristol & West branches were refurbished and relaunched under the Britannia brand. Britannia will complete a three-year programme to upgrade every one of its 253 branches by the end of 2007.

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 outperformed expectations.

Platform, the Group's intermediary lender, improved its product range and launched clickapplication, a new online application process, alongside the highly successful clickdecision online decision in principle service. As a result, Platform again delivered record lending figures.

Britannia Treasury Services (BTS) had another profitable year on the back of two major securitisations totalling more than £2 billion and mortgage asset sales of £1.5 billion. BTS also acquired mortgage books valued at £1.1 billion.

Britannia Commercial Lending's commercial investment loans portfolio now exceeds £1.5 billion, with a further £1.1 billion loaned to registered social landlords and £420 million to residential investments. This portfolio delivers exceptional financial performance, with low defaults.

Britannia International now has 14,000 customers in 130 countries and manages nearly £2 billion in deposits. The 45-strong team look after our investors and also receive deposits from major banking and insurance institutions and Isle of Man residents.

Western Mortgage Services (WMS), the Group's specialist mortgage administrator, saw its total mortgage portfolio under management grow to £11 billion. Its 370 people provide services to third parties, as well as Platform and Britannia Treasury Services mortgage holders.

Customer satisfaction scores were at best-ever levels, with 86% of customers saying they would recommend Britannia. Despite 700,000 new customers joining from Bristol & West, customer complaints were down again, having fallen more than 40% since 2004.

Independent research confirms levels of employee engagement at Britannia are among the best in the UK, with 94% satisfied with Britannia as an employer.

New business integration

In September 2005, Britannia completed the £150 million purchase of the Bristol & West savings business from Bank of Ireland, acquiring £4 billion of retail funds. Some 700,000 Bristol & West savers became Britannia customers in the first re-mutualisation of a former building society, marking a step change in the scale of Britannia's core Member 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 an already ambitious target, with more than a million savings accounts switching to Britannia accounts on Britannia systems. The Society kept its promise of nobody being worse off as a result of this change - in fact, most are now earning higher interest. The Society also kept its promise of no compulsory redundancies, offering permanent roles to each of its 800 new employees.

Branches in 65 towns and neighbourhoods where Britannia was not previously present have been refurbished and rebranded at a cost of £15 million - Britannia members can now transact at 253 branches around the UK.

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

The Society is already seeing anticipated cost savings and increased business coming through. Savings now are being achieved by merging neighbouring branches, slicker processing and systems integration and the expanded branch network offers new sales opportunities, as well as added convenience for Britannia members.

The acquisition also provides Britannia with a platform for further growth, as the £4 billion of savings balances acquired from Bristol & West mean the Group can borrow another £4 billion in wholesale funds, giving it the potential of another £8 billion of mortgage lending.

Downloadable Summary Financial Statement 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