Wales’ largest building society “remains resilient” after posting its annual results which saw assets increase but profit growth decline. Principality Building Society described its annual results as “strong” for the year ending 31 December 2022 despite the ongoing economic uncertainty, recording total assets of £11.3bn, up from £10.9bn in 2021.
Its retail mortgage book also grew by £209m in 2022 and savings balances by £170m. However, the mutual saw profits drop slightly last year, recording an underlying profit before tax of £43.5m, down from £54.4m in 2021, and statutory profit before tax of £49.3m, down from £64m.
The mutual said the reduction in profit was due to “volatility within impairment provisions” created by the economic headwinds, following a £14.8m impairment charge during the year, compared to a £15.4m provision release during 2021. Principality said it will take a prudent view of the economy over the next 18 months.
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Despite this, chief executive Julie-Ann Haines said the business “remains resilient” and would continue to support its members and customers through the cost-of-living crisis.
She said: “Our members can be assured we have a strong balance sheet and capital to reinvest in the business for their benefit, to help us create better homes, help members to financially secure their futures through savings, as well as trying to create a fairer society by having a positive impact on our communities. With unfavourable economic conditions expected to last until at least 2024, our business remains resilient and able to endure these difficult times.
“Now more than ever, we need to be courageous in our decision making. The challenges facing our members, communities and colleagues in the face of the cost-of-living crisis means we need to strive to achieve more. I am so excited about the opportunities that lay before us and how we can start to make an even bigger difference.”
The mutual said it supported almost 76,000 homeowners and gave mortgages to more than 4,500 first time buyers last year. Earlier this month, housing association Pobl Group announced a £50m funding line from Principality to build 10,000 new affordable homes.
Ms Haines said: “From the first moments I took over as CEO, I could see an urgent need to focus on being much more ambitious and clear about what Principality stands for, to help more people across the UK to own their own home and be more financially resilient. It is clear that the pressure of the current cost-of-living crisis has impacted our members, colleagues and communities through 2022.”
Principality said it is also committed to keeping its 53 branches in Wales open.
“To give our members, colleagues, and communities more certainty, we made a promise in 2022 to keep open our branches across Wales and England until at least 2025, so that we will retain a presence on the high street. We have the biggest branch presence of any financial services provider on the high streets of Wales, whilst continuing to develop our technology to become easier to do business with, be quicker and more efficient. It is what we were set up to do more than 160 years ago and our purpose to help people find a home and protect their savings is stronger than ever before in these difficult times.”
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