Newcastle Building Society reports strong financial growth despite “volatile” market

Newcastle Building Society has announced its financial results for the first half of 2023, reporting continued growth through the first half of the year achieved by offering “consistently good value for savers and borrowers”, providing additional support for customers and communities, and delivering a strong financial performance in “volatile” market conditions.

The Society responded to multiple increases in bank base rate by continuing to increase the rates on savings products to offer ‘good value’. In the five months to end of May 2023, the Society’s average savings book rate of 2.49 per cent was higher than the market average of 1.87 per cent, equating to £11m more in interest for its savers over the same period.

In the face of rising interest rates, the Society continued to offer good value to borrowers too, with a Standard Variable Rate (SVR) for mortgages at the end of June of 5.19 per cent against a market average of 7.63 per cent, saving members almost £336k in interest payments for the month alone.

This approach helped the Society attract net core residential lending of £408m (Half Year 2022: £181m). The Society announced Group profit before tax of £16.2m for the period ending 30 June 2023, compared to £14.2m for the same period last year.

Support for all customers impacted by the cost of living crisis was enhanced, including through an ongoing partnership with Citizens Advice Gateshead to deliver the Helping Hand service offering free, independent and rapid access to advice and support on a wide range of topics, as well as emergency financial support.

Newcastle Building Society was amongst the first group of lenders to sign up to the Government’s Mortgage Charter, which provides additional support and reassurance for people concerned about their mortgage repayments.

Andrew Haigh, chief executive at Newcastle Building Society, commented: “Persistent inflation and the rising cost of living continues to present ongoing and difficult challenges for our communities, and the first half of the year has been shaped by unpredictable market conditions creating a complex trading environment.

“Our responsibility to members, communities and wider stakeholders is clear and as rates increase, we have been mindful of the need to find a fair, equitable and consistent approach in balancing increases in variable savings and variable mortgage rates.

“The fact that we have attracted so many new customers to the Society demonstrates the value of that approach, and enables us to do more to support customers and those in our communities.”

By Matthew Neville – Senior Correspondent, Bdaily

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