Swansea Building Society demonstrated its resilience despite operating in a challenging economic environment in its 2022 results. It achieved its highest ever growth in its balance sheet, supported by record profits—all following a six-year period of sustained, controlled growth.
The Society’s total assets, mortgage balances, savings, capital and profits all reached record highs in the 12 months to December 31, 2022. Its total assets, mortgages and savings balances all increased by a growth rate of 14% compared with the same period a year earlier.
Total assets increased to £529.8 million, growth of £66.3 million. Its savings balances reached £492.9 million, an increase of £61.6 million. Its mortgage balances were £410.9 million, an increase of £50.3 million. The Society’s mortgage growth was driven by gross mortgage completions of £112.3 million, the second highest in its history after 2021.
The Society’s growth was supported by record profits before tax of £5.4 million compared with a previous record of £5.2 million in 2021. This is vitally important to the Society, as it provides the mutual organisation with greater capital reserves to support members achieve their financial goals.
The Society remains one of the few financial institutions in the UK that receives no wholesale funding or support from the Bank of England in the form of cheap funding. Its balance sheet is funded entirely by customer savings balances and its own capital reserves built up from retained profits over many years.
The record results were achieved in the context of a fast-changing environment for banks and building societies last year. The Bank of England raised interest rates nine times in a 12 month-period from December 2021.
Mindful of the impact these increases could have on borrowers, and recognising the cost pressures of inflation, the Society took the decision to not pass on the full increase to mortgage borrowers. Only 1.25% was passed on to variable rate borrowers as at 31st December 2022, compared with an increase in the Bank interest rate of 3.4%. Equally, the Society increased rates on its fully variable rate savings book several times, which was reflected in the record growth in savings balances.
Alun Williams, Chief Executive Officer, Swansea Building Society, said:
“2022 was another difficult year for the UK economy due to the severe headwinds we have faced. The Society had to balance the needs of borrowers, savers and colleagues. But I am incredibly proud of how we thrived last year, strengthening our financial position for future years, as well as investing in several initiatives to better serve the needs of our customers and communities.
“Financial ratios are just one measure of the Society’s performance. It is also vitally important that we are also successful in terms of the quality of customer feedback and member satisfaction. I was delighted that, based on customer surveys in 2022, 97% of respondents said they would recommend the Society to other prospective customers.
“As a member-owned business, community is close to our hearts and we offer support not only through the products and services we provide, but also by donating our time, skills, and resources. Maggie’s, the cancer charity, will again be our charity of the year in 2023. In addition, as we also celebrate our 100th year, we have launched our £100K centenary fund to provide further support to local good causes in branch communities, as well as through a number of other initiatives such as colleague volunteering days.
“As we look to our 100th year and beyond, the Society is well placed to navigate through difficult trading conditions caused by the current economic uncertainty. We will continue to support members through whichever channel is best for them, whether that is in-branch, telephone or online. We aim to further build on our brand awareness in our core geographical areas and continue to be there for our members and communities when they need us. Together with our robust financial strength, we are in a strong position to deliver on our core purpose of enabling individuals and families to realise their goals of a better more secure future in strong communities.”
The Society will hold its annual general meeting at the Swansea.Com stadium on Thursday 27th April 2023. Members can vote ahead of that meeting or attend the meeting in person and the Society will donate a pound to Maggie’s, the cancer charity, for every vote received.
