Swansea Building Society celebrated new record‐breaking highs in terms of its total assets, mortgage and savings balances in 2019, when it produced its largest year of balance sheet growth in the Society’s history.
The Society’s total assets increased by £61.0m to £370.4m, a growth rate of 20%. Its mortgage balances increased by £40.1m to £273.4m, a growth rate of 17.1%. All of the growth in net mortgage lending was funded by a £59.2m increase in retail savings balances from personal customers.
Gross mortgage lending hit a new high at £74.3m in 2019, up from £62.2m in 2018. Despite the increased mortgage lending, mortgage arrears remained extremely low, at just £41k, representing 32 customers on a mortgage book of £273.4m and 1,761 mortgage customers. Net interest receivable for the year was £7.4m compared with £6.9m in the previous year. Its pre‐tax profits for 2019 were £2.3m, slightly down on the £2.6m it made in 2018. However, this compares very favourably to other building societies of comparable size. The Society has now delivered annual pre‐tax profits greater than £2m in each of the last six years.
The Society remains one of the few financial institutions in the UK that has 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 Society continued with its ethos of ‘opening not closing’ branches. With high street banks closing thousands of their branches in recent years, the Society’s philosophy differs to most financial institutions. It achieved its growth through a customer-focused approach to finance for those who want the benefit of a personal service when banking. This is demonstrated by the Society’s relocation of its flagship branch in January 2019 to a prime high street location in Swansea City Centre. The relocation of the branch is the latest investment to take place in its branch network over the last five years, with new branches in Carmarthen and Cowbridge adding to its existing presence in Swansea and Mumbles.
Alun Williams, Chief Executive of Swansea Building Society, said: “I am delighted to report that the Society has delivered a very strong performance in 2019. Our gross mortgage lending increased by 20% to £74.3m in the year, demonstrating the demand from customers for our face to face business model and our flexible approach to mortgages.
“We opened our new Swansea branch on 7 January, 2019, and it has considerably helped improve our brand awareness in view of its prominent high street location. Alongside the Carmarthen and Cowbridge branches opened in recent years, the new branch has made a significant contribution towards our overall performance in 2019. We believe the success of our approach can be witnessed by the Society seeing a net increase of 2,817 savings members in the year, taking the Society’ total membership to above 20,000 for the first time in its history.
“We produced strong profits while delivering objectives such as the opening of the Swansea branch, and increasing our customer facing staff to ensure we continue to deliver the personal service on which we pride ourselves. We also renovated our head office administration centre in Swansea, increased our IT spend and employed additional numbers of support staff. Each of these strategic initiatives increased the Society’s cost base as we build our infrastructure to ensure we continue to deliver sustainable growth.
However, the biggest impact to our profitability was as a result of the Society maintaining its market leading savings rates for its members for the full year. This was despite almost all other banks and building societies cutting rates and our savings balances on which we pay interest increasing by £59.2m.
“It was particularly pleasing that this record growth was achieved while receiving excellent customer feedback. Results from our latest customer surveys confirm that 96.6% of our existing members would recommend the Society to other prospective customers. This again we feel supports our ‘opening not closing branches’ philosophy.
“We recently launched a new range of mortgage products to offer customers lower interest rates on residential, self-employed, lending in retirement and buy-to-let mortgages to allow more people in our heartlands to benefit from our lending propositions, and in 2020 will launch an online savings platform for our existing members which will complement our branch offering.
“We also continued to focus on building strong relationships with the communities that we serve, including partnering with local charities such as sponsoring the Macmillan Cancer charity annual Gower Macmarathon and recently announcing Wales Air Ambulance as our first charity of the year.”
The Society will hold its annual general meeting at Swansea Liberty Stadium on Thursday 23 April 2020. The event is planned to go ahead at present but any updates will be posted on the website: swansea-bs.co.uk/