Principality releases interim half year results

Principality, Waless largest society, has issued results that reflect a strong performance for the first half of 2005 in an increasingly competitive and crowded market.

The year-on-year highlights include group assets growth of 10.44%, exceeding 4.2bn compared to 3.8bn in June 2004.

Group profit before tax increased by 17.76% to 9.7m, compared to 8.2m in June 2004.

Group mortgage balances grew to 3,406.4m from 3,058.1m in June 2004.

A subsidiary company, Nemo Personal Finance Ltd, was launched.

The results were prepared, for the first time, under International Financial Reporting Standards.

Peter Griffiths, chief executive of Principality Building Society, says: “We have delivered a solid set of results for the first half of 2005 and are on course to deliver our commitments to all our stakeholders.

“Group assets have increased to over 4.2bn and pre-tax profits are up by 17.76% to 9.7m. Despite the slowing housing market, mortgage balances also grew to 3,406.4m – an increase of 11.39%.

“Principalitys subsidiaries have performed exceptionally well. Nemo Personal Finance Ltd, a personal secured loans business, which launched in February 2005, has exceeded forecasts and is now entering into its second phase with the opening of new premises and the launch of a direct to customers marketing campaign.

“Likewise, the commercial lending division and valuation team have continued to prosper and Peter Alan estate agency has delivered a strong performance with the assistance of a new lettings arm.

“As our subsidiaries prosper, the profit generated enables us to build a more sustainable business and provide real member value. We continue to look for other opportunities to invest in new businesses to continue the process of diversification to offer a wider range of products for our members.

“We are the first building society of our size to opt for a multi-tie model in response to depolarisation – we now offer financial planning products from a selection of eight providers which significantly enhances customer choice and enables us to provide a holistic financial planning solution as a core proposition.

“It has been a more exacting year for the building society, which has continued to see margins squeezed within a highly competitive market place. This is against a backdrop of increased effort and cost to meet new mortgage regulation, insurance regulation, the International Financial Reporting Standards and later this year the new Basel II Capital Accord.

“Following the successful launch of the stronger Principality brand we are continuing to develop and expand our products and service channels to meet the changing needs of customers.

“A new online mortgage application facility will go live later this year, which will be completely bilingual. We have also been reviewing our savings range and will be launching a new postal account in October.

“We move into the second half of the year confident of the continued success of the Society. Our focus will continue to be on maintaining our position as the leading Welsh provider of mortgages and savings, developing new products and services for our members and building new income streams to supplement overall returns.”