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|The Nottingham announces a year of record performance as its strategy gathers momentum|
|Wednesday, 17 February 2016|
The Nottingham Building Society (known as The Nottingham) is pleased to announce that, through its continued focus on the development of its strategy to offer members a unique brand of advice, service, value and choice, it has achieved another year of record performance.
The Society’s approach is gathering pace, as it has delivered its unique proposition to more customers in more locations across its heartland and in doing so achieved another year of record balance sheet size and pre-tax profits of £20m.
David Marlow, Chief Executive of The Nottingham, said: “I am delighted with the performance we have announced today, especially as our ‘all-under-one-roof’ proposition that clearly differentiates us from banks and other building societies, is received so positively by our customers.“
Some of the key achievements and financial highlights in 2015 include:
The Society welcomed 24,000 new customers and opened five new branches.
The Net Promoter Score rose to 74%, which is among the highest in any sector in the UK. (The average Net Promoter Score for financial services is 30%).
Customers rating The Nottingham as “excellent” rose from 68% to 72%.
Gross mortgage lending of £651m resulted in a mortgage book growth of 3%.
Total assets of £3.3bn.
Net interest margin at 1.46%
Pre-tax profit increased by 15% to £20m – with a good contribution from both our estate agency and mortgage advice subsidiaries.
Arrears levels remain very low – less than a quarter of the industry average.
Staff from The Nottingham have raised over £100,000 for local causes who support their themes of homelessness, employability and raising financial awareness.
David Marlow added: “We are the only building society to offer our customers whole of market mortgage advice, acknowledging that in a complex world we can be more relevant to a much broader cross-section of customers. We find the right mortgage solution by searching over 50 different lenders; something we couldn’t always do when only offering our own mortgages. In 2015 we were delighted to provide advice to 80% more customers through this service than last year, with over half the customers being referred by our estate agency operation.
“We also offer a combined home buying, selling, renting and building society service in the majority of our locations; again significantly increasing our relevance to a much broader cross section of customers and we deliver this unique offering through top class customer service. At 74% our Net Promoter Score is among the highest in any sector in the UK, compared to an average for the financial services sector in the UK of 30% in 2015.
“Our branch network is the core of the society and having grown from 31 to 55 branches in just three years we have shown a strong commitment to building and developing our branch network, firmly believing that the high street will continue to play a key role in our increasingly omni-channel world, where customers will expect to deal with us how they want and when they want to.
“As we have invested in the network it has performed even more strongly. Over the past five years, savings balances based in our branches have grown from £0.93 billion to £1.80 billion – the 94% increase, along with a 298% increase in the number of houses we have sold through our estate agency being strong measures of how our core franchise is growing and strengthening and demonstrating that branches remain very popular with our customers.”
Speaking of plans for 2016, David Marlow explained: “Looking ahead we expect to be operating in an uncertain and challenging environment. The current global market turmoil is driving low growth, low inflation and low interest rates, against a backdrop of increasing lending capacity in the economy that has benefitted borrowers with ever decreasing mortgage interest costs but not favoured savers.
“Whilst the Society will continue to compete actively in the mortgage market, as a mutual, we must also ensure we strike an appropriate and fair balance with our savers. In striking this balance we expect to see our income profile trending slightly downwards over the next three years – leading to lower levels of profitability than we have achieved in recent record years.
“However our strong financial platform and forecast performance will enable us to continue delivering our strategy of investing in our member and customer proposition, whilst maintaining sector leading financial strength.”
In 2016 The Nottingham expects to:
Continue to further increase the number of locations offering its ‘all-under-one-roof’ proposition across its heartland.
Continue to focus on how it can be easier to deal with. For example, piloting the provision of advice by video in branches providing greater availability of its advice services across the branch network.
Develop its advice proposition further, encouraged by the enthusiastic response from customers for Whole of Market mortgage advice.
Continue to develop its infrastructure and technology to support the efficient delivery of its unique proposition – including continuing work on how it can utilise the benefits of the digital age to make the Society more accessible to its members.
Continue to make more local people aware of its unique offering and demonstrating how, as a successful local mutual organisation, The Nottingham is committed to playing its part in strengthening the communities in which it operates.
David Marlow concluded: “We will continue to look at ways in which we can improve our offering to make us more relevant to our customers and to ensure that we are best placed to help them manage their finances and achieve their financial ambitions.”
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