Final Results
25 2월 2009 - 4:00PM
UK Regulatory
TIDM89VX
RNS Number : 8259N
Principality Building Society
25 February 2009
**Strictly Embargoed until 7am, Wednesday 25th February 2009**
PROFITABLE PRINCIPALITY PUTS SAFETY FIRST
Commenting on Principality's business performance, Peter Griffiths, Group Chief
Executive, said: "In a year of unprecedented financial market conditions, I am
pleased to report a robust business performance as Principality Group continues
to successfully navigate the financial storm.
Our members are entitled to take for granted the simple fact that we can keep
their money safe, that has been our key objective and we have achieved that aim.
We continue to be profitable, our balance sheet is strong and recruitment of new
members is at an all time high. We have continued to safely invest our reserves
and the Society has not been hit by direct losses from exposures to defaulting
UK and overseas banks. Despite the pace, depth and ferocity of problems in the
financial services sector, I believe the Principality brand and franchise has
been strengthened during these testing times."
Key performance highlights:
* Record retail savings balances increased by GBP822.1m to GBP4,626.5m
* Recruitment of over 76,000 new Society members
* 95% of loans funded by customer deposits
* Group assets increased by GBP546.2m to GBP6,398.7m
* Pre-tax profit before Financial Services Compensation Scheme levy (FSCS) for the
Group was GBP14.5m
* Reserves increased to GBP285.0m
Solid Performance
Principality delivered a solid GBP14.5m profit performance before charging an
FSCS levy of GBP5.2m towards the cost of rescuing failed financial institutions.
The core Society continued to deliver its promise to provide attractively priced
savings and investments for both new and existing customers. This, coupled with
the appeal of Principality's trusted brand, led to record retail savings inflows
of GBP822.1m and the recruitment of over 76,000 new members.
Keeping Members Money Safe
Anticipating the economic slowdown Principality took early decisions to curtail
lending growth, especially in its secured loans subsidiary business, Nemo
Personal Finance. Growth plans for traditional Society mortgage lending were
also trimmed back and Commercial Lending volumes reduced.
95% of loans are now funded by retail Society savings balances, ensuring high
levels of liquidity for the business and enhanced returns for savers. The
Society has successfully provided safety and security for our members by
deliberately reducing reliance on wholesale and money market funding.
Wider Group Challenges
The slow down in the housing market posed significant challenges, particularly
in secured loan subsidiary Nemo and Estate Agency Peter Alan. The businesses
responded promptly to changed market conditions taking decisive action and
sometimes difficult measures to contain costs and drive efficiencies.
Principality's Commercial business performed well during the year with arrears
levels well below industry benchmarks.
The economic downturn has resulted in increased provisions during 2008
particularly in the Nemo business. The Group continues to ensure these are
maintained at a prudent level to accurately cover potential losses across the
Group.
Facing the Future with Confidence
Peter continued, "Demands to build up capital, hold record levels of liquidity,
pay savers attractive rates and provide adequate lines of finance for borrowers
posed some real challenges during 2008. However, I believe we have achieved a
good balance. Our approach to the challenges has been proactive and prudent and
as a result our performance has been robust."
David Williams, Principality Chairman added, "Looking forward we do not
underestimate the pressures we can expect to face in 2009. The restricted
availability of credit looks set to continue and economic conditions are not
forecast to improve in the short term. However with a strong capital position,
high levels of liquidity and realistic impairment provisions across the Group we
are well placed to deal with these challenges. We will continue to attract
retail savings as our main source of funding and to look to drive operational
efficiency, customer service and credit quality across our operations.
These priorities will ensure we continue to provide our members with the
security, fairness and success they look for in a mutual building society. The
mutual business model, now more than ever before, resonates more strongly with
savers and borrowers alike. This plays to Principality's strengths and we
continue to face the future with confidence."
-ends-
Notes to editors
* Formed in 1860, Principality is Wales's largest building society.
* The Society is committed to supporting the communities of Wales.
* With more branches (50) in Wales than any other building society, Principality
is the 9th largest building society in the UK.
* The Society has assets of over GBP6 billion.
* Principality is committed to remaining a mutual organisation.
For more information please contact:
Jaime Falarczyk, Corporate Communications Manager: 02920 773208, 07792071669,
jaime.falarczyk@principality.co.yk
Emma Stanford, External Affairs Co-ordinator: 02920 773788
emma.stanford@principality.co.uk
Consolidated income and expenditure statement
for the year ended 31 December 2008
+---------------------------------------------------------------------+------------+--------------+--------------+
| | | 2008 | 2007 |
+---------------------------------------------------------------------+------------+--------------+--------------+
| | | GBPm | GBPm |
+---------------------------------------------------------------------+------------+--------------+--------------+
| | | | |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Interest receivable and similar income | | 388.6 | 327.4 |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Interest payable and similar charges | | (304.0) | (258.8) |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Net interest income | | 84.6 | 68.6 |
+---------------------------------------------------------------------+------------+--------------+--------------+
| | | | |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Fees and commission receivable | | 24.5 | 41.6 |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Fees and commission payable | | (2.8) | (6.3) |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Net fee and commission income | | 21.7 | 35.3 |
+---------------------------------------------------------------------+------------+--------------+--------------+
| | | | |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Other operating income | | 0.6 | 1.1 |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Other fair value gains/(losses) | | 3.2 | (0.3) |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Net operating income | | 110.1 | 104.7 |
+---------------------------------------------------------------------+------------+--------------+--------------+
| | | | |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Administrative expenses | | (57.8) | (62.0) |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Depreciation and amortisation | | (6.1) | (5.6) |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Operating expenses | | (63.9) | (67.6) |
+---------------------------------------------------------------------+------------+--------------+--------------+
| | | | |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Impairment losses on loans and advances | | (31.7) | (6.5) |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Financial Services Compensation Scheme levy | | (5.2) | - |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Operating profit and profit before taxation | | 9.3 | 30.6 |
+---------------------------------------------------------------------+------------+--------------+--------------+
| | | | |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Taxation expense | | (3.6) | (10.1) |
+---------------------------------------------------------------------+------------+--------------+--------------+
| | | | |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Profit for the year | | 5.7 | 20.5 |
+---------------------------------------------------------------------+------------+--------------+--------------+
| | | | |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Consolidated statement of total recognised income and expense | | |
+----------------------------------------------------------------------------------+--------------+--------------+
| | | | |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Profit for the year | | 5.7 | 20.5 |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Actuarial gain/(loss) on retirement benefit obligations | | 0.7 | (1.5) |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Movement in deferred tax relating to retirement benefit obligations | | (0.2) | 0.5 |
+---------------------------------------------------------------------+------------+--------------+--------------+
| Total recognised income for the year | | 6.2 | 19.5 |
+---------------------------------------------------------------------+------------+--------------+--------------+
Consolidated balance sheet
at 31 December 2008
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| | | 2008 | | 2007 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| | | GBPm | | GBPm |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Assets | | | | |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Liquid assets | | 1,390.0 | | 1,196.7 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Derivative financial instruments | | 40.9 | | 10.8 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Loans and advances to customers | | 4,884.3 | | 4,584.0 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Fixed and other assets | | 83.5 | | 61.0 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Total assets | | 6,398.7 | | 5,852.5 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| | | | | |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Liabilities | | | | |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| | | | | |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Shares | | 4,626.4 | | 3,804.3 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Borrowings | | 1,186.0 | | 1,540.0 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Derivative financial instruments | | 70.5 | | 9.9 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Other liabilities | | 36.0 | | 43.0 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Subordinated liabilities | | 125.9 | | 120.9 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Subscribed capital | | 68.9 | | 57.6 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Total liabilities | | 6,113.7 | | 5,575.7 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| General reserve | | 283.5 | | 277.3 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Other reserves | | 1.5 | | (0.5) |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
| Total equity and liabilities | | 6,398.7 | | 5,852.5 |
+-------------------------------------------------------------+------------+-----------------+---+------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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