Country-by-Country Reporting

COUNTRY-BY-COUNTRY REPORTING

The Capital Requirements (Country-by-Country Reporting) Regulations 2013 introduced reporting obligations for institutions within the scope of the European Union’s Capital Requirements Directive (CRD IV). The requirements aim to give increased transparency regarding the activities of institutions.

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RELATION TO THE COUNTRY-BY-COUNTRY (CBCR) INFORMATION

The Directors of West Bromwich Building Society (the Society) are responsible for preparing the CBCR Information for the year ended 31 March 2015 in accordance with the Capital Requirements (Country-by-Country Reporting) Regulations 2013. In preparing the CBCR Information, the Directors are responsible for:

- interpreting the requirements of the Capital Requirements (Country-by-Country Reporting) Regulations 2013;

- determining the acceptability of the basis of preparation of the CBCR information;

- making judgements and estimates that are reasonable and prudent; and

- establishing such internal control as the Directors determine is necessary to enable the preparation of CBCR Information that is free from material misstatement, whether due to fraud or error.

The CBCR information does not constitute the Society’s statutory accounts for the financial year ended 31 March 2015.  Statutory accounts for the year ended 31 March 2015 have been delivered to the Financial Conduct Authority. The auditor has reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 79 of the Building Societies Act 1986.

The CBCR information was approved by the Board and signed on its behalf by:

Mark Gibbard
Group Finance & Operations Director
17 December 2015

CBCR INFORMATION

Name, nature of activities and geographical location

West Bromwich Building Society (the Society) is the 7th largest building society in the UK.  As a mutual organisation, the Society is owned and run for the benefit of its members with the safety of members’ funds being paramount.  In providing a safe haven for members’ funds, the Society can fulfil its primary purpose of enabling home ownership through the provision of mortgages.

The consolidated financial statements of the West Bromwich Building Society Group (the Group) include the results of the Society, its subsidiary undertakings and a number of securitisation entities.  The consolidated entities, their principal activities and countries of incorporation are detailed in note 15 to the Annual Accounts for the year ended 31 March 2015.  All of the consolidated entities were incorporated in the United Kingdom (UK), with the exception of Hawthorn Finance Limited which was incorporated in Jersey. Hawthorn Finance Limited does not transact with entities outside the Group and has no employees. 

Number of employees

The average number of Group employees during the year ended 31 March 2015, all of whom were employed in the UK, was 725.

Turnover

Group total income for the year ended 31 March 2015 was £56.5m and arose fully in the UK.

Pre-tax profit or loss

Group profit before tax for the year ended 31 March 2015 was £12.4m and arose fully in the UK.

Corporation tax paid

The Group made corporation tax payments of £1.5m in the UK during the year ended 31 March 2015.

Public subsidies received

The Group received no public subsidies during the year ended 31 March 2015.

BASIS OF PREPARATION

The CBCR information for the year ended 31 March 2015 has been prepared on the following basis:

The CBCR information is consistent with the consolidated Annual Accounts of the Group.  The Annual Accounts were prepared in accordance with International Financial Reporting Standards as adopted by the EU and effective at 31 March 2015.

- The number of employees has been calculated as the average number of full and part-time employees, on a monthly basis, as disclosed in note 7 to the Annual Accounts.

- Turnover represents Group total income as disclosed in the Group Income Statement. Total income comprises net interest, fees and commissions receivable and other operating income, together with fair value gains/losses and net realised profits/losses on financial instruments.

- Pre-tax profit or loss represents the Group profit or loss before tax, as reported in the Group Income Statement.

- Corporation tax paid represents the amount of tax paid during the year, as disclosed in the Group Cash Flow Statement. 

Public subsidies received represent direct support by the government and exclude any central bank operations that are designed for financial stability purposes or operations that aim to facilitate the functioning of the monetary policy transmission mechanism.

INDEPENDENT AUDITOR’S REPORT TO WEST BROMWICH BUILDING SOCIETY (‘the Society’)

We have audited the accompanying Country by Country Reporting information (‘CBCR Information’) as at and for the year ended 31 March 2015, which has been prepared based on the requirements of the Capital Requirements (Country-by-Country Reporting) Regulations 2013 as interpreted by the Directors of the Society as set out in the basis of preparation.

This report is made solely to the Society, in accordance with the agreed terms of our engagement.  Our audit work has been undertaken so that we might state to the Society those matters we have agreed to state to it in this report, and to facilitate the Society’s compliance with the requirement for audit of the Society’s CBCR Information set out in Regulation 2(7) of the Capital Requirements (Country–by-County Reporting) Regulations 2013, and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Society for our audit work, for this report, or for the opinions we have formed. 

Directors’ responsibilities for the CBCR Information

As explained more fully in the Statement of Directors’ Responsibilities, the Directors of the Society are responsible for the preparation of the CBCR Information in accordance with, and for interpreting the requirements of, the Capital Requirements (Country-by-Country Reporting) Regulations 2013, for determining the acceptability of the basis of preparation, and for such internal control as the Directors determine is necessary to enable the preparation of CBCR Information that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibilities

Our responsibility is to express an opinion on the CBCR Information based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the CBCR Information is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the information being audited. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the preparation of the information being audited in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates, if any, made by the Directors, as well as evaluating the overall presentation of the information being audited.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the CBCR Information as at and for the year ended 31 March 2015 has been properly prepared, in all material respects, in accordance with the requirements of the Capital Requirements (Country-by-Country Reporting) Regulations 2013 as interpreted by the Directors as set out in the basis of preparation.

Basis of preparation

Without modifying our opinion, we draw attention to the basis of preparation.  The CBCR Information has been prepared for the purposes of the Capital Requirements (Country-by-Country Reporting) Regulations 2013 and may not be suitable for another purpose.         

Jonathan Holt
for and on behalf of KPMG LLP

Chartered Accountants
One Snowhill
Snow Hill Queensway
Birmingham
B4 6GH
17 December 2015