The West Brom today announces its half-year results for the six months to 30 September 2019.

Key highlights:

• The average weighted savings rate paid to members was 50% more than the market average¹ (30 September 2018: 42% above), delivering a 31% increase in annualised mutual benefit to savers to £13.7m (30 September 2018: £10.5m)
• An already strong Net Promoter Score®² increasing marginally from +72 at 31 March 2019 to +73, with customer satisfaction up from 94% to 95%
• £251m of new mortgage lending (30 September 2018: £466m), reflecting a deliberate strategy to moderate lending volumes. 43% of new lending was to first-time buyers (30 September 2018: 38%)
• A 7% increase in profit before tax to £6.4m (30 September 2018: £6.0m)
• An uplift in the net interest margin to 1.04% (30 September 2018: 1.02%)
• Delivery of cost efficiencies led to the improvement of the management expense ratio to 0.83% (30 September 2018: 0.88%)
• The Society’s Common Equity Tier 1 (CET 1) capital ratio now stands at 16.2% (31 March 2019: 16.0%)

Jonathan Westhoff, Chief Executive, commented:

The Society has delivered a strong half-year performance, despite an increasingly competitive mortgage market, delivering a 31% increase in annualised member benefit to its savers. A 7% increase in pre-tax profit contributed to an increase in the CET 1 ratio, which not only ensures the Society has the necessary capital to weather any economic challenges that may result from the current political and Brexit uncertainties but is also able to continue to deliver on its purpose by continuing to offer real value to savers and mortgage products that promote home ownership.

Our role in supporting those who aspire to own their home saw advances to first-time buyers accounting for 43% of our total new lending during the last six months. We have continued to broaden our mortgage proposition directed at helping those that find it challenging to achieve their home ownership ambitions, including our new range of shared ownership and assisted mortgage products.

For savers, we continue to offer a range of savings products to fit a variety of requirements, while paying an average interest rate some 50% higher than the market average¹, delivering £13.7m of annualised mutual benefit to savers. We also provide services for retirement and later life planning and have been raising awareness about planning for retirement through a series of clinics hosted by independent financial advisers in our branches.

Despite the heightened levels of political and economic uncertainty surrounding Brexit and a forthcoming general election, the last six months has seen intensified mortgage market pricing competition, created in part by the ongoing availability of very low cost funding. Regrettably this has had the unfortunate outcome of reducing rates available for savers in general and whilst the Society resisted the pressure to lower its savings rates during the first half of our financial year, we have reduced some rates in response to this competitive pressure since the half-year period ended.

As a modern building society, we have become increasingly innovative in how we provide our services to members through our online offering. Over the last six months we have upgraded our website and launched an online mortgage application tracker service to enable our new mortgage borrowers and intermediary partners to view the status and progression of mortgage applications online. Future developments to expand the Society’s online offering are in progress and will continue to be a significant area of focus for us, underpinned by ongoing investment in our core technology platforms to allow greater digital capability and operational resilience.

We expect no let up in the challenges that currently face us, whether that is the ever intensifying margin pressure in the mortgage market, the general economic uncertainty caused by the unknowns around future global trading relationships and the ever escalating focus on climate change which will have an impact on the UK housing stock. Despite these challenges, as a mutual, the West Brom will continue to progress with the best interests of both its saving and borrowing members at the heart of decisions made.

A copy of our Interim Statement is available to view and download here.

1 Average market rates sourced from Bank of England Bankstats table A6.1

2 Net Promoter Score and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.