Manchester Building Society reports lower first half income and profits

Manchester Building Society has reported a fall in net income for the six months to June 30, 2022, and a fall in pre-tax profits.

The society achieved net income of £2.468m in the reporting period, down from £3.111m in the same period a year ago.

Pre-tax profits of £2.021 for 2022 were a huge reduction from the £22.009m from a year ago, but most of that comprised legal damages and interest, and legal costs recovered from its long-running court case with former auditors Grant Thornton. This year’s accounts also included £2.4m in legal costs recovered.

The society said no further costs or recoveries are outstanding in relation to the Grant Thornton court case.

Excluding the items relating to the legal case, a loss before taxation of £0.4m was recorded in the period, compared with a £0.2m profit in 2021.

Total assets for the six months stood at £189.004m, compared with £232.701m a year ago, an eight per cent decrease.

Administrative expenses of £2.5m increased by £0.2m compared with the same period in 2021 reflecting the transition to a new banking system.

The society is considering its strategic options following the judgment of the Supreme Court case and announced earlier this week that it has signed an exclusivity agreement with Newcastle Building Society to explore the possibility of a merger by way of a transfer of the society’s engagements to Newcastle.

It said the discussions are at an early stage and, as such, there can be no certainty that any merger will occur. Until an alternative strategy is agreed, the society continues to follow its existing medium to long term strategic plan.

The group said it continues to meet all its regulatory capital requirements and to have a strong liquidity position.