Pandemic hits building society’s profits
Pre-tax profits fell at West Bromwich Building Society during the first half of its financial year after it set aside additional provisions for credit losses as a result of the Covid-19 pandemic.
For the six months to September 30, profits fell from £5.5m to £2.9m.
Its new mortgage lending totalled £248m for the period, down from £251m, 48% of which was for first time buyers, a fall from 56%.
Jonathan Westhoff, chief executive, said: “Set against the challenges of operating in full lockdown for half of the period, I’m pleased to report the Society has delivered a robust first half performance.
“Throughout this period, we have been focusing on prioritising the wellbeing of our members, colleagues and communities, remaining operationally and financially resilient and ensuring our products, services and premises are safe and accessible.
“We responded to the first lockdown back in March by adapting our operating model to ensure we could maintain our high service standards. We did not place any employees on the furlough scheme, and ensured all employees were paid their full salary irrespective of whether they are required to work their full contractual hours. We supported homeworking for a high number of employees, and reduced the number of people working in our head office and branches to enable social distancing. A priority was to support our most financially vulnerable borrowers, and help them access a payment deferral and other specific support measures if required.
“Our activity in the mortgage market, after a relatively short hiatus at the start of the first lockdown, recovered strongly. The knock on effects of a pause in the housing market mean that gross lending for the six months to September does not accurately reflect the true strength of our performance; compared with the same period last year, our application volumes were up 39% to £563m.”
He added: “I am extremely proud of the efforts of all my colleagues, who have remained resolute in their determination to ensuring the Society could continue to deliver its Purpose. When considering the progress the Society has made over the last decade to repair its balance sheet and deliver a strong capital position, this gives us the confidence that we will certainly weather the storm financially and, most importantly, continue to support both our current and future members. For the second half of the year, the outlook remains uncertain as we grapple with the ‘second wave’ of the pandemic, and second lockdown, despite the most recent optimism of a vaccine potentially improving the longer term outlook.
“That is why we will adapt and continue deliver the best service for both our saving and borrowing members and, crucially, be there for those who find themselves in financial difficulty as a result of this crisis.”
