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Newcastle Building Society announces 2023 financial results

Date published: 1 March 2024

Read time: 8 minutes

Newcastle Building Society's Cobalt headquarters in spring

(Note: financial results quoted are for the full year to 31 December 2023 (and equivalent period in 2022, unless stated)

Newcastle Building Society has published its results for 2023, highlighting a strong performance whilst remaining true to its Purpose and delivering value for Members.

In a challenging period, shaped by wider economic uncertainty and market volatility, the Society provided additional support to borrowers, consistently offered savings rates above the market average, and continued to grow, invest in infrastructure, and make a positive difference in its communities including a commitment to branches and the provision of access to face-to-face financial services.

2023 highlights include:

  • Average savings rates of 3.03% over the year compared to a market average of 2.46%, equating to an additional £25m interest for Members over the period
  • A competitive Standard Variable Rate (SVR) for mortgages 1.24% lower than the market average, saving our SVR borrowers over £2.3m in interest payments compared to the market average
  • More than £500,000 in estimated financial benefit for Members and colleagues provided through the Helping Hand service, delivered with Citizens Advice Gateshead
  • A contribution of more than £350,000 to local communities, including a donation of more than £200,000 to the Newcastle Building Society Community Fund at the Community Foundation Tyne & Wear and Northumberland
  • Provision of grants from the Newcastle Building Society Community Fund totalling £170,253 to 45 local charities focusing on employability, debt management, homelessness, food poverty, and the environment
  • More than 10,000 hours of colleague volunteering completed in support of local good causes
  • Completion of the merger with Manchester Building Society
  • Total Group customers grew by 5.8% in the year to just under 400,000, and included 5,800 new mortgage customers, and 11,000 members who joined as a result of the merger with Manchester Building Society

2023 financial highlights include:

  • Operating profit before impairments and provisions of £31.4m (2022: £31.4m)
  • Group profit before tax of £29.1m (2022: £32.6m)
  • Underlying operating profit of £32.8m (2022: £26.7m) 
  • Gross mortgage lending for 2023 of £1.1bn, consistent with record levels in 2022 (2022: £1.1bn)
  • Net core residential lending of £575m (2022: £586m)

Newcastle Building Society chief executive officer, Andrew Haigh, said:

“I’m proud that, as a Society, we have remained true to our Purpose of ‘connecting our communities with a better financial future’ while delivering another set of strong results in 2023. We have continued to focus on the strategic ambitions underpinning our Purpose of achieving growth, investing in the Group’s infrastructure for the long term and of course, delivering value for our Members.

“The volatile market conditions throughout 2023 will have impacted all our Members but borrowers, and especially those remortgaging from historically low fixed rates to the higher rates that prevailed during the year, faced higher repayments, adding to the squeeze on their household finances.

“My hope is that Members recognise the value that comes with being part of our mutual organisation; the additional support we’ve provided to those worried about their mortgage repayments, consistently offering savings rates above the market average and making a positive difference in our communities across key areas of focus, including our commitment to branches, increasing access to face-to-face financial services and fostering employability within the region.”

In a dynamic rate environment – the Bank of England base rate was 3.5% at the start of 2023, increasing to 5.25% by August, where it held for the remainder of the year – the Society was quick to sign up to the Government’s Mortgage Charter and provided customers with additional support options. This, along with its sensible approach to lending, has helped keep mortgage arrears below the market average.

Further support was made available to all Members through the Society’s free-to-use Helping Hand service delivered with Citizens Advice Gateshead, which quickly provides expert advice, information and support on a range of issues. In its first full year of operation in 2023, the Helping Hand service led to more than £500,000 in estimated financial benefit for Members and colleagues through a combination of grants and benefits realised as a result of the advice and support received.

Over the course of 2023, the Society’s mortgage Standard Variable Rate (SVR) remained one of the most competitive on the market at 6.94%, against a market average in December 2023 of 8.18%, saving its SVR borrowers over £2.3m in interest payments over the year. At the same time the Society’s average savings rate of 3.03% compared favourably to the market average of 2.46%, equating to an additional £25m interest for savings Members over that period.

In 2023, banks across the UK announced another 600 branch closures, adding to more than 5,000 closures since January 2015. Newcastle Building Society re-emphasised its commitment to branches, highlighting how its innovative approach to the delivery of essential face-to-face financial services provides a successful blueprint for future branches which could help shape the wider market. For savers who prefer using a passbook the Society has committed to continue to provide them for as long as they are valued.

The Society also reported an increase in demand for its financial advice service, which remains accessible to all through the branch network. In 2023, over 9,000 appointments were undertaken by the Society’s qualified team of advice experts from its wholly owned subsidiary, Newcastle Financial Advisers Limited.

Andrew Haigh added:

“When announcing closures, banks regularly cite the cost of running a branch network and dwindling usage. We reject this premise. We know the social and personal cost of financial exclusion and the impact of withdrawal of essential services from our high streets. We believe that something has to change in order to reverse this trend and we are keen to do what we can both to support our communities and to advance wider thinking on the subject.

“Whilst online provision grows and has an essential role to play in a range of ways customers choose to access their providers, our Members are unequivocal in their desire for face-to-face as one of the ways they want to interact with us. It remains our belief that by putting our Members’ interests first and taking a more creative approach to the future of branches, we can continue to offer the level of service, reassurance and convenience that is only available by speaking to a friendly face at a local branch.”

In 2023, the Society started work on a new community branch in Newcastle city centre, sharing plans for its Monument branch which will offer best-in-class access to financial services and a welcoming space for the benefit of the wider community when it opens later this year.

The Society made a financial contribution of more than £350,000 to its communities in 2023, including a donation of more than £200,000 to the Newcastle Building Society Community Fund at the Community Foundation Tyne & Wear and Northumberland. Grants from the Community Fund totalling £170,253 went to 45 local charities focused on addressing employability, debt management, homelessness, food poverty, and the environment.

Skills support partnerships with Newcastle United Foundation, the Prince’s Trust and Walking With The Wounded continued to work towards bridging the employability skills gap, aiming to support talented individuals, who might otherwise not get a chance, to achieve their potential and become work-ready by developing valuable skills and building confidence.

In 2023, the Society’s work with Newcastle United Foundation through the flagship NU Futures programme reached more than 7,000 pupils through school workshops, with colleagues delivering sessions on money management, skills and confidence building, and interview practice.

The Society’s savings management and IT subsidiary, Newcastle Strategic Solutions Limited, continued to support clients with record volumes of account opening and retail deposit growth, now managing over 1.5m savings accounts and approaching £50bn in savings balances on behalf of clients.

Andrew Haigh concluded:

“In a difficult year, we have continued to deliver for our Members, our communities and our colleagues. We demonstrated the character and resilience required to navigate uncertain and fast-changing market conditions. Not only were we able to grow the business, and deliver a merger with Manchester Building Society, we’ve attracted new customers, supported Members where needed, offered good value, and continued to invest in the future of the organisation.

“These remain challenging times but I believe the Society is well placed to respond and to achieve new levels of performance through our ambition and continued investment and that our ever greater focus on delivering value to Members will amplify the positive impact we make in our communities.”

Read the full Stock Exchange Announcement - Full Year Results 2023 (PDF)