Annual Results

24 October 2006

MONMOUTHSHIRE BUILDING SOCIETY POSTS RECORD PRE-TAX PROFIT AS MUTUAL STATUS CONTINUES TO BENEFIT MEMBERSHIP

Monmouthshire Building Society, one of Wales’s largest financial institutions, today announces a record 15% hike in pre-tax profits to £3.41m (£2.95m) for the 12 months to April 30, 2006.

In its 137th year in existence, the Newport-based mutual society also reports an 8.29% increase in asset growth to a record £485m and a 14th successive year’s reduction in its management cost ratios.

The Society further announces plans to substantially increase its activity in the Swansea region, which will see the opening of a high-profile city centre presence in the next 12 months or so, and the expansion of its increasingly successful subsidiary Monmouthshire Independent Financial Advisers Ltd (MIFA).

Announcing another highly successful year for the Society, Chairman Mr John Farrow said, “We operate in a highly competitive and fast changing world. Recent years have seen ever increasing competition and momentous change in the financial services industry.”

“However, the Society remains financially strong, vibrant and competitive and continues to grow rapidly and increase market share. We remain confident in our ability to react positively to change, to compete and to perform well.”

“We plan continued, controlled expansion in business areas where we have established expertise together with further reductions in cost ratios and improvements in efficiency which, when coupled with the pricing advantage provided by our mutual status, will enable us to become even more competitive,” Mr Farrow added.

Managing Director Mr Andrew Lewis said the Society continued to be proud of its mutual status, which allows management to take a long term view and seek sufficient profit only to maintain reserves and underpin growth.

“There is no doubt that consumers are best served by a continuing strong mutual sector, providing choice and value,” he added. “We are also very proud of our reputation as one of the most efficient building societies and having achieved reductions in cost ratios for 14 years.”

The year saw gross lending of £90m by the Society, based on its ability to maintain its standard mortgage rate below the accepted norm and continue to offer a range of attractively priced tracker, discounted and fixed mortgage products.

It also launched a new competitive re-mortgage product with no up-front fee and a new ‘First Home’ mortgage for first time buyers.

In addition, Mr Lewis said the Society had built a quality commercial and residential buy-to-let loan book. “We have earned a reputation for offering attractive terms to applicants who meet our stringent underwriting criteria, the outcome of which is an extremely well performing loan book.”

The Society has invested considerably in its online capabilities, leapfrogging other larger societies in allowing customers to view and transact savings accounts online, and it also initiated good corporate governance practices by actively seeking applications from within its own membership for a future non-executive position.

The Monmouthshire Building Society Group employs more than 100 people and is a major supporter of the community across the region.

The Society provides both financial and practical assistance to numerous youth and adult sporting leagues, local events, charity fundraising and arts festivals.

In addition, through its Charitable Foundation which is managed by independent trustees, it also supplied grants to more than 20 locally based organisations during the year, covering a wide spectrum of social needs.

Highlights of 2005/06 included

• Total assets growth of 8.29% to £485m (£448m);
• Gross lending increased of £90m;
• Pre-tax profit of £3.31m (£2.95m);
• Savings balances up £22m;
• Management expense ratio reduced for the 14th successive year










 
 


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