Image showing Julie-Ann Haines, Chief Executive Officer of Principality

5 August 2021

Principality has posted good interim results as it continued to invest in its technology, people and communities

The building society has helped more than 1,500 first-time-buyers get a home during the first six months, helped many members cope with the financial uncertainty created by the COVID-19 pandemic, and supported communities by keeping its branches open throughout the winter lockdown period.  

Julie-Ann Haines, CEO at Principality Building Society, said: “As a mutual, member-owned building society, our aim has never been to maximise profit but to focus on the long-term future of the Society. We have made a decision to be much more purpose driven so we can not only achieve our objective to help people get and stay in their homes for longer but also have a positive impact on improving the prosperity and resilience of customers, colleagues, clients and communities.

“The economic environment looks to be more optimistic than the previous 18 months, although the impact of the coronavirus pandemic will shape both the wider environment and our Society for years to come. Principality remains a safe home for savings, our capital and liquidity levels remain strong, well in excess of regulatory requirements and will able to withstand any challenging economic and market conditions. 

“Our focus remains on helping members to get a home and stay in a home for longer, to become a much more purpose-led and sustainable business, and to honour our commitment to developing and growing our business in a safe and secure way. We recognise that expectations of us are changing, so we will continue to adapt, invest and improve so that we remain relevant for the long term and ready to face future challenges.

“I am very proud of how our colleagues continued to provide award-winning service and the efforts of our branch network to stay open during the winter lockdown. It has been a very difficult period for the High Street but we remain committed to our branch and agency network, serving 70 communities across Wales and the Borders. 

“Whilst our members continue to value and visit our network then we will continue to support communities as we have done through lockdowns. This focus on our high street does not deflect us from our focus on developing technology to respond to the demand from members and customers to interact over the phone, over video and digitally to enable them to manage their financial affairs.”

A resilient financial performance with an improving economic backdrop


Total assets of £10.9bn (31 December 2020: £11.1bn)
Retail mortgage balances of £8,200.4m (31 December 2020: £8,175.7m)
Savings balances have remained consistent at £8.2bn (31 December 2020: £8.2bn)
Net retail mortgage lending for the first six months of the year of £24.7m (30 June 2020: £118.7m)
Statutory profit before tax of £33.1m (30 June 2020: loss of £6.4m)
Underlying profit before tax of £28.6m (30 June 2020: loss of £3.5m)
Strong capital with a Common Equity Tier 1 ratio of 30.70% (30 June 2020: 24.48%)
Customer Service Net Promoter Score of 80.8% (30 June 2020: 81.2%)
Net interest margin of 1.14% (30 June 2020: 0.99%)

Net retail mortgage lending was £24.7m in the first six months of this year (June 2020: £118.7m). Although retail lending is relatively flat, mortgage applications remain strong in a housing market being supported by stamp duty reliefs. We expect net retail mortgage lending to remain relatively flat throughout 2021 as we embed our new mortgage platform and manage application volumes in the short term.  

Balancing the needs of savers whilst remaining competitive in the mortgage market is a constant focus and the savings rates offered to members were directly impacted by the interest earned on mortgages. Principality still delivered an average rate to savers of 0.77% compared to the market average of 0.32%  over the same period, maintaining its position as one of the best on the high street.

In 2020 Principality increased its provisions for potential future loan losses because of the great economic uncertainty caused by the pandemic. Over the last six months the economic outlook has improved and is much more promising for 2021 and beyond. The housing market is buoyant and employment is stable, although the impact of the tapering off of furlough scheme has yet to materialise, which has reduced the overall level of provisioning. 

This reduction in provisions for losses on mortgages is largely responsible for a strong profit in the first six months of 2021, in the same way that increased provisions during the earlier stages of the pandemic last year resulted in lower levels of profitability in 2020. This has had a significant impact on results for this interim period, with an underlying profit before tax of £28.6m (six months to 30 June 2020: loss of £3.5m) and statutory profit before tax of £33.1m (six months to 30 June 2020: loss of £6.4m).

Please click here to view the full interim results report.

Published: 05/08/2021

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