Solid performance in readiness for transformation

Principality Building Society has announced solid results for the year ending 31 December 2025. Against a backdrop of elevated rates and economic uncertainty, the UK's 6th largest building society has delivered real value for both savers and borrowers – helping more people grow their savings and buy a home. 

Under new leadership, Principality is sharpening its focus on commercial performance as it reinforces its commitment to its Members through the delivery of a strong digital offering that complements its unique branch presence. 

Wales’ largest mutual is staying true to its roots, balancing the need to drive returns with delivering its purpose, enabling investment to transform the business to support future generations of customers and Members. 

Performance highlights:

• Our statutory profit before tax has grown to £60m (2024: £49.2m)
• Efficient management of our running costs has brought our Statutory Management Expense Ratio down (0.84% in 2025, 0.94% in 2024)
• Our mortgage book has grown by £0.6bn, taking our residential lending to £11.1bn (2024: £10.5bn)
• We’ve grown our savings balances by £0.8bn to £11.6bn in 2025 (2024: £10.8bn)
• Record number of first-time buyers as we increase our total to 8,277 (2024: 8,120)

Iain Mansfield, Chief Executive Officer of Principality Building Society said: 

“Having served this business for the last 10 years of my career, I’m immensely proud to be leading the Society. It's the start of a genuinely transformational period, one where we will take the next bold steps to reimagine how we deliver for our Members.

The pace of societal change is rapid, with advancements in technology reshaping financial services markets and customer expectations. 

At the same time, Members and businesses face a volatile external environment and economic uncertainty, with the Bank of England base rate remaining elevated.”

Our Financial Results

“2025 has been a year of progress for the Society. A year where we moved the organisation forward in meaningful ways, while delivering real value for our savers and our borrowers – helping people to save and to buy their own homes. 

Despite this backdrop, your Society has delivered robust financial results with profit before tax of £60m (2024: £49.2m) as we stay focused on creating value for our Members.

We have continued the work to streamline and simplify our business, and as a result our Management Expense Ratio (ManEx), the cost of running the business, has fallen to 0.84% (2024: 0.94%).

Across our savings and lending businesses, there is positive news to report. 

In the second half of 2025, we strengthened our funding portfolio by establishing a covered bond programme, enhancing the Society’s financial resilience, stability and access to capital markets, while increasing funding diversity and optionality in line with competitors. I am also pleased to share that we have repaid our Term Funding Scheme with additional incentives for Small and Medium-sized Enterprises (TFSME) in full.

We’ve also grown our savings balances by £0.8bn to £11.6bn in 2025 (2024: £10.8bn), as we strive to maintain Member value through our retail network while keeping a sharp focus on driving forward our digital savings channels.

As a responsible business, we have prioritised returns over growth, while also utilising excess liquidity which is why our total assets now sit at £13.9bn (2024: £14.1bn). 

Our prudent lending practices mean that in the face of competitive savings and lending markets, we have still seen sustainable net growth in our mortgage book of £0.6bn, taking our residential lending to £11.1bn in 2025 (2024: £10.5bn), and our cumulative growth over the last three years to £2.8bn.

Despite the falling Bank of England base rate - we have converted cash into higher yielding mortgage assets, which has allowed us to stabilise Net Interest Margin, year on year (2025: 1.21%, 2024: 1.22%). 

I’m pleased to share that we maintained a strong capital and liquidity position during the year, with a capital ratio of 18.7% (2024: 19.8%) and liquidity ratio of 13.6% (2024: 18.9%), providing a solid foundation for continued growth and investment in the Society, ensuring we are able to meet the needs of our Members now, and in the future.”

Lending Business – Where Home Matters 

Iain continued: “Helping people own their own homes remains at the heart of what we do, central to our strategy, and driver of the growth of our mortgage book to 88,941 Members in 2025 (2024: 87,558). 

In the face of easing affordability, buyer demand has remained resilient. With a strong demand for our 95% LTV products, combined with our inclusive lending criteria, we helped 8,277 people take their first step onto the property ladder (2024: 8,120). 

We continue to invest year-on-year in enhancing the intermediary experience, making it easier for brokers to do business with us. This commitment is reflected in our recognition of Best Building Society for Customer Service in 2024 at the What Mortgage Awards, an award we have received for the 8th consecutive year.

Principality Commercial 

Iain continued: “Our lending goes further, with our commercial lending business helping to create new homes in areas that need them, funding both social and private homes and boosting affordable housing provision. With aspirations to reach £1bn in 2026, the lending book for the commercial business grew by 9.3% since the start of 2025 to £867m (2024: £793m), with £70m lent to Housing Associations (2024: £51m).  

Building on our success in Wales, our commercial business took its first steps into the English housing association market, with Rochdale Boroughwide Housing Association. The £20m of funding provided by Principality will go towards maintaining and improving the housing association’s existing stock of social and affordable homes in the east Greater Manchester area.  

The commercial business remains a key strategic priority, as we continue to strengthen our work with Welsh Government and local authorities in Wales, to help more people buy their own home, revitalise town centres and provide funding to the majority of housing associations in Wales .”

Savings Business – Helping More People to Save 

Iain continued: “2025 has been another strong year for our savings business, with more people choosing to save regularly with Principality than ever before (2025: 94,521, 2024: 81,871). 

Delivering value to our Members is what sets us apart from traditional banks, who focus on returns for shareholders.  I’m proud that Principality consistently provides competitive savings rates that reward loyalty, with £88m value returned to Members through above market average savings rates. 

Making it as easy as possible to start saving is a priority, whether online or in person at one of our 54 branches or 15 agencies.
With this in mind, I’m pleased to report that work has started on delivery of the first phase of our new mobile app, following the launch of our new website in 2024. 

Alongside our digital journeys, we reaffirmed our commitment to our branch network until at least 2030 . As traditional banks withdraw, Principality remains rooted in our communities - relocating our historic Swansea branch to a more central location to protect choice for local Members.”

Making a difference in the communities we serve

Iain continued: “As the financial services provider with the largest branch footprint in Wales, we know our impact makes a meaningful difference. I was pleased to see the 5th round of our Future Generations Fund launched, which saw £500,000 distributed to projects in local communities. 

2025 also saw the launch of our partnership with the children’s charity Barnardo’s Cymru. Through the generosity of colleagues and Members, over £237,000 has been raised, directly supporting vulnerable children in communities across the country. This contribution brings our total charitable fundraising to more than £2m since 2014 as we continue to invest in our communities.

At Principality, inclusion and diversity are not standalone initiatives. They are baked into our DNA. I’m proud that our inclusivity by design approach has been recognised once again in the Inclusive Top 50 UK Employers list.”

Looking Ahead

Iain continued: “This is a pivotal moment for the Society, as we navigate a period of subdued economic growth, balancing the needs of savers and borrowers as we face into the Bank of England projected rate declines, while also recognising the need to invest and evolve the business for the longer-term. 

This means reimagining how we deliver for Members now, as a trusted, digital, Society with excellent customer service that is easy to do business with, while also using our convening power in the sector to drive impact beyond our scale.   

We are a mutual with the scale, ambition and a sharp commercial focus that will enable investment that continues to drive results and ensure we remain relevant for our Members today and tomorrow.”