Principality unveils results

Year-on-year highlights:

• Group assets grew by 9.86 per cent, exceeding £4.65 billion (June 2005 - £4.2 billion)

• Group profit before tax increased by 13 per cent to £11.0 million (June 2005 - £9.7 million)

• Group mortgage balances grew to £3,742.6 million (June 2005 - £3,396.1 million)

• Mortgage advances grew by 39 per cent to £623.1 million (June 2005 - £446.7 million)

• Savings up by £187 million to £3.3 billion

• Winner of employer of the year for Wales and the West Country.

Peter Griffiths, chief executive of Principality Building Society, said: “We have delivered a good set of results for the first half of 2006 and are on course to hit our targets for the year. Group assets have increased to over £4.65 billion and pre-tax profits are up by 13 per cent to £11.0 million. The steady housing market and a competitive range of mortgage products have also ensured a growth in mortgage advances to £623.1 million – an increase of 39 per cent. Our savings book is also strong and has hit £3.3 billion.

“Principality’s subsidiaries have performed ahead of plan. Nemo Personal Finance Ltd, a personal secured loans business, now employs 140 staff in Cardiff and is continuing to deliver good returns. Peter Alan estate agency broke all records with an outstanding first half to the year and the commercial lending division broke through the £600m lending barrier in June.

“Our newest subsidiary,, launched in June. This is an example of how we are using technology in an innovative way to enable customers to access advice about the whole of the mortgage market via web and phone from the comfort of their own home or office. We are aiming to develop this proposition further later this year to offer pensions and investment advice.

“As our subsidiaries prosper, the profit generated enables us to build a more sustainable business and provide real member value to our core building society customers. We continue to look for other opportunities to invest in new businesses to offer a wider range of products and services for our members.

“Earlier this summer we raised £120 million in capital to support the group’s growth plans over the medium term. The deal has extended our footprint in the capital markets - a total of 24 investors participated in the transaction, of whom 20 were new to Principality. Our credit story was well received by the London and Edinburgh based investors – reflecting our strong Welsh franchise and robust 2005 performance.

“The building society is continuing to widen its presence in Wales. We are investing on the high streets of Wales and the borders and have relocated two of our branches to more prominent locations in Neath and Mold. We also announced a new sponsorship deal with the Football Association of Wales in August and now sponsor the Welsh Football Premier League. This is in addition to our sponsorship of the rugby premiership in Wales which associates us with a sport which is at the heart of many Welsh communities.

“We are also developing our services, to extend beyond our traditional branch network, via the web. We launched a bilingual online mortgage application facility earlier in the year and we will be building our e-commerce capability and bringing online savings accounts to customers in early 2007.

“Our AGM in March was well attended and a record 16 per cent of our members voted helping us to raise £35,000 for our elected charity of the year, Breast Cancer Care Cymru/Wales. We have also strengthened the board of directors and David Williams, previously deputy chairman, has been appointed chairman of the Society.”

“We continue to invest in the development of our staff and are proud to have won the employer of the year award for Wales and the West Country. We also received the bilingual business of the year award for our commitment to the Welsh language. We move into the second half of the year encouraged by the progress made by the Society. We will sustain our focus on providing first class service to our customers and maintaining our position as the leading Welsh provider of mortgages and savings.”