Here at Ipswich Building Society we’re pleased to announce our results for the financial year ended 30 November 2019. Despite the fragile economy and Brexit casting a year-long shadow over the UK’s politics, we performed well and remain focused on meeting the needs of our members for mortgages and savings.
2019 at a glance
- Total profit (before tax) of £1.9m (2018: £3.3m)
- Mortgage completions of £115m (2018: £107m)
- Savings balance growth of £31m, taking overall deposits to a record £603m (2018: £572m)
- Total regulatory capital £35m (2018: £37m)
The reduction in profit is partly related to the cost of funding the higher savings balances, together with significant investment in IT infrastructure and adverse fair value movements on derivatives.
Mortgages
We saw our mortgage completions increase over the year, despite an overall reduction in the size of our mortgage book due to a high number of planned, low margin redemptions. This has enabled us to focus on building a high quality, low risk mortgage book.
We’ve also made a number of enhancements to our mortgage offering, including exclusive products for first time buyers, new Retirement Interest Only mortgages as an extension to later life deals and the launch of holiday let deals for those looking to rent a property out to short-term tenants.
Our intermediary partners accounted for 90% of mortgage business, and we have embarked on a programme of widening our availability through trusted networks and clubs.
Savings and branches
Savings growth was one of our priorities in 2019, and our strong performance has enabled us to both repay £4m of subordinated debt* early – resulting in savings on interest payments over the next five years – and also repay £15m of Term Funding Scheme** earlier than planned.
Retail savings will continue to be one of our priorities over the next twelve months, and work continues to develop and implement an online savings proposition. We have already laid the groundwork for this by bolstering our IT team and digital infrastructure.
Our branch network remains at the very core of our proposition, with the Society being the last remaining financial services provider in both Aldeburgh and Halesworth following the closure of other banks and building societies on the high street. During the year we refurbished our Hadleigh branch, returning the building to its original ‘Suffolk Pink’ colouring and aptly timed to celebrate 40-years on the high street.
Plus, through branch adoption of grass-roots charities, over £36,000 was donated through our Mutual Advantage and We Care savings accounts.
A view from our Chairman, Alan Harris
“As well as undertaking the many activities very visible to members and the community, last year much time and effort has been invested behind the scenes in our governance and oversight as this, quite rightly, remains a key focus for our Regulators. We continue to apply our Enterprise Risk Management Framework to give oversight and scrutiny of operations, finances and decision making. In short, this means taking business risks that are within appetite and ensuring they are effectively managed.
“We anticipate 2020 being another challenging environment for financial services. Activity in the housing sector is reduced and house price inflation is low, or in some areas, in decline, and we anticipate strong price competition in mortgages as well as savings in the near future. However our strength is in our simplicity and we remain focused on delivering only for our members as a strong and committed mutual.”
* The subordinated debt was external support obtained a number of years ago to increase the capital base. By repaying it significantly reduces future interest costs whilst maintaining a strong balance sheet.
** Term Funding Scheme repayments were originally scheduled to commence in 2020, which was an optional target set by the Society with contractual repayment commencing the following year.
