West Brom said it would retain a small minority interest in Mortgageforce, but was unable to give further details on the deal while confidential discussions continue.
The announcement came at the same time as the lender revealed pre-tax losses of £11.2m for the year to 31 March 2010, down from last year’s losses of £39.3m. Its underlying costs, excluding one-off items such as restructuring costs, have also dropped by 26%, as it continues to implement its ‘Back to Basics’ strategy. This entails focusing its strengths as a regionally-based building society and concentrating on its core activities of savings and residential mortgages.
In the last year, West Brom gained more than 72,500 new customers, who contributed £2.9bn to its retail balance. This means that its residential mortgages are now covered 1.29 times by retail balances, while rates have fallen by an average of 2.1%.
Robert Sharpe, chief executive of West Brom, said: “The improvement on last year’s results clearly indicates that we are starting to see the benefits of the West Brom’s Back to Basics strategy.
“This means that we have split the group between the traditional building society operations and those that are now in run-off, such as commercial lending, and we are applying the right management focus and skills to each.”
