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Principality lent £2bn of mortgages in 2018 with further technology investment on course

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  • 07/02/2019
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Principality lent £2bn of mortgages in 2018 with further technology investment on course
With nine out of ten of its mortgages introduced by brokers, Welsh mutual Principality Building Society completed £2bn of gross mortgage lending last year.

 

The society’s gross mortgage lending fell £31.5m in 2018 to £2bn, against 2017.

The sixth largest building society said investment into both intermediary and direct channels was continuing in 2019.

“We are investing in our mortgage technology platform and we will communicate more about this exciting news to Mortgage Solutions later this year,” said a spokesperson.

“This demonstrates our continued commitment to technological development across all our mortgage journeys following our roll out of ‘Principality Connected’, our web-based face-to-face advice service, to all our branches in 2018.”

 

The broker channel

The mutual appointed two field business development managers (BDMs) in the south of England and the East Midlands last year and a new build BDM to support key accounts in England and Wales.

The society also extended distribution through a number of mortgage club relationships last year and reduced speed to mortgage offer from 17 days in 2017 to 11.5 days last year through a series of underwriting changes.

The mutual’s underlying profits for the year dipped to £43.8m and despite a low savings rate environment in 2018 Principality still delivered an average rate to savers of 1.08%, against an annual market average of 0.70%.

Steve Hughes, chief executive at Principality Building Society, said: “We have made great progress in delivering on our business growth strategy, despite increasing economic and political uncertainty, as well as a very competitive mortgage and savings environment which has caused downward pressure on margins.”

He added: “We have grown our lending by more than £700m and are reaping the benefits of our focused mortgage strategy which has built strong relationships with brokers across the UK and seen investment in our direct to consumer mortgage offering.”

Principality’s commercial loans team brought in new lending of £124m, and added that Nemo, its second charge loans business also made a ‘meaningful contribution.’

 

Innovation

Principality is also investing on the technology front and has been working with customers to ‘tailor digital services to its needs.’

“Internally we have improved our mortgage service so customers receive quicker mortgage offers. Our video conference service Principality Connected has also been rolled out in the past year and as a result we have seen a significant rise in the number of mortgage applications in branch,” Hughes continued.

“Once our technology is firmly in place we will be able to offer everyone a service that suits their lifestyles, complementing the personal face-to-face branch service we offer members, by giving them a choice of how they want to access their accounts, by phone, online or via mobile devices.”

Hughes added the lender’s commitment to the high street remains strong having seen footfall and demand rise in some areas, making branches the ‘bedrock’ of its service offering.

Looking ahead to 2019, Hughes expects price competition in the mortgage market to remain fierce and for margins to be squeezed further.

“Our profitability will continue to be robust but will be progressively lower in the next few years as we reshape and invest in our business for the long-term. We will continue our single minded focus on transforming our core mortgage and savings business.”

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