It said the outset of the year was “extremely gloomy”, with its “future growth and profitability at risk”. However, the mutual’s response to housing demand led to a rise in lending and retail funding growth.
Monmouth increased its gross mortgage lending to £374m for the full year to April 2021, up from £252m the year before.
The lender attributed its mortgage performance to its commitment towards borrowers with a lower deposit, such as its return to 90 per cent loan to value (LTV) lending in June last year.
Net lending also rose, from £92.2m to £109.5m and its mortgage assets increased to £1,136.2m, compared to £1,026.7m last year.
The mutual said its mortgage portfolio remained strong but warned the impact of the pandemic had not been fully realised due to the continued use of furlough and payment holidays.
The number of borrowers either in arrears or on mortgage payment deferrals fell annually.
As of 30 April, there were 109 mortgage loans one month or more in arrears, down from 139 last year. Additionally, 43 mortgage loans were still being deferred out of the 1,483 which were granted in total. This was a decline from the 863 on a payment holiday last year.
Monmouth said its prudent policy and manual underwriting helped it avoid “inappropriate credit risks”. The mutual’s provisions for the year were assessed as £1.5m, up from £1m in 2020 with a charge of £700,000, which was flat on the year before. It said the increase in provisions was due to the pandemic.
Net interest margin grew from 1.10 per cent to 1.3 per cent.
William Carroll, chief executive at Monmouth BS, said: “I am extremely proud of what the society has achieved in the year and the support of all colleagues and our members in getting us to where we are today.”