The mutual increased its provisions for expected losses on loans due to the continued cost of living crisis and its impact on mortgage affordability.
It made an impairment charge of £2.2m last year, compared to a release of £1.4m in 2021 to protect itself from any losses.
Despite the uncertain economic landscape, the mutual said its asset quality “remains strong” as it ended the year with low levels of arrears, making up 0.2 per cent of loans. The average loan to value (LTV) tier of its book stood at 54 per cent.
The mutual’s net interest margin increased by 45 basis points to 1.69 per cent, and its net interest income rose from £45.9m in 2021 to £62.8m last year.
Nottingham Building Society reported that the group’s profit before tax rose from £14.9m to £18.9m annually.
A strong finish
Sue Hayes (pictured), CEO of Nottingham Building Society, said the mutual ended the year in a “strong position”.
She also said its partnership with alternative lender Generation Home proved its intention to reach its goals through different means.
Hayes added: “Our financial performance has been achieved despite additional costs and increased provisions for expected future credit losses driven by the rising cost of living, and inflationary challenges that our borrowers face into 2023 and beyond. Increasing interest rates have supported the strong performance.
“I am proud of the results we are sharing today and would like to thank our members, and each one of our dedicated colleagues, for their continued trust in the society. We look ahead to the coming years with a renewed sense of focus, guided by a clear and impactful purpose, with mutuality as our bedrock.”
