Its net core residential lending during the period amounted to £408m, which was higher than the £181m it completed last year.
The share of mortgages in arrears of three months of more remained stable at 0.37 per cent of its portfolio. This was compared to 0.38 per cent in H1 last year and 0.35 per cent in the six months up to 31 December.
The mutual said there were no properties in possession by 30 June 2023, which was the same for the first and second halves of 2022.
The mutual’s impairment charges rose from a writeback of £500,000 in H1 last year to £1.1m in H1 2023.
It said falling housing prices and the cost of living resulted in the mutual increasing its provisions on residential and buy-to-let mortgages by £1.5m, as well as the growth in its mortgage book.
Interest income rise
Newcastle Building Society said it also tried to provide good value for borrowers by setting its standard variable rate at 5.19 per cent as of the end of June against a market average of 7.63 per cent. The mutual said in June alone, this saved its borrowers nearly £336,000 in interest payments.
The mutual’s net interest income was £40.1m, which was up from £35.4m last year, but down on £75.4m as of 31 December 2022.
Its net interest margin remained unchanged from the same period last year at 1.45 per cent, and was down slightly from 1.48 per cent at the end of 2022.
Newcastle Building Society said its net interest income growth was driven by the increase of its lending book instead.
The mutual said it mitigated the impact of changing rates by hedging its exposure to risks and using swaps to ensure existing lending remains profitable even when rates go up.
As interest rate swaps are held at fair value, the value changes when market rates move. Newcastle Building Society said the net derivative value of interest rate swaps rose by £48.4m in the six months to June.
Group performance
The mutual reported a profit before tax of £16.2m, up from £14.2m last year.
Newcastle Building Society’s financial advice subsidiary, Newcastle Financial Advisers, delivered more than 3,400 advice appointments and invested £54m on behalf of its clients.
Andrew Haigh (pictured), chief executive of Newcastle Building Society, said: “In a challenging period, the Society has performed well and continued to deliver for members and our communities. Our growing business remains resilient and we have demonstrated the positive difference we can make for all our stakeholders.
“Despite the uncertain economic outlook, we are well positioned to meet our further growth ambitions and look forward to continued progress in the second half of the year.”
