Annual Financial Report

PRESS RELEASE

RESULTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011

Main Elements of Performance

·; Profit on ordinary activities before tax up from £0.4 million in 2010 to £0.6 million in 2011

·; Total group profit after tax was £6.35 million

·; Society expense ratio maintained at its lowest historic level of 0.51%

·; Reduction in group total assets of 1.7% to £878 million

Michael Prior, Chairman of the Society, commented:

"The 2011 results benefitted from a net £5.2 million surplus generated from the sale of our wholly owned banking subsidiary, Whiteaway Laidlaw Bank in January 2011. This enabled the Society to report a record surplus after tax for the year and to improve its capital position, whilst maintaining its focus on prime mortgage lending funded by our retail deposit base.

In terms of core business there was an increase in net interest income of £3.24 million and a reduction in expenses of £0.08 million, resulting in the lowest ever reported level of management expense ratio. The profit on continuing operations includes an increased level of charge for loss provisions; this was felt to be a prudent response to the depressed economic environment where the UK has seen a lower number of housing transactions, subdued house prices and higher levels of mortgage arrears.

Given the ongoing difficult financial environment, our current business model is cautious in assuming an unchanged bank base rate over the medium term. Careful management of the balance sheet enables the Society to focus on its core priority, being the enhancement of regulatory capital over the medium term through increasing levels of general reserves."

-ends-

contact for further information:

Chris Gee

Finance Director, Manchester Building Society 0161 923 8000

Footnote to Editors:

·; Manchester Building Society is the UK's 16th largest building society.

·; Based in Manchester City Centre, the Society has over 30,000 investing members and 5,400 borrowing members.

·; Manchester Building Society provides a range of individually underwritten residential mortgages, comprising discounted variable rates, fixed rates, and an Offset discounted rate. It also offers a range of BTL discounted variable rate and fixed rate mortgage products

·; Manchester Building Society regularly features in the "best buy" tables for its mortgage and retail savings products.

Results from continuing operations

* excludes net profit arising from disposal of banking subsidiary