Annual Financial Report

West Bromwich Building Society

Preliminary results announcement for the year ended 31 March 2025

Forward-looking statements

This document contains certain forward-looking statements with respect to certain of the West Brom's strategy, plans, current goals and expectations relating to the future financial position, business performance and results. Although the West Brom believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to be an accurate reflection of future performance. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and

circumstances that are beyond the control of the West Brom including, amongst other things, UK domestic and global economic business conditions; market-related risks such as fluctuation in interest rates and exchange rates; inflation/deflation; the impact of competition; changes in customer preferences; risks concerning borrower credit quality; delays in implementing proposals; the timing, impact and other uncertainties of future acquisitions or other combinations within relevant industries; the policies and actions of regulatory authorities; the impact of tax or other legislation and other regulations in the jurisdictions in which the West Brom operates. As a result, the West Brom's actual future financial condition, business performance and results may differ materially from the plans, goals and expectations expressed or implied in these forward-looking statements. Due to such risks and uncertainties the West Brom cautions readers not to place undue reliance on such forward-looking statements. We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

West Bromwich Building Society Preliminary results announcement

for the year ended 31 March 2025

The West Brom today announces its results for the financial year ended 31 March 2025. Key highlights of the financial year include:

Record new mortgage lending - £1.3bn (2023/24: £1.1bn)

· Achieved record level of lending for homeownership, including increased mortgage lending for homeownership by 19%, helping 6,267 first-time buyers buy their own home, 34% more than last year.

Borrowers saved around £1,300 a year

· Market-first approach to Standard Variable Rate (SVR) means existing mortgage customers who have a higher amount of equity in their homes can have a reduced rate at the end of their mortgage deal.

· On average an SVR customer at the West Brom would save around £1,300 a year compared with an average market SVR1.

Benefits to savings customers

· Savers earned a total of £41.8m more interest than if they'd received the market average2 savings rate (2023/24: £38.6m). Welcomed over 13,500 new savers (2023/24: over 10,000), an increase of more than one third.

Savings balances

· Savers' balances grew to £5.1bn (2023/24: £4.7bn), a 9% uplift on last year.

Community

· Contributed nearly £50,000 to support local charities and communities, with over 1,800 hours volunteered on community projects.

Accreditations: Living Wage Foundation

· Became the first building society in the UK, and first employer in the West Midlands, to be awarded all three accreditations from the Living Wage Foundation - including: Living Pension, Living Hours, and Real Living Wage.

Profit before tax

· Profit before tax grew by 14% to £36.5m, helping maintain a strong Common Equity Tier 1 (CET 1) ratio of 17.1%.

Outstanding customer experience

· Net Promoter Score (NPS) increased to +76 (2023/24: +75) and the Society was awarded the Feefo Gold Trusted Service Award 2025.

Award winning

· Awarded the First-Time Mortgage Buyers' Choice award for the second year in a row, and highly commended as ISA Provider of the Year at Moneyfactscompare.co.uk awards 2025.

Jonathan Westhoff, Chief Executive Officer, at West Brom Building Society said: "This year's results reflect the real difference we're making for our members, particularly savers and first-time buyers. I'm pleased we've continued to strengthen our support for customers across the board.

"We've helped over 6,000 first-time buyers, over a third (34%) more than this time last year and we've seen an increase in the popularity of specialist lending options, such as low deposit new build mortgages and shared ownership. Our market-first approach to Standard Variable Rate (SVR) means existing customers who have a higher amount of equity in their homes can have a reduced rate at the end of their mortgage deal, meaning they would save on average £1,300 a year compared with an average market SVR1.

"We've also continued to support savers, helping them earn £41.8m more in interest than if they'd received the market average2 rate, with balances increasing 9% year-on-year to £5.1bn. And we're pleased to have welcomed over 13,500 new savers to the Society, an increase of more than a third from the previous year.

"Beyond the numbers, we continue to make a positive difference in our communities. This year we've provided nearly £50,000 in funding to local charities, while colleagues volunteered more than 1,800 hours on local projects and delivered financial education sessions to over 2,000 children and young adults in our heartlands. We're proud that our partnership with Birmingham based charity Jericho is helping support employment opportunities for those who may struggle to enter employment. 

"We became the first building society and West Midlands employer to achieve all three accreditations from the Living Wage Foundation, including: Living Pension, Living Hours, and Real Living Wage. This is part of our commitment to fair pay, secure hours and a strong pension for our people.

"It's encouraging that our commitment to our customers has been highlighted through delivering excellent customer service, with recognition like our Feefo Gold Trusted Service Award and winning the Moneyfacts First-Time Mortgage Buyers' Choice Award for a second year running. This tells us we're getting it right.

"Our results allow us to invest further in our infrastructure and services to support customers now and into the future. I'm pleased with what we've achieved this year, and as we look ahead to what will be a challenging market environment this year, we'll remain focused on continuing to deliver our Purpose, while remaining resilient in a changing financial landscape."

1 Based on the average loan balance for a Society SVR borrower at 31 March 2025. Average market reversion rate of 7.68% sourced from Moneyfacts March 2025. Average Society rate based on SVR borrowers as at 31 March 2025.

2 Average market rates sourced from Bank of England Bankstats table A6.1 March 2025.

CEO's review

Navigating the changing economic landscape

Most of the year has continued to benefit from a more moderate economic backdrop than in previous years, with inflation easing and interest rates falling. However, the fragility of the economy was highlighted by the impact of wider global issues that we've recently witnessed.

Throughout the West Brom's 176-year history, we've remained aware of our role in supporting customers in navigating such changing conditions. That's why we're proud to have continued to offer so many a route into buying their first home, whilst delivering great value to those who've entrusted their savings with us and funded those homeownership aspirations.

We've seen the government commit to a strong housing agenda, with the headline being a national target to build 1.5 million homes over the next five years, and an additional investment of £2bn into social and affordable housing. Whilst the detail of how this will be delivered has yet to emerge fully, it's a welcome intent and will, if delivered, help alleviate some of the supply side of the housing challenge. Yet for many, affordability remains a barrier to buying a home, and it's here that our Purpose has most impact through supporting potential homeowners to overcome this hurdle.

Honouring a 250-year legacy

This year also marks 250 years since the first building society was founded at the Golden Cross Inn in Birmingham, during the early years of the industrial revolution. It serves as a reminder not only of the strength of our heritage, but of the enduring value of mutuality. At West Brom Building Society we're continuing that legacy, our focus remains firmly on supporting customers, and we've seen that commitment reflected in our results.

Delivering a strong performance

We achieved record lending of £1.3bn for homeownership this year, resulting in a 38% increase in net lending for homeownership to £757m, which was supported by a £401m increase in customers' savings balances. This has helped deliver a profit before tax of £36.5m, an increase of 14% from the previous year, providing the ongoing capital strength that supports the delivery of our Purpose and the underpinning investment that keeps us as relevant today as we have been through 176 years of change.

We helped 6,267 first-time buyers purchase their own home, that's 34% more than last year. Through our shared ownership proposition, we attracted 2,654 customers, who whilst not ready to buy their home outright, have bought a share of their home. This approach to buying a first home has become a welcome option for many, as shown by our lending via this route increasing by 29% year on year. We continue to provide a wider range of options for first-time buyers, such as the recently introduced low-deposit new build mortgage.

Putting customers first

Our determination to offer this focus on homeownership and provide an excellent service to customers and our mortgage broker relationships hasn't gone unnoticed. We were delighted to receive a Moneyfacts award recognising our support for first-time buyers for a second year running. We also received a Gold Trusted Service Award from Feefo which, along with a customer rating of 4.7 out of 5, shows we set high standards for ourselves. We were also recognised by the Good Business Charter for dedication to customer commitment.

We continued to deliver great value for savers. With our savings rates on average, 0.86% above the market average2, customers received £41.8m more in interest than they would have on average rates elsewhere. That's a real and meaningful difference at a time when every pound matters. This year over 13,500 new savers joined our Society, a 34% increase on last year.

Strengthening communities

We remain committed to our branches across the region and the crucial role they play in supporting our customers and their local communities. 

We continued working in our communities to have a positive impact contributing nearly £50,000 through fundraising, grants and donations across 80 local charities and communities. With over 1,800 hours volunteered on various community projects, we also delivered financial education sessions to over 2,000 children and young adults. Our partnership with Birmingham based charity Jericho is helping support employment opportunities, and we look forward to continuing to work with them throughout this year.

To support our colleagues, we gained the Living Wage Foundation's triple accreditation, with the Living Pension accreditation being the third standard we added to our offering as an employer. This means colleagues benefit from the Real Living Wage, Living Pension and Living Hours standards, which made us the first building society in the country, and the first employer in the West Midlands, to gain all three standards.

Moving forward

Looking ahead we'll face continued challenges, from competitive pressures in the mortgage market, to uncertainty around potentially damaging ISA reforms, and the wider economic environment which may be impacted by the recent world trade situation. In addition, we also face cost challenges, not least the significant cost of the recent changes to employer's national insurance rates. While these may affect some aspects of our performance going forward, we remain determined to deliver on the needs of our customers.

Our strategy will remain focused on delivering on our Purpose, which is to support the financial wellbeing of our customers by providing a safe and good return on the savings they entrust with us, and promote homeownership.

I want to thank all our colleagues, in every part of the business, as well as our Member and Employee Councils, for their hard work and dedication and, especially our members for their continued support.

Jonathan Westhoff

Chief Executive Officer

28 May 2025

2 Average market rates sourced from Bank of England Bankstats table A6.1 March 2025.