Annual Financial Report

Nottingham Building Society

Results for the year ended 31st December 2024

Nottingham Building Society delivers a strong financial performance in 2024, driven by a 37 per cent growth in new mortgage lending, driving strong profitability

Key Performance Indicators ('KPIs')

The KPIs disclosed below are based on the position at 31st December or for the 12-month period ended 31st December, unless otherwise stated. The average Liquidity Coverage Ratio ('LCR') represents a 12-month average for the year ended 31st December 2024.

· £1,215m gross new lending (2023: £887m), representing an increase of £328m (37%);

· £4.2bn total mortgage assets (2023: £3.6bn), representing growth of £0.6bn;

· 9,166 new mortgage customers (2023: 6,957), an increase of 32%;

· £4.4bn total savings balance (2023: £3.6bn), an uplift of £0.8bn;

· £154.6m total interest paid to savers (2023: £91.8m), an increase of £62.8m;

· £13.9m profit before tax (2023: £8.3m), representing an increase of £5.6m;

· 4.9 Trustpilot score (2023: 4.9);

· 61.5% net promoter score (2023: 64.6%);

· 3,522 colleague volunteering hours (2023: 2,462);

· £22.8m underlying profit before tax (2023: £24.2m), representing a decrease of £1.4m;

· 1.72% net interest margin (2023: 1.94%), being an absolute decrease of 0.22%;

· 72.7% cost : income ratio (2023: 71.7%), an increase of 1.0%;

· 73.0% underlying cost : income ratio (2023: 70.5%), an increase of 2.5%;

· Expected Credit Loss ('ECL') coverage ratio of 12bps (2023: 15bps), a decrease of 3bps;

· Nottingham Building Society ("the Society") continues to manage its Capital and Liquidity positions in excess of regulatory requirements, demonstrated by:

o  13.7% Common Equity Tier 1 ('CET1') Ratio (2023: 15.2%);

o  4.9% Leverage Ratio (2023: 5.2%); and

o  172% average LCR (2023: 184%).

Sue Hayes, Chief Executive Officer ('CEO') commented:

"2024 was a highly successful year for Nottingham Building Society - and the Society is now its largest in asset terms than at any time in its 175-year history - we have reached a record level of £4.2bn in mortgage assets and £5.2bn in total assets.

Our strong set of results for 2024 are driven by a 37% increase in gross new mortgage lending, an uplift in new business margins and continued strong customer service feedback.

We helped 32% more customers own their own home by taking out a mortgage with us for the first time or moving to a new mortgage.

Most importantly our strategy of supporting those who find it more difficult to get a mortgage in the first place has started to be evidenced and we are establishing our Society as a specialist residential lender. In 2024, we launched a new proposition aimed at foreign nationals living in the UK, supporting those entering the country to support our valued service sector to own their own home.

Our mortgage balances increased by 18.6% compared with the previous year, whilst overall lending in the UK mortgage market has fallen. Our total mortgage assets have grown by 40 per cent since we began our transformation journey in 2022.

We were delighted to welcome more savings customers to the Society via our online savings app as well continuing our commitment to passbooks for our branch customers - leading to an increase of 22% in our savings balances. As interest rates remained high throughout the year, we focused on paying savers the best rates we can whilst investing to strengthen the Society. In total, we paid £154.6m in interest to savers in 2024.

We maintained our Trustpilot score of 4.9 reflecting our exceptional service that we know is highly valued by our customers.

We are proud that we have seen an increase in statutory profit enabling us to invest for our members and make good progress in delivering our strategy. We invested in our technology, our brand and in developing our propositions to ensure our Society is well placed for the future.

We took the decision to provide voluntary financial support to those members impacted by Philips Trust Corporation.

Looking ahead, we believe it is important to enable a market where saving is encouraged and incentivised and alongside other Societies, we advocate for the current cash ISA regulations to be maintained. 

I am proud of the results we are sharing today and would like to thank our members for their continued trust and support to the Society. In 2025, the sector celebrates 250 years of building societies and we are more committed than ever to the mutual values that we know are fundamentally important and highly valued by our members."

Sue Hayes

Chief Executive Officer

5th March 2025

Consolidated income statement

for the year ended 31 December 2024

2024

2023

£m

£m

Interest receivable and similar income

278.0

205.5

Interest payable and similar charges

(194.4)

(125.2)

Net interest income

83.6

80.3

Fees and commissions receivable

2.0

2.5

Fees and commissions payable

(1.1)

0.4

Net gains / (losses) from derivative financial instruments

3.9

(14.2)

Total net income

88.4

69.0

Administrative expenses

(59.4)

(52.3)

Depreciation and amortisation

(4.9)

(6.7)

Operating profit before impairment and losses on disposal of treasury assets

24.1

10.0

Impairment credit - loans and advances to customers

-

0.1

Voluntary payment expense associated with Philips Trust Corporation

(11.2)

-

Recoveries against Philips Trust Corporation expense

1.0

-

Loss on disposal of treasury assets

-

(1.8)

Profit before tax

13.9

8.3

Tax charge

(4.6)

-

Profit after tax for the financial year

9.3

8.3

Reconciliation to underlying profit before tax

2024

2023

£m

£m

Profit before tax

13.9

8.3

(Gains) / losses from derivative financial instruments

(3.9)

14.2

Net strategic investment costs

2.6

0.2

Voluntary payment expense associated with Philips Trust Corporation

11.2

-

Recoveries against Philips Trust Corporation expense

(1.0)

-

Other

-

(0.3)

Loss on disposal of treasury assets

-

1.8

Underlying profit before tax

22.8

24.2

Consolidated statement of comprehensive income

for the year ended 31 December 2024

2024

2023

£m

£m

Profit for the financial year

9.3

8.3

Items that will not be re-classified to the income statement

Re-measurements of defined benefit obligations

0.9

0.1

Tax on items that will not be re-classified

(0.2)

(0.1)

Items that may subsequently be re-classified to the income statement

Valuation (losses) / gains taken to reserves

(0.5)

2.8

Amounts transferred to the Income Statement on micro hedge relationships

0.3

-

Loss on disposal of treasury assets taken to income statement

-

1.8

Tax on items that may subsequently be re-classified

-

(1.0)

Other comprehensive income for the year net of income tax

0.5

3.6

Total comprehensive income for the year

9.8

11.9

Consolidated statement of financial position

as at 31 December 2024

2024

2023

£m

£m

Assets

Liquid assets

917.0

801.3

Derivative financial instruments

80.9

105.2

Loans and advances to customers

4,201.8

3,543.9

Fixed and other assets

27.0

24.5

Total assets

5,226.7

4,474.9

Liabilities

Shares

4,350.5

3,565.9

Wholesale funding

557.2

583.1

Derivative financial instruments

22.9

43.9

Other liabilities

18.8

14.5

Subscribed capital

24.0

24.0

Total liabilities

4,973.4

4,231.4

Reserves

General reserves

253.3

243.3

Fair value reserves

-

0.2

Total reserves attributable to members of the Society

253.3

243.5

Total reserves and liabilities

5,226.7

4,474.9

Consolidated statement of changes in members' interests as at 31 December 2024

General reserve

FVOCI reserve

Total

£m

£m

£m

Balance as at 1 January 2024

243.3

0.2

243.5

Profit for the year

9.3

-

9.3

Other comprehensive income for the period (net of tax)

Net gains / (losses) from changes in fair value

0.7

(0.2)

0.5

Total other comprehensive income / (expense)

0.7

(0.2)

0.5

Total comprehensive income / (expense) for the period

10.0

(0.2)

9.8

Balance as at 31 December 2024

253.3

-

253.3

Balance as at 1 January 2023

235.0

(3.4)

231.6

Profit for the year

8.3

-

8.3

Other comprehensive income for the period (net of tax)

Net gains from changes in fair value

-

3.6

3.6

Total other comprehensive income

-

3.6

3.6

Total comprehensive income for the period

8.3

3.6

11.9

Balance as at 31 December 2023

243.3

0.2

243.5

Summary consolidated cash flow statement

for the year ended 31 December 2024

2024

2023

£m

£m

Cash flows from operating activities

21.0

18.9

Changes in operating assets and liabilities

114.7

55.7

Net cash generated from operating activities

135.7

74.6

Cash (outflows) / inflows from investing activities

(122.9)

74.7

Cash outflows from financing activities

(2.4)

(2.6)

Increase in cash and cash equivalents

10.4

146.7

Cash and cash equivalents at beginning of year

439.1

292.4

Cash and cash equivalents at end of year

449.5

439.1