Half-year Report

Nottingham Building Society ('NBS')

Results for the six-month period ended 30th June 2025

NBS achieves strong financial results and further transformation in a year of consolidation

The key performance indicators disclosed below are based on the position at 30th June or for the 6-month period ended 30th June, unless otherwise stated. The average Liquidity Coverage Ratio ('LCR') represents a 12-month average for the period ended 30th June 2025.

· £535.1m gross new lending (2024: £525.7m), representing an increase of 1.8%;

· £4.4bn total mortgage assets (2024: £3.9bn), being growth of £0.5bn (or 12.9%);

· 4,076 new mortgage customers (2024: 4,069), a marginal increase of 0.2%;

· £4.4bn total savings balance (2024: £4.0bn), an uplift of £0.4bn;

· £82.1m total interest paid to savers (2024: £71.5m), an increase of £10.6m;

· £11.0m underlying profit before tax (2024: £9.0m), an increase of 22.2% and reflecting growth in prior two years;

· £8.0m profit before tax (2024: profit before tax £0.7m), representing an increase of £7.3m, with 2024 impacted by the Philips Trust Corporation payment scheme;

· Reduction in underlying net interest margin to 1.61% (2024: 1.87%), reflecting sustained upward pressure on funding costs in a competitive market and our commitment to pay savers the best rates we can;

· 75.2% underlying cost: income ratio (2024: 76.6%), a decrease of 1.4%;

· Expected coverage loss ratio of 11bps (2024: 15bps), a decrease of 4bps and reflecting strong asset quality;

· NBS continues to benefit from a robust Capital / Liquidity base, demonstrated by:

o  13.5% CET1 ratio (2024: 14.0%);

o  4.8% Leverage ratio (2024: 5.3%);

o  191.8% average LCR (2024: 169.3%);

· Strong service levels maintained with an increase in net promoter score to 63.6% (2024: 61.3%) and a 4.9 Trustpilot score (2024: 4.9); and

· Maintaining a commitment to the communities we serve, with 1,501 colleague hours volunteered (2024: 1,200)

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

"We're pleased to report a positive performance for the first half of 2025 as we consolidate the momentum built during a landmark 2024. Last year, we passed the £5bn asset milestone, delivered significant growth and recorded our highest-ever savings levels. Entering this year, our focus has been on building long-term resilience - ensuring the right foundations are in place for a sustainable future.

Our strategy in 2025 is a deliberate one: to moderate lending growth while we implement new technology, strengthen our core banking systems and evolve our mortgage proposition to better serve customers who don't fit the traditional mould. This transformation will enable us to grow with greater speed and agility in 2026 and beyond.

We've made great strides already. We've launched a new mortgage platform in July, diversified our funding through a successful public Residential Mortgage-Backed Security ('RMBS') issuance and continued to innovate for the benefit of our broker partners and members. Our digital and branch savers have benefitted from strong rates, particularly through our ISA products, whilst we've continued to support members through every channel.

We've also brought our new brand to life - publicly launched in October 2024 - with a positive increase in awareness and engagement. In May, we opened our first rebranded flagship branch in Nottingham City Centre, shaped by member and colleague feedback, with the response being overwhelmingly positive.

As a mutual, community impact remains a priority. Through our partnerships with Emmanuel House, Shelter and ThinkForward, we're helping tackle homelessness and improve access to opportunities for young people. We've also continued to advocate for the interests of our members, including on issues such as ISA reforms.

While macroeconomic uncertainty and regulatory changes have added some external headwinds to the mortgage market, we remain focused on our transformation priorities. I'd like to thank our members for their continued loyalty and our colleagues for the passion and commitment they bring every day. Together, we're building a stronger society for the future."

Sue Hayes

Chief Executive Officer

28th July 2025

Consolidated income statement

for the six months ended 30 June 2025

Period to 30 June 2025

(Unaudited)

Period to 30 June 2024

(Unaudited)

Year Ended 31 Dec 2024

(Audited)

£m

£m

£m

Interest receivable and similar income

146.4

133.7

278.0

Interest payable and similar charges

(103.6)

(93.0)

(194.4)

Net interest income

42.8

40.7

83.6

Fees and commissions receivable

0.9

1.0

2.0

Fees and commissions payable

(0.9)

(0.7)

(1.1)

Net (losses)/gains from derivative financial instruments

(3.3)

3.3

3.9

Total net income

39.5

44.3

88.4

Administrative expenses

(30.3)

(29.5)

(59.4)

Depreciation and amortisation

(2.6)

(2.8)

(4.9)

Operating profit before impairment, provisions and disposals

6.6

12.0

24.1

Impairment credit / (charge) - loans and advances to customers

0.4

(0.6)

-

Voluntary payment expense associated with Philips Trust Corporation

Recoveries against Philips Trust Corporation

-

0.1

(10.7)

-

(11.2)

1.0

Profit on disposal of premises

0.9

-

-

Profit before tax

8.0

0.7

13.9

Tax charge

(2.8)

(0.1)

(4.6)

Profit after tax

5.2

0.6

9.3

Reconciliation to underlying profit before tax

Period to 30 June 2025

(Unaudited)

Period to 30 June 2024

(Unaudited)

Year Ended 31 Dec 2024

(Audited)

£m

£m

£m

Profit before tax

8.0

0.7

13.9

Losses/(gains) from derivative financial instruments

3.3

(3.3)

(3.9)

Net strategic investment costs

0.7

0.9

2.6

Voluntary payment expense associated with Philips Trust Corporation

Recoveries against Philips Trust Corporation expense

-

(0.1)

10.7

-

11.2

(1.0)

Profit on disposal of premises

(0.9)

-

-

Underlying profit before tax

11.0

9.0

22.8

Consolidated statement of financial position

as at 30 June 2025

30 June 2025

(Unaudited)

30 June 2024

(Unaudited)

31 Dec 2024

(Audited)

£m

£m

£m

Assets

Liquid assets

952.8

847.5

917.0

Derivative financial instruments

47.6

106.1

80.9

Loans and advances to customers

4,365.8

3,797.9

4,201.8

Fixed and other assets

30.9

30.8

27.0

Total assets

5,397.1

4,782.3

5,226.7

Liabilities

Shares

4,452.0

3,984.9

4,350.5

Wholesale funding

610.0

477.6

557.2

Derivative financial instruments

37.7

28.1

22.9

Other liabilities

14.7

23.3

18.8

Subscribed capital

24.0

24.0

24.0

Total liabilities

5,138.4

4,537.9

4,973.4

Reserves

General reserves

258.5

243.8

253.3

Fair value reserves

0.2

0.6

-

Total reserves attributable to members of the Society

258.7

244.4

253.3

Total reserves and liabilities

5,397.1

4,782.3

5,226.7

Consolidated statement of changes in members' interests for the period ended 30 June 2025

General reserve

FVOCI reserve

Total

£m

£m

£m

Balance as at 31 December 2024 (Audited)

253.3

-

253.3

Profit for the period

5.2

-

5.2

Other comprehensive income for the period (net of tax)

Net gains from changes in fair value

-

0.2

0.2

Remeasurement of defined benefit obligation

-

-

-

Balance as at 30 June 2025 (Unaudited)

258.5

0.2

258.7

Balance as at 31 December 2023 (Audited)

243.3

0.2

243.5

Profit for the period

0.6

-

0.6

Other comprehensive income for the period (net of tax)

Net gains from changes in fair value

-

0.4

0.4

Remeasurement of defined benefit obligation

(0.1)

-

(0.1)

Balance as at 30 June 2024 (Unaudited)

243.8

0.6

244.4

Balance as at 31 December 2023 (Audited)

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

Remeasurement of defined benefit obligation

-

-

-

Balance as at 31 December 2024 (Audited)

253.3

-

253.3

Summary consolidated cash flow statement

for the period ended 30 June 2025

Period to

30 June 2025

(Unaudited)

Period to

30 June 2024

(Unaudited)

Year Ended

31 Dec 2024

(Audited)

£m

£m

£m

Cash flows from operating activities

10.3

15.6

21.0

Changes in operating assets and liabilities

4.0

42.4

114.7

Net cash generated from operating activities

14.3

58.0

135.7

Cash flows used in investing activities

(121.2)

(39.6)

(122.9)

Cash flows used in financing activities

(1.2)

(1.2)

(2.4)

(Decrease) / increase in cash and cash equivalents

(108.1)

17.2

10.4

Cash and cash equivalents at beginning of year

449.5

439.1

439.1

Cash and cash equivalents at end of year

341.4

456.3

449.5