Chelsea reports excellent results for 2006
2 February 2007
Strong growth and lending well ahead of market share
Highlights
- Gross mortgage lending £3.0bn - up 34% on previous year and 32% better than sector market share1
- Net mortgage lending £1.3bn - up 98% on previous year and 70% better than sector market share1
- Asset quality remains high with mortgage arrears over 25% better than the industry average2
- Net interest margin maintained at around 1%
- Costs to mean assets ratio down to 0.59% - one of the best efficiency ratios in the building societies' sector
- Pre-tax profit up 18% to £58.8m
- Group assets up 15% to £11.1bn
- Retail savings balances up 9% to £7.8bn
Richard Hornbrook, Director and Chief Executive commented on the results: -
"2006 has been a great year for Chelsea and I am proud to be delivering another set of excellent results. Despite fierce competition, we have grown our business significantly and have supported our growth with a matching improvement in profitability.
We have developed a strategy for success and it's paying off. This has been demonstrated by another year of excellent profit, significant asset growth and reduction in costs. We've delivered real value for our members in the shape of good products, outstanding service and people who care. Customer service, more than ever before, will become the market differentiator and during 2007 we will continue to build on what is already a strong performance. We are looking to the future with confidence".
Notes
- Natural market share of mortgage lending is based upon the mortgage lending figures for all building societies published by the Building Societies Association and is calculated using the ratio of Chelsea's total mortgage assets to the aggregate total mortgage assets for all building societies.
- Comparative arrears performance is based on the latest data published by the Council of Mortgage Lenders.
- A full 5 years’ performance summary for 2002-2006 follows.
For further information please contact
CHELSEA BUILDING SOCIETY
GROUP FINANCIAL RESULTS 2006
5 YEARS' PERFORMANCE SUMMARY 2002 - 2006
| Year | IFRS 2006 | IFRS 2005 | IFRS 2004 | 2004 | 2003 | 2002 | |
|---|---|---|---|---|---|---|---|
| Income And Expediture | £m | £m | £m | £m | £m | £m | |
| Net Interest Receivable | 107.7 | 94.8 | 91.3 | 91.3 | 98.1 | 86.0 | |
| Other Income & Charges | 14.7 | 11.7 | 8.4 | 8.4 | 7.6 | 8.1 | |
| 122.4 | 106.5 | 99.7 | 99.7 | 105.7 | 94.1 | ||
| Administration Expenses | 61.9 | 55.7 | 54.6 | 53.8 | 47.8 | 43.9 | |
| Provisions | 1.7 | 0.8 | 0.5 | 0.5 | 1.1 | 0.1 | |
| Profit before Tax | 58.8 | 50.0 | 44.6 | 45.4 | 56.8 | 50.1 | |
| Tax | 17.8 | 15.1 | 13.5 | 13.5 | 17.3 | 15.0 | |
| PROFIT FOR THE FINANCIAL YEAR | 41.0 | 34.9 | 31.1 | 31.9 | 39.5 | 35.1 | |
| Balance Sheet | £m | £m | £m | £m | £m | £m | |
| Liquid Assets | 2,408.2 | 2,146.3 | 2,008.8 | 2,008.8 | 1,828.8 | 1,461.4 | |
| Derivatives | 42.5 | 26.2 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Fair value adjustment for hedged risk | 3.6 | 5.9 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Commercial Assets | 8,581.6 | 7,382.2 | 6,744.6 | 6,744.6 | 5,920.7 | 5,123.2 | |
| Fixed & Other Assets | 102.3 | 95.7 | 130.8 | 114.4 | 101.5 | 92.5 | |
| TOTAL ASSETS | 11,138.2 | 9,656.3 | 8,884.2 | 8,867.8 | 7,851.0 | 6,677.1 | |
| Shares | 7,804.7 | 7,190.4 | 6,718.1 | 6,718.1 | 5,960.3 | 5,626.2 | |
| Other Borrowings | 2,642.0 | 1,837.7 | 1,651.6 | 1,636.6 | 1,378.9 | 577.7 | |
| Derivatives | 13.2 | 15.6 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Fair value adjustment for hedged risk | 27.8 | 6.2 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Other Liabilities | 51.1 | 54.2 | 34.8 | 31.1 | 30.9 | 32.0 | |
| Subordinated Debt | 100.2 | 100.0 | 100.0 | 100.0 | 129.9 | 129.8 | |
| Reserves | 499.2 | 452.2 | 379.7 | 382.0 | 351.0 | 311.4 | |
| TOTAL LIABILITIES | 11,138.2 | 9,656.3 | 8,884.2 | 8,867.8 | 7,851.0 | 6,677.1 | |
| Financial Ratios | % | % | % | % | % | % | |
| Net Interest Margin | 1.04 | 1.02 | 1.09 | 1.09 | 1.35 | 1.37 | |
| Pre-tax Profit:Mean Assets | 0.57 | 0.54 | 0.53 | 0.54 | 0.78 | 0.80 | |
| Administration Expenses:Mean Assets | 0.59 | 0.60 | 0.65 | 0.64 | 0.66 | 0.70 | |
| Cost to Income Ratio | 50.59 | 52.34 | 54.76 | 53.96 | 45.22 | 46.65 | |
| Total Assets Growth | 15.35 | 8.69 | 13.17 | 12.95 | 17.58 | 13.28 | |
| Liquid Assets:Shares & Borrowing | 23.05 | 23.77 | 24.00 | 24.04 | 24.92 | 23.56 | |
| Non-retail Funds Ratio | 25.29 | 20.36 | 19.73 | 19.59 | 18.79 | 9.31 | |
| Gross Capital Ratio | 5.74 | 6.12 | 5.73 | 5.77 | 6.55 | 7.11 | |
| Free Capital Ratio | 4.90 | 5.17 | 4.86 | 5.07 | 5.84 | 6.33 | |
| Solvency | 12.10 | 12.94 | 12.10 | 12.70 | 14.30 | 15.24 | |
| Lending | 0.70 | 0.59 | 0.89 | 0.65 | 0.66 | 0.71 | |
| Funding | 25.29 | 20.36 | 19.73 | 19.59 | 18.79 | 9.31 | |
| Net Profit as a % of Mean assets | 0.39 | 0.38 | 0.37 | 0.38 | 0.54 | 0.56 | |
International Financial Reporting Standards were adopted on 1 January 2005 but did not require all comparative figures for 2004 to be restated. Consequently the financial results and ratios for the years up to and including 2004 are not directly comparable with the financial results and ratios for 2004 (IFRS), 2005 and 2006.
