Court case drives West Brom to a loss
The loss of a high-profile court case has punched a hole in the annual figures from the West Brom, driving the building society to a £19.8 million loss.
It comes despite strong home loan figures from the Black Country's biggest building society, which saw gross residential mortgage lending rise to £712m for the 12 months to the end of March.
Up from £673m a year ago, that's the biggest lending figure for the society since the financial crash of 2008.
But the West Brom had to fork out £27.5m last year after the Court of Appeal said it should not have doubled the interest it charged around 6,700 buy-to-let landlords.
Stripping out the impact of the court case, the West Brom said its underlying pre-tax profit was up 60 per cent on last year, to £7.7m.
Chief executive Jonathan Westhoff said: "Whilst the reported loss for the year is disappointing, we can draw considerable confidence from our strong underlying performance and year on year growth in residential mortgage lending.
"The main reason behind the loss has been clearly stated in the half yearly results, reflecting the one-off costs of reimbursing certain buy-to-let borrowers who had previously been charged additional interest on their loans.
"Our purpose as a building society is to support the financial wellbeing of our members and we achieve this through providing funds to enable home ownership and a good return on the savings we are entrusted with. The society’s performance during the year shows we are delivering on both counts."
Mr Westhoff added: "Nearly a quarter of our new lending during the year was to first time buyers, which is essential for a healthy housing market.
"We continue to offer a secure home for savers’ deposits and whilst the market is undoubtedly tough because of a prolonged period of low interest rates, our accounts remain competitively placed.
"It has been a year of significant economic and political change and there is no denying that a number of challenges still lie ahead. Household budgets are being squeezed by rising inflation and a sense of uncertainty prevails around the forthcoming election and negotiations to leave the EU."
Despite historic low interest rates, the West Brom maintained its savings balances at £4.4 billion, and has total assets of £5.8bn – making it the seventh biggest buildiong society in the UK.
With its new headquarters at Providence Place in West Bromwich, the society employs 700 people there and at its 37 branches across the Black Country, Birmingham, Shropshire and mid-Wales. It has around 446,000 members.
