Manchester Building Society Results for the year ended 31 December 2017 (4064H)
12 Marzo 2018 - 11:45AM
UK Regulatory
TIDMMBSR TIDMMBSP
RNS Number : 4064H
Manchester Building Society
12 March 2018
Manchester Building Society Group ("the Society") Results for
the year ended 31 December 2017
2017 2016
GBP000 GBP000
Total operating income 9,580 9,210
Administrative expenses
and depreciation (7,955) (8,663)
Operating profit before
impairment 1,625 547
Impairment losses (2,376) (3,448)
Financial Services Compensation
Scheme levy (29) (67)
Loss for the period
before taxation (780) (2,968)
Tax expense - (382)
Loss for the period (780) (3,350)
--------- ---------
Total assets 304,191 382,304
The increase in total operating income included a release of
GBP0.5m of provisions following the completion of a remediation
project. This was partially offset by an underlying GBP0.2m
reduction in interest income reflecting the continued planned
reduction in the size of the loan book which fell 13% from GBP289m
to GBP251m, largely mitigated by a reduction in funding from
GBP340m to GBP265m.
Administrative expenses reduced by GBP0.7m in the year mainly as
a result of reduced professional fees and cost reductions following
a detailed review of the Society's cost base. There were, however,
additional legal fees associated with the claim against Grant
Thornton LLP, the Society's previous external auditors.
Impairment losses (net) were GBP2.4m. There was a charge of
GBP2.8m, principally relating to the EUR58m Spanish lifetime book
which was adversely affected by property values. Other items
included GBP0.4m credit following an increase in the value of the
Society's head office building.
The Society's reserves reduced in 2017 by GBP0.8m to negative
reserves of GBP10.0m.
The Society continues to have a strong liquidity position.
The 2017 accounts have been prepared on a going concern basis of
accounting and, as with the 2016 accounts, set out a "material
uncertainty" regarding the long-term future of the Society.
Strategic future and capital position
The Society met all regulatory requirements throughout the year
on a total capital basis, but did not meet the qualitative
standards for the level of Common Equity Tier 1 ("CET 1")
regulatory capital.
The Board continues to discuss and consult with the PRA on the
strategic future and capital position of the Society. In ongoing
dialogue with the PRA, we continue to consider further the
potential measures for addressing the shortfall to the CET 1
capital requirements.
Regulatory compliance of second charge loan portfolios
During 2017 the Society completed a project to ensure regulatory
compliance of two acquired second charge loan portfolios.
As at 31 December 2017, the redress provision on these accounts
was GBP0.1m (2016: GBP1.7m).
Legal claim against Grant Thornton UK LLP
The Board continued to take legal advice regarding the Society's
claim for damages against the previous external auditors, Grant
Thornton UK LLP. The trial commenced in January 2018 with judgment
not expected for several months.
Permanent Interest Bearing Share ("PIBS") coupon payments April
2018
As a result of the shortfall against qualitative standards for
the level of CET 1 regulatory capital, the requirements under CRD
IV article 141 regarding capital conservation, mean the Society may
be prohibited from making the PIBS coupon payments due in April
2018. A further announcement will be made in due course regarding
the April PIBS coupon payments.
2017 Annual Report & Accounts
The accounts for the 12 months ending 31 December 2017 are
available to view on the Society's website:
http://manchesterbuildingsociety.co.uk/Main/FinancialInformation
Enquiries
Andy Donald - Maitland 020 7379 5151 adonald@maitland.co.uk
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