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Hinckley & Rugby maintains financial performance in 2020 despite market uncertainty

Hinckley & Rugby Building Society has maintained its financial performance through 2020 with profit levels holding flat, despite additional costs incurred during the year.

The Covid-19 pandemic meant the Society’s mortgage book decreased to £658.0 million, down from £696.0 million in 2019. This was because of cautious management and tightening its risk appetite by reducing exposure to higher LTV lending. However, the mutual was able to grow its reserves and strengthen its balance sheet position.

Retail savings grew from £677.3 million in 2019 to £690.2 million and net interest income grew to £9.31 million, up from £9.10 million in 2019.

Profit before tax fell to £0.56 million, down from £0.60 million in the previous year, mainly due to increased impairment charges for loans and advances to customers due to the impact of Covid-19 on borrowers’ ability to meet their mortgage payments. Higher administrative expenses from Covid-19 related practices and, in the prior year, a gain from the sale of the Society’s previous head office building also impacted profit before tax levels.

Hinckley & Rugby Building Society, like many other organisations, has seen significant changes to business due to the Covid-19 pandemic.

The Society’s CEO, Colin Fyfe, says:

“With a blend of staff working across branches, in our head office and at home, we’ve been able to maintain our service throughout restrictions, providing essential banking for customers and extra support for brokers. Investment in digital services has been extremely beneficial to us and our members during Covid-19, and part of the reason why we have been successful in our response to the pandemic.

“Being there for the community is something which is always important to us, which is why our staff found new ways to give back and were able to increase their volunteering hours through online sessions with schools and organisations. Throughout the pandemic, I’m proud to say that the team has made over 2,500 welfare calls to customers to check on how they are coping with the uncertainty. For the wider community, we teamed up with local radio station, Fosse 107, as a sponsor for a ‘Money Matters’ segment – in which I answered listeners’ questions on their financial worries.”

Financial struggles were also something impacting Hinckley & Rugby’s customers, which is why its Mortgage Support Promise was introduced, allowing members to take a Mortgage Payment Break. This has benefitted approximately 10% of the Society’s mortgage members and has been a successful exercise with only a small number of customers needing longer-term support.

Colin says:

“We’re always ready to help our members, which is why we have been working closely with customers who have been experiencing difficulties, to find affordable solutions for their financial worries.

“Despite the uncertainty everyone has faced in the past year, our financial performance has been strong and we have held our profit levels flat, even though we had a range of additional costs. We invested in new systems and resource, taking on 25 new starters and avoiding furloughing a single team member or accessing any Covid-19 government grants.”

The Society is optimistic about 2021 and is holding a virtual Annual General Meeting later in the month which will allow members to join and hear about the Society’s performance and ask questions about future plans.

Hinckley & Rugby Building Society will present its Annual Report to members during its 155th AGM at 6.00pm on 30 March. This year’s AGM will be held online.

The Society’s Annual Report & Accounts 2020 and Annual Review can be found, along with further information about this year’s AGM, here.