The mutual says retail mortgage balances rose 2.6% to £8.2bn at the end of December, in an annual statement.  

During the year, it gave mortgages to more than 4,500 first-time buyers. Its commercial team helped fund more than 200 new homes, while it committed £19m in lending to housing associations for affordable homes across the country.  

It says that “ongoing economic uncertainty” throughout the period “created volatility within impairment provisions”.  

The business says its “primary driver for the reduction in profit” was booking a £14.8m impairment charge during the year, compared to releasing £15.4m from its cash cushion the year before, as it “takes a prudent view of the economy over the next 18 months”.  

Total assets lifted 3.7% to £11.3bn. Its capital CET1 ratio, which compares capital against risk-weighted assets, fell to 26.5% from 34% a year ago. Savings balances edged 1.2% higher to £8.1bn.  

Principality Building Society chief executive Julie-Ann Haines says: “Our members can be assured we have a strong balance sheet and capital to reinvest in the business for their benefit.”  

She adds: “With unfavourable economic conditions expected to last until at least 2024, our business remains resilient and able to endure these difficult times.”