Total profit before tax was £1.9 million, down from £3.3 million in 2018. The reduction in profit is partly related to the cost of funding the higher savings balances, together with significant investment in IT infrastructure and adverse fair value movements on derivatives.

Mortgages

There was a £13 million reduction in the size of the mortgage book to £523 million from £536 million in 2018 due to a high number of planned, low margin redemptions. The society says this is has enabled it to focus on a high quality, low risk mortgage book.

The society made a number of enhancements to its mortgage offering, including exclusive products for first-time buyers, new retirement interest-only mortgages as an extension to later life deals and the launch of holiday let loans.

Intermediary partners accounted for 90% of mortgage business and the society has embarked on a programme of widening availability through trusted networks and clubs.

Retail Savings

Savings grew by £31 million, taking total overall deposits to a record £603 million. Savings growth was a priority in 2019 with the strong performance enabling the society to both repay £4 million of subordinated debt early – resulting in savings on interest payments over the next five years – and also repay £15 million of Term Funding Scheme earlier than planned.

Retail savings will continue to be a priority for the society over the next twelve months with the ambition of developing an online savings proposition by 2021.

Branches

A branch network remains at the very core of the Society’s proposition, with the Ipswich being the last remaining financial services provider in Aldeburgh and Halesworth.

During the year the society refurbished its branch in Hadleigh, returning the building to its original ‘Suffolk Pink’ colouring and aptly timed to celebrate 40-years in the high street.

Through branch adoption of grass-roots charities, over £36,000 was donated through the society’s Mutual Advantage and We Care savings accounts.

Comment

Alan Harris, Ipswich Building Society chairman, commented on the results: “As well as undertaking the many activities very visible to members and the community, last year much time and effort has been invested behind the scenes in our governance and oversight as this, quite rightly, remains a key focus for our regulators.

“We continue to apply our Enterprise Risk Management Framework to give oversight and scrutiny of operations, finances and decision making. In short, this means taking business risks that are within appetite and ensuring they are effectively managed.

“We anticipate 2020 being another challenging environment for financial services. Activity in the housing sector is reduced and house price inflation is low, or in some areas, in decline, and we anticipate strong price competition in mortgages as well as savings in the near future.

“However, our strength is in our simplicity and we remain focused on delivering only for our members as a strong and committed mutual.”