Progressive not concerned over mortgage plan as profits hit £5.7m
Stringent borrowing guidelines in the Mortgage Market Review will make little or no difference to the Progressive Building Society's lending practices, the society said as it revealed an increase of over 80% in pre-tax profits.
Northern Ireland's largest locally-owned financial institution announced 2013 pre-tax profits of £5.7m at its annual meeting, as well as a total gross mortgage assets increase to £1.32m.
The healthy balance sheet was presented just as members of the City of Derry Building Society voted in favour of a merger with the Progressive, which celebrates its centenary next month.
The vote creates Northern Ireland's sole building society in a move described by Progressive's chief executive Darina Armstrong as a "key priority" in increasing its presence in the city.
Mrs Armstrong confirmed results were "better than expected" with pre-tax profits up from £3.1m in 2012.
"We have achieved an excellent performance in our core markets, maintaining a well-structured balance sheet with total assets sitting at £1,620m," she said.
"The first half of 2013 continued to be challenging with a difficult and stagnant housing market in Northern Ireland.
"However, the latter half of the year saw encouraging signs in buyers' confidence as the market made a positive upward turn which bodes well for 2014 and beyond."
The Mortgage Market Review from the Financial Conduct Authority came into force at the weekend, bringing stricter financial criteria for borrowers seeking mortgages.
But Mrs Armstrong said Progressive has always adhered to rigorous affordability guidelines to prevent borrowers from getting in too deep.
"We have always had a more prudent approach so it won't affect us too much," she said.
She said the society always asked "certain questions" but said it perhaps did not delve as deeply as the MMR proposals, which will reportedly raise everything from money spent on eating out to the cost of borrowers' haircuts.
The society's head of sales and marketing Declan Moore said "the point of them is to make people think".
"The guidelines are trying to bring in a little more common sense," he said.
Admitting 2013 was a "frustrating year" for savers with record low interest rates, Mrs Armstrong revealed that the society still managed to attract £234m of new retail savings by offering competitive savings rates to new members.
She confirmed that the building society aims to bolster member security and build on its financial strength in the next year, and also revealed a £1m investment in improving its Ballymena branch.
The society has 12 branches in towns throughout Northern Ireland and approximately 40 agents linked to various brokers and businesses in more rural areas.