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WestBromwich BldgSoc (WBS)

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Friday 01 June, 2007

WestBromwich BldgSoc

Final Results

West Bromwich Building Society
01 June 2007



West Bromwich Building Society has, for the 10th consecutive year, announced an
outstanding financial performance - one of the best in the whole sector.



Performance Highlights



•        Growth of 15.4% to a record £8.3bn assets.
•        Mortgage assets under management up 18% to a record £6.7bn.
•        Gross lending up 15.8% to a record £2.5bn.
•        Net savings balances up by £550m to a record £4.5bn.
•        Subsidiaries pre-tax profit up 25% to a record £22.8m.
•        Society management expense ratio down to a record 0.66%.
•        Pre-tax profits up by 14.5%.


These impressive results have enabled the Society to share a record £34.1m this
year (£30m in 2005/6) with members through better investment rates, loyalty
mortgage rates and other benefits to members.




Consolidated Income Statement
for the year ended 31st March 2007
                                                                                         2007            2006
                                                                                           £m              £m

Interest receivable and similar income                                                  412.7           343.2
Interest expense and similar charges                                                  (344.8)         (282.6)

Net interest receivable                                                                  67.9            60.6

Fees and commissions receivable                                                          19.9            18.3
Fees and commissions payable                                                            (2.7)           (5.2)
Total gains on investment properties                                                      6.3             3.8
Other operating income                                                                    8.6             9.4

Total operating income                                                                  100.0            86.9
Administrative expenses                                                                (47.7)          (42.9)
Depreciation and amortisation                                                           (5.6)           (5.4)
Impairment (losses)/credits on loans and advances                                       (1.3)             1.5
Provisions for liabilities                                                              (1.3)           (1.6)

Profit before tax                                                                        44.1            38.5
Tax expense                                                                            (11.3)          (11.1)

Profit for the year attributable to members of the Society                               32.8            27.4






Consolidated Statement of Recognised Income and Expense
for the year ended 31st March 2007
                                                                                         2007            2006
                                                                                           £m              £m
Available for sale investments:
                Valuation (loss)/gain taken to equity                                   (2.0)             0.5
Actuarial loss on retirement benefit obligations                                        (1.8)           (1.8)
Cash flow hedge losses taken to equity                                                  (0.1)
                                                                                                   -
Tax on items taken directly to equity                                                     1.1             0.4
Net cost recognised directly in equity                                                  (2.8)           (0.9)

Profit for the financial year                                                            32.8            27.4

Total recognised income and expense for the period                                       30.0            26.5



Group Balance Sheet
at 31st March 2007
                                                                                        2007            2006
                                                                                          £m              £m
    Assets
    Cash and balances with the Bank of England                                          11.7             8.6
    Loans and advances to credit institutions                                          207.2           342.2
    Investment securities - available-for-sale                                       1,243.8         1,031.3
    Derivative financial instruments                                                    33.4            17.8
    Loans and advances to customers:
       - Loans fully secured on residential                                          5,169.6         4,544.8
       property
       - Loans fully secured on land                                                 1,484.9         1,108.3
       - Other loans                                                                     0.3             0.3
    Intangible assets                                                                   13.4            13.8
    Investment properties                                                              114.2            96.5
    Property, plant and equipment                                                       22.3            24.5
    Deferred tax assets                                                                 10.6            10.6
    Trade and other receivables                                                          7.8             9.1

    Total Assets                                                                     8,319.2         7,207.8

    Liabilities
    Shares                                                                           4,521.2         3,975.5
    Amounts due to credit institutions                                                 287.7           242.7
    Amounts due to other customers                                                     870.0           864.9
    Derivative financial instruments                                                    14.3            10.8
    Debt securities in issue                                                         2,034.1         1,597.0
    Current tax liabilities                                                              2.5             4.6
    Deferred tax liabilities                                                             8.4             8.3
    Trade and other payables                                                            32.3            30.7
    Provisions for liabilities                                                           3.3             3.0
    Subordinated debt                                                                  161.1           112.4
    Subscribed capital                                                                  72.9            76.1
    Retirement benefit obligations                                                       4.5             4.9

    Total Liabilities                                                                8,012.3         6,930.9

    Equity
    General reserves                                                                   301.7           270.2
    Revaluation reserve                                                                  6.1             6.1
    Available for sale reserve                                                         (0.8)             0.6
    Cashflow reserve                                                                   (0.1)
                                                                                                         -
    Total equity attributable to members                                               306.9           276.9

    Total Liabilities and Equity                                                     8,319.2         7,207.8




Consolidated Cash Flow Statement
for the year ended 31st March 2007
                                                                                         2007             2006
                                                                                           £m               £m

Net cash inflow from operating activities                                              (69.1)            450.2

Tax paid                                                                               (12.1)            (9.4)
Cash flows from investing activities
     Purchase of investment securities                                              (3,725.0)        (1,663.8)
     Proceeds from disposal of investment securities                                  3,501.6          1,766.8
     Purchase of property, plant and equipment and intangible assets                    (3.2)            (2.7)
     Proceeds from disposal of property, plant and equipment                              0.2              0.1
     Purchase of investment property                                                   (14.2)           (15.6)
     Proceeds from disposal of investment properties                                      2.8              0.2
     Net new funding to subsidiaries
                                                                                  -                -
     Purchase of mortgage portfolios                                                  (166.8)          (436.3)
Net cash flows from investing activities                                              (404.6)          (351.3)

Cash flows from financing activities
     Issue of subordinated liabilities                                                   50.3            (0.1)
     Issue of subscribed capital                                                                          75.0
                                                                                  -
     Interest paid on subordinated liabilities                                          (7.3)            (5.8)
     Interest paid on subscribed capital                                                (4.6)            (2.0)
     Issue of mortgage backed loan notes                                                643.8            349.8
     Repayment of mortgage backed loan notes                                           (65.1)           (43.1)
Net cash flows from financing activities                                                617.1            373.8

Net increase in cash                                                                    131.3            463.3
Cash and cash equivalents at beginning of year                                          637.8            174.5
Cash and cash equivalents at end of year                                                769.1            637.8





Notes

 1. The financial information set out above, which was approved by the Board on
    31 May 2007, does not constitute accounts within the meaning of the Building
    Societies Act 1986.

 2. The financial information for the years ended 31 March 2007 and 31 March 2006
    has been extracted from the Annual Accounts for those years.  Annual
    Accounts for the year ended 31 March 2006 have been filed with the Financial
    Services Authority and those for the year ended 31 March 2007 will be filed
    with the Financial Services Authority following publication.  The Auditors'
    Report on the Annual Accounts for both years were unqualified.




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