Annual Financial Report

Nottingham Building Society

05 March 2026

 

Nottingham Building Society Results for the year ended 31st December 2025 Nottingham Building Society (the 'Society') achieves strong financial results and progresses its transformation in a year of consolidation Key Performance Indicators ('KPIs') The KPIs disclosed below are based on the position as at 31st December or for the 12-month period ended 31st December, unless otherwise stated. The average Liquidity Coverage Ratio ('LCR') represents a 12-month average for the year ended 31st December 2025. ·      £16.7m profit before tax (2024: £13.9m), representing an increase of 20.1%; ·      £20.9m underlying profit before tax (2024: £22.8m), representing a decrease of £1.9m; ·      £164.3m total interest paid to savers (2024: £154.6m), an increase of £9.7m; ·      Expected Credit Loss ('ECL') coverage ratio of 11bps (2024: 12bps), a decrease of 1bp; ·      Borrower resilience remains strong, with 30+ day arrears at 0.75% (2024: 0.55%); ·      1.62% net interest margin (2024: 1.72%), being an absolute decrease of 0.10%; ·      76.4% underlying cost: income ratio (2024: 73.0%), an increase of 3.4%; ·      £4.3bn total mortgage assets (2024: £4.2bn), representing an increase of £0.1bn; ·      £4.6bn total savings balance (2024: £4.4bn), an uplift of £0.2bn; ·      £883m gross new lending (2024: £1,215m), representing a decrease of 27.3%; ·      6,668 new mortgage customers (2024: 9,166), a decrease of 27.3%; ·      64.3% net promoter score (2024: 61.5%); ·      4.8 Trustpilot score (2024: 4.9); ·      3,938 colleague volunteering hours (2024: 3,522); ·    The Society continues to manage its Capital and Liquidity positions in excess of regulatory requirements, demonstrated by: o  14.1% Common Equity Tier 1 ('CET1') Ratio (2024: 13.7%); o  5.1% Leverage Ratio (2024: 4.9%); and o  236% average LCR (2024: 172%). Sue Hayes, Chief Executive Officer ('CEO') commented: "2025 has been a year of deliberate consolidation for Nottingham Building Society, following two years of strong double‑digit growth. We made a conscious decision to moderate lending while continuing to prioritise substantial investments in our systems, processes, and capabilities to strengthen long‑term resilience and enhance our operating foundations. This ongoing programme is designed to ensure the Society is well prepared for its next phase of purposeful innovation and sustainable growth - and well positioned to deliver for members in the years ahead. Against a backdrop of heightened market volatility, global policy uncertainty and a more cautious UK mortgage environment following the November 2025 Budget, we remained focused on delivering for our members. New mortgage lending totalled £0.9bn (2024: £1.2bn), reflecting our deliberate decision to moderate volumes while implementing and embedding our new mortgage platform. Despite ongoing affordability pressures, borrower resilience remains strong, with the proportion of accounts in arrears by 30 days or more at 0.75% as at 31 December 2025 (December 2024: 0.55%). In addition, our lending performed exceptionally well, with arrears remaining very low, reinforcing the quality of our underwriting and risk discipline. We successfully launched our new Broker Portal in July, which is already transforming our lending operations by reducing time to offer, improving decisioning capability, and significantly enhancing broker experience. This marks a key milestone in our evolution as a specialist residential lender and positions us strongly as we scale further into specialist segments in 2026. Alongside this, we continued to grow our specialist lending proposition through our partnership with Gen H, which has now supported over 5,000 new homeowners with around £1bn of funding from the Society. Our funding resilience was further strengthened during the year through our inaugural £350m Public RMBS issuance in February 2025 and the successful repayment of our TFSME facility, diversifying our funding base and demonstrating the increasing sophistication of our treasury and risk management capabilities. These milestones enhance our ability to support both borrowers and savers through changing market conditions. Our savings franchise also performed strongly. Total interest paid to savers increased to £164.3m (2024: £154.6m), and we delivered a record ISA season, more than doubling the level achieved in 2024. We remained committed to offering choice and value across both branch and digital channels, including passbook and digital options shaped directly by member feedback, while continuing to advocate on behalf of savers during a period of significant policy change. Maintaining excellent service throughout a year of considerable operational and technological change was a key priority, and I am pleased that we ended the year with a 4.8 Trustpilot score from more than 5,000 reviews. It's a testament to our team that we continue to be the one of the highest‑rated building societies on the platform. This reflects the professionalism and commitment of our colleagues, whose dedication has been central to our progress during a year of significant change. 2025 also marked substantial progress in strengthening our technology and operational foundations. We embedded key upgrades across our mortgage platforms, cloud environment, cybersecurity and AI capability, while our Change Excellence programme continued to build organisational capability and received national recognition through award shortlisting. These investments lay the groundwork for an innovation‑led phase in 2026 and reinforce our operational resilience. As a modern mutual, our role extends beyond financial performance. During the year, we committed £144,000, equivalent to almost 1% of our 2024 pre‑tax profit, into local community initiatives, and colleagues contributed a record 3,938 volunteering hours. We continued to strengthen partnerships that tackle homelessness, improve social mobility and support young people across our communities, while also deepening our commitment to inclusion through the sponsorship of Notts Pride for the second consecutive year and, for the first time, Belper Pride. This work reflects our belief that long‑term success is measured not just by financial outcomes, but by the positive impact we create for members and society. Looking ahead to 2026, we expect continued economic uncertainty and the likelihood of further Bank Rate reductions, requiring careful management of our Net Interest Margin. With strong foundations now in place, our focus turns to scaling our specialist lending proposition, further enhancing member experience across every channel, embedding our technology investments and continuing to strengthen our operational resilience, data and cloud capabilities. Our recent inclusion in the FCA and PRA's inaugural Scale‑up Unit cohort further reflects our ambition to grow responsibly and at pace, while maintaining the highest regulatory standards. We enter 2026 as a modern mutual with momentum, clarity of purpose and the capability to deliver sustainable, long‑term growth for our members. I would like to thank our members for their continued trust and support, and our colleagues for their exceptional commitment and professionalism throughout a year of meaningful progress and change." Sue Hayes Chief Executive Officer 4th March 2026 Board Changes The Society announces that, Anthony Murphy has decided to step down as Chief Financial Officer, to spend more time with his family in Ireland. Anthony will be stepping down from the Board and leaving the Society in May 2026. A process to appoint a successor has begun, and an update will be provided in due course. Sue Hayes, Chief Executive Officer, said: "I would like to thank Anthony for his significant contribution. During his time, we have achieved strong profitable growth, significantly enhanced the rigour and quality of our financial management and regulatory reporting and delivered £1 billion of forward-flow funding with Gen H.  We also delivered our inaugural RMBS issuance, a landmark transaction for the Society that demonstrated the growing sophistication of our treasury capabilities. I thank Anthony for his contribution and wish him well for the future." Robin Ashton, Chairman, said:" On behalf of the Board, I would like to extend my thanks to Anthony for his notable contribution. The Society he leaves behind is stronger and better positioned to achieve sustainable, long-term growth for our members both today and in the future."

Consolidated income statement for the year ended 31 December 2025					2025		2024
					£m		£m
Interest receivable and similar income					289.6		278.0
Interest payable and similar charges					(202.9)		(194.4)
Net interest income					86.7		83.6
Fees and commissions receivable					1.8		2.0
Fees and commissions payable					(1.5)		(1.1)
(Losses) / gains from derivative financial instruments					(3.0)		3.9
Total net income					84.0		88.4
Administrative expenses					(63.1)		(59.4)
Depreciation and amortisation					(4.8)		(4.9)
Operating profit before impairment and losses on disposal of treasury assets					16.1		24.1
Impairment credit - loans and advances to customers					0.7		-
Charge for amounts written off- loans and advances to members					(0.3)		-
Voluntary payment expense associated with Philips Trust Corporation					0.4		(11.2)
Recoveries against Philips Trust Corporation expense					0.1		1.0
Movement in Equity Investment Fair Value					(1.1)		-
Profit on disposal of freehold land and buildings					0.8		-
Profit before tax					16.7		13.9
Tax charge					(6.0)		(4.6)
Profit after tax for the financial year					10.7		9.3
Reconciliation to underlying profit before tax					2025		2024
					£m		£m
Profit before tax					16.7		13.9
Losses / (gains) from derivative financial instruments					3.0		(3.9)
Net strategic investment costs					1.4		2.6
Voluntary payment expense associated with Philips Trust Corporation					(0.4)		11.2
Recoveries against Philips Trust Corporation expense					(0.1)		(1.0)
Movement in Equity Investment Fair Value					1.1		-
Profit on disposal of freehold land and buildings					(0.8)		-
Underlying profit before tax					20.9		22.8
Consolidated statement of comprehensive income for the year ended 31 December 2025					2025		2024
					£m		£m
Profit for the financial year					10.7		9.3
Items that will not be re-classified to the income statement
Re-measurements of defined benefit obligations					-		0.9
Revaluation of freehold land & buildings					2.8		-
Tax on items that will not be re-classified					(0.1)		(0.2)
Items that may subsequently be re-classified to the income statement
Valuation losses taken to reserves					(2.0)		(0.5)
Amounts transferred to the Income Statement on micro hedge     relationships					2.0		0.3
Other comprehensive income for the year net of income tax					2.7		0.5
Total comprehensive income for the year					13.4		9.8

Consolidated statement of financial position as at 31 December 2025	2025		2024
	£m		£m
Assets
Liquid assets	1,071.1		917.0
Derivative financial instruments	29.4		80.9
Loans and advances to customers	4,305.0		4,201.8
Fixed and other assets	30.8		27.0
Total assets	5,436.3		5,226.7
Liabilities
Shares	4,631.2		4,350.5
Wholesale funding	465.5		557.2
Derivative financial instruments	31.2		22.9
Other liabilities	17.7		18.8
Subscribed capital	24.0		24.0
Total liabilities	5,169.6		4,973.4
Reserves
General reserves	264.0		253.3
Revaluation reserve	2.7		-
Total reserves attributable to members of the Society	266.7		253.3
Total reserves and liabilities	5,436.3		5,226.7

Consolidated statement of changes in members' interests as at 31 December 2025			General reserve	FVOCI reserve	Revaluation reserve		Total
			£m	£m	£m		£m
Balance as at 1 January 2025			253.3	-	-		253.3
Profit for the year			10.7	-	-		10.7
Other comprehensive income for the period (net of tax)
Net gains from changes in fair value			-	-	2.7		2.7
Total other comprehensive income			-	-	2.7		2.7
Total comprehensive income for the period			10.7	-	2.7		13.4
Balance as at 31 December 2025			264.0	-	2.7		266.7
Balance as at 1 January 2024			243.3	0.2	-		243.5
Profit for the year			9.3	-	-		9.3
Other comprehensive income for the period (net of tax)
Net gains from changes in fair value			0.7	(0.2)	-		0.5
Total other comprehensive income			0.7	(0.2)	-		0.5
Total comprehensive income for the period			10.0	(0.2)	-		9.8
Balance as at 31 December 2024			253.3	-	-		253.3

Summary consolidated cash flow statement for the year ended 31 December 2025
	2025		2024
	£m		£m
Cash flows from operating activities	22.2		21.0
Changes in operating assets and liabilities	112.6		114.7
Net cash generated from operating activities	134.8		135.7
Cash outflows from investing activities	(255.4)		(122.9)
Cash outflows from financing activities	(2.4)		(2.4)
(Decrease) / increase in cash and cash equivalents	(123.0)		10.4
Cash and cash equivalents at beginning of year	449.6		439.1
Cash and cash equivalents at end of year	326.6		449.5

Notes

The financial information set out above, which was approved by the Board of Directors on 4^th March 2026, does not constitute accounts within the meaning of the Building Societies Act 1986.

The financial information for the years ended 31^st December 2025 and 31^st December 2024 has been extracted from the Accounts for those years and on which the auditors have given an unqualified opinion.

 

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