Underlining its position as the region’s leading mortgage and savings provider, The Cumberland reported another strong year with healthy growth in mortgage lending, savings balances and profitability.
Writing in the annual report for the year to March, Chair John Hooper said the Society had performed “exceptionally well”, despite being a volatile year for financial markets and the wider UK economy.
Mortgage lending increased from £2.2bn to £2.37bn as the Society’s balance sheet topped £3bn for the first time. Deposit balances also grew, from £2.44bn to £2.61bn, while profit before tax rose to £26.6m.
More than half of those profits were the result of interest rate swaps that the Society took out to protect itself against a sudden and unexpected rise in interest rates. Operating profit also rose to £12.3m. This means, despite such an unpredictable year, the Society remains safe, resilient, and is well positioned to meet future challenges.
Mr Hooper said: "Looking ahead, we face multiple challenges that are likely to squeeze profits over the next two or three years. Higher inflation, at levels we haven’t seen since the 1970s, is impacting everyone and like everyone our costs are increasing.
"There are also signs that the housing market is slowing, which will inevitably affect the level of mortgage lending."
The Cumberland has also been working hard to transform their business under the Cumberland 2025 banner since 2018. Much has been achieved, and strategic options are currently being evaluated in order to further progress the work and secure a more sustainable future for the Society.
As a mutual organisation owned by its members - savers and borrowers - The Cumberland was quick to raise interest rates for savers as the Bank of England’s base rate increased repeatedly during 2022-23.
Chief Executive Des Moore said that higher interest rates presented an opportunity for the Society to live up to its slogan of ‘kinder banking’.
He added: “To reassure borrowers, we’ve pledged to give those coming to the end of fixed-rate terms preferential deals on new products and we’re on hand with specialist advisers if any of our borrowers experience financial difficulty.”
The Cumberland is a specialist lender to the hospitality sector. Lending here increased too, driven by businesses switching loans from other lenders to benefit from The Cumberland’s relationship banking model.
Borderway Finance, the Society’s specialist vehicle finance subsidiary, performed strongly contributing almost £1m to pre-tax profits.
The Society donated £205,000 to charitable causes in 2022-23. This year, it has pledged to donate £2 to FareShare Lancashire & Cumbria for every vote received at its annual general meeting.
The year saw The Cumberland retain its Feefo Platinum Trusted Service Award for customer service with 4.8 out of 5 customer satisfaction rating. The Society was also recognised nationally as one of the best companies for customer experience, being awarded the Best Customer Experience in the Crisis at UK Customer Experience Awards. It was also named as one of the ‘best large companies in the Northwest to work for’ by Best Companies.
Mr Moore paid tribute to The Cumberland’s workforce who “never faltered in their dedication to looking after our customers”.
He said the Society remained committed to its branch network at a time when many banks are shutting branches. The year saw the refurbishment of the Maryport branch while plans are back on track for the revamp of the flagship branch in English Street, Carlisle, delayed by the Covid pandemic.
The chief executive added: “Going forward, the way we deliver services will continue to evolve but one thing remains constant. The Cumberland began its life with an ethos of kindness rooted in community. That has always been the case and always will be.”