Building society defies credit crunch

THE Norwich & Peterborough Building Society said yesterday that a new approach to lending had helped it achieve another year of strong annual results despite the “credit crunch” crisis.

THE Norwich & Peterborough Building Society said yesterday that a new approach to lending had helped it achieve another year of strong annual results despite the “credit crunch” crisis.

The N&P reports a group pre-tax profit of £24.3mllion for 2007, up 20.3% on 2006, on total income up by 10.3% to £83.5million.

Costs grew by only 4.7%, with the management expense ratio down 0.11% from 1.51% in 2006 to 1.40%.

Matthew Bullock, the society's chief executive, said yesterday: “2007 will be remembered for turning into an exceptionally turbulent year in financial markets. Despite this, it was our strongest performance yet, following a vintage year in 2006, which we then believed marked a high point.


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“In part our success in 2007 was due to our using our Basel ll lending approach to target our mortgage lending precisely to avoid problems and poor returns.

“As the first UK firm to get the go ahead from the Financial Services Authority (FSA) to use this more advanced approach, we were able to take good advantage both in the very competitive first half of the year, and then in the more turbulent 'credit crunch' period that followed.

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“Our expert financial planners, who are trained to give independent financial advice to customers through our branches, really 'earned their corn,' helping many more of our members plan their investments through the bad times as well as the good.

“Our attractive banking and deposit range also appeared steadily in national newspapers' Best Buy tables as offering consistent, good value and, unlike some, we benefited in the second half from a 'flight to quality' by depositors,” added Mr Bullock.

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