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Newcastle reveals £25.8m loss

Newcastle building society has revealed it made a loss of £25.8m in 2008 thanks to Iceland exposure and FSCS levies.

The mutual had exposures of around £43m to the failed Icelandic banks, and was hit by a £6.8m FSCS levy. It made a profit of £15.8m before the impairments, down from 2007’s £18.1m.

Although it made a loss, Newcastle Increased retail share balances by 13 per cent to £3.3bn, up from £2.9bn in 2007, attracting more than 43,000 new customers.

At the end of the year only 0.96 per cent of residential borrowers were in arrears of greater than three months and the average loan to value across the Society’s residential mortgages was just 50.6 per cent.

Newcastle chief executive Colin Seccombe says: “Results this year have been impacted in a major way by the exceptional market events of 2008. However, our underlying results are solid; we have decreased our wholesale funding ratio and have seen retail balances and other income increase, as well as strengthening our business continuity capability through the opening of new premises.

“The year has presented extremely tough challenges and we expect that trading conditions will continue to be very difficult in 2009. However, we are in a strong, fit position for the future and we are committed to remaining an independent, mutual building society for the benefit of all our members.”

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