Pre-tax profits have taken a hit at a Staffordshire building society after a challenging 2020.
Leek United Building Society recorded pre-tax profits of £0.9 million for 2020, down from £2.4 million in 2019.
Bosses say the decrease – which was ‘expected’ – can be attributed to the challenges presented by the global pandemic and an investment in digital technology at its 12 branches.
But despite the fall in profit, Leek United successfully grew its mortgage balances by £15 million to £864 million from £849 million in 2019.
While total assets also increased to a record £1.15 billion – up from £1.09 billion the previous year.
In its 2020 annual report, Leek United chief executive Andrew Healy said: “As a mutual building society, we do not seek to maximise profits but to achieve a level of profitability that is sufficient to balance member value with the need to have a robust capital position to fund future investment in our business.
“The society delivered a resilient operational and capital performance in 2020 despite difficult market conditions, maintaining strong service levels and making significant progress with our investment programme while continuing to grow both our mortgage and savings books. However, as with many organisations, our short term financial performance was impacted by the economic environment and profitability is lower year-on-year.”
Mr Healy went on to explain how the society’s financial strength throughout the pandemic meant that it did not need to access any Government help or the furlough scheme and did not make any redundancies or reduce staff working hours.
As a result of its investment in IT, the society was able to transition head office staff to home working within a matter of days and frontline staff in branches quickly adjusted to new ways of working.
It also managed to raise more than £90,000 for local community groups and charities during the year.
Mr Healy added: “I’m extremely proud that the society not only navigated safely through an incredibly challenging year, but that we continued our journey of progress in terms of modernisation and strengthening our financial and operational platform for the future.
“The extent to which our staff individually and collectively responded to the pandemic, changed working practices and reached out to support members was quite magnificent.
“Indeed it has been heartwarming to receive so many wonderful tributes from members regarding our employees during the year.
“We’re very grateful to our members for their ongoing loyalty and our message is that our society has emerged even stronger from this unprecedented year.”
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Over the next 12 months, Leek United will continue with its investment in digital technology and will start to invest in a modernising programme to upgrade its branches – including a major refurbishment at its flagship office in Derby Street, Leek.
It also hopes to set-up a charity to support charitable and community activities in the areas where it operates.
Mr Healy said: “2020 has proven that we have a wonderful team from the front counter right the way through to our boardroom, a team who consistently live our strong values and who demonstrate an unflinching commitment to the highest standards of service, corporate governance, compliance and risk management.
“There are of course many challenges ahead as we continue to manage the impacts and uncertainties arising from the Covid-19 crisis which is far from over.
“However, the society is in robust shape and is ready to tackle, as we always have throughout our 158-year history, the economic and other headwinds that will come our way.
“A positive and successful future lies ahead for Leek United as a vibrant, independent building society.”