Against the background of a difficult economic environment, the Cumberland recorded a post-tax profit of £6.34 million, which has reinforced the Society’s already strong capital position and taken it beyond £100 million for the first time in its 160 year history.

Despite intense competition, particularly from the state supported banks, the Society received a net inflow from savers of £34 million, which built upon the record inflows of the previous two years and has further reduced the Cumberland’s already low usage of funding from the financial markets.

The Cumberland’s current accounts also continued to prove popular as people look for a more personal approach to that offered by the main national bank. Over 5,000 new accounts were opened in 2009/10 and the number of current accounts held with the Society has increased by more than 50% over the last three years. The Cumberland also continues to be one of the few current account providers who do not charge customers to use its debit card abroad.

The Cumberland remained active in the mortgage market throughout 2009/10, issuing more than £150 million of new lending, and was named ‘Best Regional Building Society’ by the industry magazine Mortgage Finance Gazette in recognition of its consistently competitive mortgage pricing.

Despite the economic conditions, the level of arrears continued to decline and remains well below the national average. At 31 March 2010, 0.21% of the Cumberland’s residential mortgages were in arrears of three months or more compared to 0.28% a year earlier, and the Society had one residential property in possession.

The Cumberland continued to support local communities in 2009/10 with donations of more than £100,000 to a range of community and charitable projects. The Society has also pledged to donate 50p for each vote received at its 2010 Annual General Meeting to Macmillan Cancer Support.

Commenting on the results, Chairman, Michael Pratt said, “I am pleased to report another excellent set of financial and business results, which demonstrate the continuing strength of the Cumberland’s long-term business strategy.

It has been a difficult year for the British economy in general and the financial services industry in particular.
These results are testimony to our well-established strategy of remaining a traditional regional building society, which provides consistent long-term value, treats its customers fairly, and delivers a market-leading level of customer service.

The continued growth in current accounts is particularly encouraging. We aim to offer a personal approach to banking while enabling our members to benefit from the latest technology. I believe this will be a key growth area as an increasing number of people look for an alternative to the main national banks.”

Key financial results are summarised below:

• Profit after tax was £6.34 million, 0.41% of mean total assets.
• Share balances increased by 2.9% to £1.32 billion.
• Mortgage balances reduced by 0.3% to £1.18 billion
• Administrative expenses and depreciation fell by 3.2%

For more information, see the full Annual Report and Annual Review.