Swansea Building Society has reported a strong financial performance for the year ended December 2022, despite challenging global economic conditions.
The Society’s total assets have increased by £66.3m, to £529.8m, with mortgage balances increasing by £50.0m to £410.9m and savings balances increasing by £61.6m to £492.9m.
Profit before tax has also increased by £0.2m to £5.4m, and capital and reserves have increased by £4.4m to £35.1m. The Society attributes its success to the strength of the housing market, which saw house prices rise nationally by an average of 5%, as demand for property exceeded supply.
However, the Society also acknowledges the negative impact of global challenges and significant increases in energy prices on the economy, which have added to already significant inflationary pressures at levels unseen for decades.
The Bank of England (BoE) responded by increasing its Bank Base Rate nine times during the year, with this standing at 3.5% at the end of December 2022, its highest since October 2008.
The Society is aware that many of its mortgage customers have never experienced such a rising interest rate market and is conscious of the potential impact of higher interest rates on household spending.
The BoE forecasts that household spending will be squeezed by higher interest rates, continuing but reducing inflation, and increased taxes. Higher unemployment is also predicted, potentially resulting in the UK economy entering into recession.
