REG - Principality Bld Soc - Final Results

CACI InternationalAnnouncement

25/02/2026 08:15

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RNS Number : 3254U  Principality Building Society  25 February 2026

RNS RELEASE
                               EMBARGOED UNTIL
7:00AM 25 FEBRUARY 2026

PRINCIPALITY BUILDING SOCIETY REPORTS SOLID PERFORMANCE IN READINESS FOR
TRANSFORMATION TO MEET THE NEEDS OF THE NEXT GENERATION OF CUSTOMERS

Principality Building Society has announced solid results for the year ending
31 December 2025. Against a backdrop of elevated rates and economic
uncertainty, the UK's 6(th) largest building society has delivered real value
for both savers and borrowers - helping more people grow their savings and buy
a home.

Under new leadership, Principality is sharpening its focus on commercial
performance as it reinforces its commitment to its Members through the
delivery of a strong digital offering that complements its unique branch
presence.

Wales' largest mutual is staying true to its roots, balancing the need to
drive returns with delivering its purpose, enabling investment to transform
the business to support future generations of customers and Members.

Performance highlights:

·    Our statutory profit before tax has grown to £60m (2024: £49.2m)

·    Efficient management of our running costs has brought our Statutory
Management Expense Ratio down (0.84% in 2025, 0.94% in 2024)

·    Our mortgage book has grown by £0.6bn, taking our residential
lending to £11.1bn (2024: £10.5bn)

·    We've grown our savings balances by £0.8bn to £11.6bn in 2025
(2024: £10.8bn)

·    Record number of first-time buyers as we increase our total to 8,277
(2024: 8,120)

Iain Mansfield, Chief Executive Officer of Principality Building Society said:

"Having served this business for the last 10 years of my career, I'm immensely
proud to be leading the Society. It's the start of a genuinely
transformational period, one where we will take the next bold steps to
reimagine how we deliver for our Members.

The pace of societal change is rapid, with advancements in technology
reshaping financial services markets and customer expectations.

At the same time, Members and businesses face a volatile external environment
and economic uncertainty, with the Bank of England base
rate remaining elevated."

Our Financial Results

"2025 has been a year of progress for the Society. A year where we moved the
organisation forward in meaningful ways, while delivering real value for our
savers and our borrowers - helping people to save and to buy their own homes.

 

Despite this backdrop, your Society has delivered robust financial results
with profit before tax of £60m (2024: £49.2m) as we stay focused on creating
value for our Members.

 

We have continued the work to streamline and simplify our business, and as a
result our Management Expense Ratio (ManEx), the cost of running the business,
has fallen to 0.84% (2024: 0.94%).

 

Across our savings and lending businesses, there is positive news to report.

 

In the second half of 2025, we strengthened our funding portfolio by
establishing a covered bond programme, enhancing the Society's financial
resilience, stability and access to capital markets, while increasing funding
diversity and optionality in line with competitors. I am also pleased to share
that we have repaid our Term Funding Scheme with additional incentives for
Small and Medium-sized Enterprises (TFSME) in full.

 

We've also grown our savings balances by £0.8bn to £11.6bn in 2025 (2024:
£10.8bn), as we strive to maintain Member value through our retail network
while keeping a sharp focus on driving forward our digital savings channels.

 

As a responsible business, we have prioritised returns over growth, while also
utilising excess liquidity which is why our total assets now sit at £13.9bn
(2024: £14.1bn).

 

Our prudent lending practices mean that in the face of competitive savings and
lending markets, we have still seen sustainable net growth in our mortgage
book of £0.6bn, taking our residential lending to £11.1bn in 2025 (2024:
£10.5bn), and our cumulative growth over the last three years to £2.8bn.

 

Despite the falling Bank of England base rate - we have converted cash into
higher yielding mortgage assets, which has allowed us to stabilise Net
Interest Margin, year on year (2025: 1.21%, 2024: 1.22%).

 

I'm pleased to share that we maintained a strong capital and liquidity
position during the year, with a capital ratio of 18.7% (2024: 19.8%) and
liquidity ratio of 13.6% (2024: 18.9%), providing a solid foundation for
continued growth and investment in the Society, ensuring we are able to meet
the needs of our Members now, and in the future."

 

Lending Business - Where Home Matters

Iain continued: "Helping people own their own homes remains at the heart of
what we do, central to our strategy, and driver of the growth of our mortgage
book to 88,941 Members in 2025 (2024: 87,558).

In the face of easing affordability, buyer demand has remained resilient.
With a strong demand for our 95% LTV products, combined with our inclusive
lending criteria, we helped 8,277 people take their first step onto the
property ladder (2024: 8,120).

We continue to invest year-on-year in enhancing the intermediary experience,
making it easier for brokers to do business with us. This commitment is
reflected in our recognition of Best Building Society for Customer Service in
2024 at the What Mortgage Awards, an award we have received for the 8th
consecutive year.

Principality Commercial

Iain continued: "Our lending goes further, with our commercial lending
business helping to create new homes in areas that need them, funding both
social and private homes and boosting affordable housing provision. With
aspirations to reach £1bn in 2026, the lending book for the commercial
business grew by 9.3% since the start of 2025 to £867m (2024: £793m), with
£70m lent to Housing Associations (2024: £51m).

Building on our success in Wales, our commercial business took its first
steps into the English housing association market, with Rochdale Boroughwide
Housing Association. The £20m of funding provided by Principality will go
towards maintaining and improving the housing association's existing stock
of social and affordable homes in the east Greater Manchester area.

The commercial business remains a key strategic priority, as we continue to
strengthen our work with Welsh Government and local authorities in Wales, to
help more people buy their own home, revitalise town centres and provide
funding to the majority of housing associations in Wales 1  (#_ftn1) ."

Savings Business - Helping More People to Save

Iain continued: "2025 has been another strong year for our savings business,
with more people choosing to save regularly with Principality than ever before
(2025: 94,521, 2024: 81,871).

Delivering value to our Members is what sets us apart from traditional banks,
who focus on returns for shareholders.  I'm proud that Principality
consistently provides competitive savings rates that reward loyalty, with
£88m value returned to Members through above market average
savings rates. 2  (#_ftn2)

Making it as easy as possible to start saving is a priority, whether online or
in person at one of our 54 branches or 15 agencies.

With this in mind, I'm pleased to report that work has started on delivery of
the first phase of our new mobile app, following the launch of our new website
in 2024.

Alongside our digital journeys, we reaffirmed our commitment to our branch
network until at least 2030 3  (#_ftn3) . As traditional banks withdraw,
Principality remains rooted in our communities - relocating our historic
Swansea branch to a more central location to protect choice for local
Members."

Making a difference in the communities we serve

Iain continued: "As the financial services provider with the largest branch
footprint in Wales, we know our impact makes a meaningful difference. I was
pleased to see the 5(th) round of our Future Generations Fund launched, which
saw £500,000 distributed to projects in local communities.

2025 also saw the launch of our partnership with the children's charity
Barnardo's Cymru. Through the generosity of colleagues and Members, over
£237,000 has been raised, directly supporting vulnerable children in
communities across the country. This contribution brings our total charitable
fundraising to more than £2m since 2014 as we continue to invest in our
communities.

At Principality, inclusion and diversity are not standalone initiatives. They
are baked into our DNA. I'm proud that our inclusivity by design approach has
been recognised once again in the Inclusive Top 50 UK Employers list."

 

Looking Ahead

Iain continued: "This is a pivotal moment for the Society, as we navigate a
period of subdued economic growth, balancing the needs of savers and borrowers
as we face into the Bank of England projected rate declines, while also
recognising the need to invest and evolve the business for the longer-term.

This means reimagining how we deliver for Members now, as
a trusted, digital, Society with excellent customer service that is easy to
do business with, while also using our convening power in the
sector to drive impact beyond our scale.

We are a mutual with the scale, ambition and a sharp commercial focus that
will enable investment that continues to drive results and ensure
we remain relevant for our Members today and tomorrow."

Notes to Editors

Key Performance Highlights (2025):

·    Total assets: £13.9bn (December 2024: £14.1bn)

·    Retail mortgage balances: £11.1bn (December 2024: £10.5bn)

·    Savings balances: £11.6bn (December 2024: £10.8bn)

·    Statutory profit before tax: £60m (December 2024: £49.2m)

·    Underlying profit before tax: £60.5m (December 2024: £40.3m)

·    Common Equity Tier 1 ratio: 18.7% (December 2024: 19.8%)

·    Net Interest Margin: 1.21% (December 2024: 1.22%)

·    Statutory Management Expense Ratio: 0.84% (Dec-24 0.94%)

 

Principality Building Society

·     1  Principality Commercial provides funding to 18 of 33 housing
associations in Wales

·    Formed in 1860, Principality is Wales' largest building society.

·     2  Total value of benefit to Principality BS customers from November
2024 - October 2025, based on the Society's average month end savings rate
compared to the CACI ltd's Current Account and Savings Database rest of market
average rate for savings accounts, excluding current accounts and offset
savings, for the 12 months of the year.

·     3  The Society is committed to supporting the communities of Wales,
with 54 branches and 15 agencies in Wales and the borders. Our announcement
reinforces the Society's commitment to protect our branch presence, we will
only close a branch when operationally we absolutely need to, for example a
lease expiry enforced by a landlord, or if we have multiple branches in one
location.

·    Principality is the 6th largest building society in the UK.

·    The Society has assets of £13.9 billion.

·    Principality is committed to remaining a mutual organisation.

 

ENDS

For media enquiries, interviews or data requests, please contact:

Gwyneth Sweatman, Senior External Relations Manager

Email: Press@principality.co.uk (mailto:Press@principality.co.uk)   | Press
Office: 07702817255

Follow us on LinkedIn: Principality Building Society

Visit: www.Principality.co.uk (https://www.Principality.co.uk)

 

 

 1  (#_ftnref1) Principality Commercial provides funding
to 18 of 33 housing associations in Wales

 2  (#_ftnref2) Total value of benefit to Principality BS customers from
November 2024 - October 2025, based on the Society's average month end
savings rate compared to the CACI ltd's Current Account and Savings Database
rest of market average rate for savings accounts, excluding current accounts
and offset savings, for the 12 months of the year.

 3  (#_ftnref3) We will only close a branch when operationally we absolutely
need to, for example a lease expiry enforced by a landlord, or if we have
multiple branches in one location

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