As I reflect on the performance of the past year, I am proud of our robust response as a Bank in the face of market conditions that have been tough across the sector. The Property balance sheet grew by 18% and Customer Deposit balances grew by 16% with the net loan book of the Bank having grown by 13% to £878m and our total assets now at £1.1bn. Omni originations were held flat despite subdued consumer demand and Property originations grew in a difficult market. As a Bank, we have maintained good discipline in credit and pricing and remain focused on managing our resources prudently to maintain robust levels of profitability. All of this has been achieved whilst maintaining our core values and continuing to make substantial investments in our products, technology, people and our brand. This is reflected in the continued strong NPS and Trustpilot scores from our customers across our business lines.

As a result, we delivered a total Statutory Profit Before Tax (PBT) of £9.1m (2023: £11.4m) and a total PBT Return on Equity (“ROE”) of 7.8% putting us on a path to our medium-term goal of delivering sustainable, double-digit ROEs.

This outcome, though lower than last year, represents a solid performance against the headwinds we faced as a business. The continued pressure of the high-interest rate environment on our funding costs and a lagged effect on our asset pricing, have resulted in our Net Interest Margin (“NIM”) reducing to 5.4% (30 Sep 2023; 6.5%). However, the easing of the Bank base rate starting in August 2024 gives us confidence that NIM pressure will ease as we go forward into our next financial year.

Property impairments have been elevated in the year. Although this has been primarily concentrated in historical cohorts, particularly those originated pre 2020 and on 2nd charge loans that are no longer offered. We believe that by managing the risk on the legacy loans and being proactive on recovery we will protect our long-term financial health and demonstrate that these are isolated events.

The cost-of living crisis and higher interest rates have put pressure on customer affordability. As a responsible lender, we have continued to support our customers during these difficult times. In Property we enabled customers to fix in rates earlier in the lending process to give peace of mind and in Omni we continued to provide the majority of our loans via interest free credit and where we provide interest-bearing loans continued to complete rigorous affordability checks on all customers. In Savings, where possible, we passed on higher interest rate rises to our customers and this has shone through in our latest strong NPS scores.

In short, we were able to look after our customers and deliver a strong business performance. Our continued investment in digital capabilities mean that we are now well placed to benefit from enhanced products, pricing and scalable capabilities across our product ranges.