Newcastle Building Society's profit up 52 per cent

Newcastle Building Society has reported a 52 per cent jump in profit before tax for the year ending December 31st 2007, bucking the trend for profit decline across the banking sector.

The building society said its £17.6 million in profit before tax was based on the December merger with the Universal Building Society which brought cost efficiencies and new customers.

New lending was also up, providing a boost to earnings, with gross lending exceeding £1 billion for the first time.

The north-east-based group also said its Solutions business performed well and now manages over £10 billion in savings accounts alone on behalf of major financial institutions.

Meanwhile, Newcastle Financial Services nearly doubled the volume of business compared with 2006.

Significantly, the building society had no exposure to the US sub-prime market, which has caused major dents in profits for rival UK financial institutions.

Chief executive Colin Seccombe said: "Despite market turbulence in the second half of the year, the group has shown real progress in all parts of its business, both the traditional member-based savings and lending activity, as well as the innovative Solutions divisions."

Newcastle Building Society also created over 200 additional staff positions in 2007 and plans to create a further 500 jobs over the next five years as it expands its services.