Before sharing a review of our business performance, I want to acknowledge the impact Coronavirus has had on us all, the sadness for many in the loss of loved ones and for the uncertainty that we still face in the coming months.
Last year was a difficult and challenging year for many, and I want to take a moment to thank you, our members, for your support throughout 2020, and indeed into 2021.
Despite the challenges of 2020, your Society delivered a strong performance, having achieved the key objectives set for it before we became aware of the pandemic. This is a remarkable achievement and one that I am extremely proud of.
We saw further growth in our mortgage and savings activity, and once again achieved our objective to grow the Society by continuing to attract and retain members through competitive products and excellent service. Over the course of the year, we welcomed 1,158 new saving members and 1,268 new borrowing members.
Once again, we increased our size, taking the balance sheet to £638m, an increase of 11%, aligned to our overall strategy to increase scale to support continued investment.
Our profitability has continued to strengthen, in line with planned projections and unaffected by the pandemic. Our profit after tax was stable at £1.883m (2019: £1.843m), continuing the trend of improving profitability over the last 5 years, and we once again added to our reserves. Our net interest income increased as a result of higher lending volumes, despite a dip in our net interest margin to 1.59% (2019: 1.65%).
We recognise that for many, the pandemic has had an impact on household finances, with concerns around furlough and unemployment. Like other providers, we introduced mortgage payment deferrals to support our borrowers, which, in total, saw approximately 7% of mortgage holders making use of this service.
We see the need for continued support for our members as family finances come under strain following the removal of the Government support schemes. We have invested in our mortgage teams to enable the Society to support an increased number of borrowers should their circumstances change.
We were also faced with the difficult decision to reduce savings rates in response to the cut in the Bank of England base rate. Despite the changes, we saw savings balances increase; a reflection of how our members are determined to improve their financial resilience and increase their personal savings.
The outlook for 2021
We expect the challenges surrounding economic recovery and the pandemic to be part of our future plans for many years to come, but whatever the future holds, we will be here for our colleagues and for our members.
We have set a clear purpose to provide a trusted home for our members’ money, to support their financial wellbeing and help them reach their financial goals in life. Our financial strength and the careful management of the Society means we will continue to be there through the financial challenges that may lie ahead. In facing the future together, we do so with strong capital and liquidity resources and with a determined and talented team.