Principality profits take plunge

Profits at Wales' biggest building society the Principality have halved over the past year.

But the lender said its performance compares favourably with other building societies across the UK.

Pre-tax profits are �8.4m - which is half what they were this time last year.

It has blamed difficult times at its estate agency Peter Alan, where business is down dramatically, as well as its secured loans business Nemo.

The building society has described its performance as solid during a period of uncertainty for the financial services sector.

Peter Griffiths, the group chief executive of Principality, said: "The first half of 2008 has been a period of considerable turbulence and uncertainty for the financial services sector. "

The society says there have been record levels of savings and new customers.

It also stresses that nearly 90% of its mortgages are funded internally, reducing its exposure to risk on the wholesale money markets.

The society says its retail savings balances have increased by �446.7m to �4,251m and its assets have gone up by �427m to �6,289.5m.

The Principality also says its group arrears are better than the industry average.

The Principality has 50 branches and employs more than 600 staff across Wales and the borders, with its headquarters in Cardiff.

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