Final Results

RNS Number:3906Q
Portman Building Society
31 January 2007



PORTMAN BUILDING SOCIETY
PRESS RELEASE
For Immediate Release
31 January 2007



               PORTMAN ANNOUNCES OUTSTANDING 2006 ANNUAL RESULTS
                       - TOTAL ASSETS INCREASED BY 20% -



Portman Building Society today announces its annual results for 2006, revealing
an outstanding year for members, with exceptional growth in assets, profit,
residential lending and savings balances.

In 2006, Portman Building Society achieved outstanding growth in assets, profits
and new customers.


Key achievements:

*         Total assets increased by 20% to over #21 billion;

*         Record profit before tax of #93.7 million, #104.6 million underlying;

*         10th consecutive year of profit growth;

*         New residential lending up 18% to #5 billion;

*         Savings balances up 18% to over #13 billion;

*         Some 70,000 new customers attracted to the Society, up 20%;

*         Completion of the merger with Lambeth Building Society; and

*         Announcement of a proposed merger with Nationwide Building Society.



Commenting on the Group's performance, Portman Chief Executive Robert Sharpe
said: "2006 has been a year of outstanding success. Total assets increased by an
impressive 20% to #21.3 billion, whilst profits grew to record levels. In
addition, we completed a merger with Lambeth Building Society, consolidating our
position as the third largest building society in the UK. At the same time, we
offered competitively priced products and maintained high levels of customer
service and satisfaction, resulting in an exceptional year for attracting new
customers.


"2006 represents Portman's 10th successive year of profit growth, with
underlying pre-tax profit reaching a record #104.6 million, up 23% on 2005. The
Group's specialist lending subsidiary, The Mortgage Works, delivered record
pre-tax profit of #32.5 million, representing over 30% of the Group's underlying
pre-tax profit. The profits generated by this non-member specialist lending
subsidiary enhance the Society's ability to deliver the benefits of mutuality to
members through attractive product pricing.


"The Society has recorded exceptional growth in both residential lending, with
gross advances up 18% on the previous 2005 record, and retail savings, with
balances up an outstanding 18% to #13.4 billion.


"We have also clearly answered those in the sector who have repeatedly
questioned Portman's ability to generate profitable and aggressive growth. Our
strategy of ensuring sufficient scale to accommodate a consistently attractive
customer proposition has been an undoubted success.


"The achievements of 2006 are a continuation of Portman's outstanding
track-record. Over the last five years the Society has achieved average annual
growth of:


*         19% in total assets, with assets doubling in size since 2002;

*         15% in savings balances;

*         20% in residential mortgages; and

*         12% in underlying profit before tax.



"In September 2006, the Portman Board announced its decision to recommend to
members a merger with Nationwide Building Society, which, if approved by Portman
members at the Annual General Meeting on 23 April and confirmed by the Financial
Services Authority, will be the largest building society merger ever undertaken,
with a substantial distribution of reserves to qualifying Portman members. Once
the two organisations have been integrated, the substantial economies of scale
which the Portman Board expects to be achieved will support attractive product
pricing for members, who will also have access to a wider range of distribution
channels, including a greatly expanded branch network.


"2007 will be a challenging year for the Society, as we maintain our commitment
to meeting the needs of members by delivering attractive products and excellent
service, whilst carrying out the extensive planning and integration activity
required to complete the proposed merger with Nationwide Building Society. I am
confident that the Portman Group will rise to the challenge of ensuring that the
merger, if approved, proceeds smoothly.", Sharpe concluded.


Business highlights:


Mortgages

Supported by the unexpectedly buoyant housing market in 2006 and driven by
market-leading pricing and innovative product design, gross mortgage lending
increased 18% on 2005, reaching #5 billion. Residential mortgage balances
increased by 19% to #16.1 billion. Portman was recognised for the quality of its
mortgage offering through a number of industry awards.


Savings

Despite an intensely competitive retail savings market, the Society recorded an
excellent performance, with savings balances growing 18% to #13.4 billion.   The
highly competitive 15 day notice ISA and niche accounts, such as the age 50 plus
fixed interest bond and the age 60 plus income bond, helped to attract new
customers and benefited existing account holders. During the year, over 23,000
Portman members opened a Members' Loyalty account, which offered a three year
guaranteed link to the Bank of England base rate.


The Mortgage Works

The Mortgage Works continued to strengthen its position in the buy-to-let and
non-prime mortgage markets, with mortgage balances exceeding #4 billion at the
end of 2006. The pre-tax profit contributed by the specialist lending subsidiary
was up 30% on 2005, at #32.5 million. Since it was acquired by Portman in 2001,
The Mortgage Works has achieved average profit growth of 24% per annum.



                                     -ENDS-



Editor's notes:



*    The 2006 Annual Results, which have been prepared under International
     Financial Reporting Standards (IFRS), accompany this press release. 
     To access, click or copy the following link into your web browser.


     http://www.rns-pdf.londonstockexchange.com/rns/3906q_-2007-1-30.pdf
     



*    Portman Group consists of:

i.   Portman Building Society is the third largest UK building society and 13th
     largest UK mortgage lender. In the period 2000 to 2005, Portman was the
     fastest growing top ten building society in terms of total assets. The 
     Group has total assets of over #21 billion and employs over 2,500 staff, 
     serving 1.8 million members. Portman has a network of 149 branches. Its 
     Head Office is in Bournemouth and it has an administration centre in 
     Wolverhampton.


ii.  The Mortgage Works (UK) plc is a specialist mortgage lender which has been
     operating in the UK mortgage market for the last 16 years. Its product
     range, available through brokers, includes self-certification, buy-to-let
     and sub-prime.


iii. Portman Channel Islands Ltd is based in the Bailiwick of Guernsey and, as
     the offshore deposit taking subsidiary of Portman Building Society, offers 
     a safe home for its investors' money together with friendly and efficient
     service.

Further comment from the Society's Executive Team on the annual results can be
arranged by contacting the Press Office. A selection of photographs is also
available.

Readers requiring further information about any of the products or services
offered by the Portman Group should visit their local branch of Portman or call
0845 60 90 600 for details. Information can also be found by logging onto
www.portman.co.uk


Journalists requiring further information please contact:

Nicki Green
Press Officer
01202 562256




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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