Page 23 - CCB_Full-Annual-Report-2021

22 Strategic Report 23

Contents
Contents

Financial Performance

Macroeconomics Prudential framework Financial review ∞ The Bank continues to maintain a strong Strategic Report
The Bank’s liquidity and capital position. At the end
In 2021 the UK economy saw a strong bounce The prudential framework has remained primary Despite the uncertain economic of December 2021, the Bank held liquid
back from the greatest contraction in GDP in relatively unchanged during 2021. The financial environment, the Bank has delivered a assets of over £289m with an LCR of
modern history recorded in 2020. The fiscal implementation of CRRII takes place from statements are strong financial performance in 2021: 287%, significantly above the regulatory
and financial initiatives to limit the potential the 1 January 2022, with the key change reported on requirement of 100%. The Bank’s total
permanent damage of the national lockdowns from the Bank’s perspective being the pages 86 – 89 ∞ Net Interest income increased by £7m capital ratio was 23.0% at the end of
look to be working, with unemployment implementation of the Net Stable Funding compared to the prior period as a result December with a CET1 ratio of 19.9%.
remaining low despite the end of the Ratio (NSFR) ratio with a regulatory of the growth in customer loans and The Bank’s leverage ratio was 12.8%,
Government furlough arrangements. requirement of 100%. advances and a lower cost of deposits.
Whilst pricing in both the lending and significantly above the regulatory limit
The Bank of England increased bank base rate The improved outlook for the UK economy deposit markets remains competitive, of 3.25%. Corporate Governance Statement
by 0.15% to 0.25% in December 2021, the first in 2022 is reflected in the announcement the Bank delivered a NIM of 3.8% ∞ The Board are committed to continuing
increase in rates in over three years. Further by the FPC that the Counter Cyclical Buffer (2020: 3.7%) and maintained a strong to support our customers and the SME
rate increases are expected during 2022 as (CCyB) would increase to 1% in December liquidity position with an LDR of 95% and market through the recovery. The Board
the Monetary Policy Committee seeks to 2022 and anticipating continued UK reported an LCR of 287% at the year end.
are planning for continued growth in the
control UK inflation within its target range. economic recovery broadly in line with the Bank’s balance sheet as well as ongoing
MPC’s central projections in the November ∞ Whilst the economic conditions in 2021
The Bank continues to take a cautious Monetary Policy Report and absent a were less favourable than those in recent investment in its people and systems.
outlook on the economy, with the medium- material change in the outlook for UK years they were better than many had The Bank’s performance is presented on a
term impact of Covid 19 on customers and financial stability, the CCyB rate will to be anticipated, and this enabled the Bank’s statutory basis and structured consistently
the wider economy still uncertain. increased to 2% in 2023. impairment loss charge to reduce from
£5.8m in 2020 to £3.5m in 2021. Balance with the key elements of the business
sheet provisions increased from £12.5m model explained on pages 6 - 7. The 2021
to £14.8m reflecting the growth in loan financial statements have been prepared
balances, maintaining an impairment under International Financial Reporting Independent Auditor’s Report
coverage ratio of 1.5% (2020: 1.5%). Standards (IFRS). The Bank’s primary
financial statements are reported on pages
86 - 89, with a summary of these shown
∞ Recognising that the Bank’s people
are its key differentiator in achieving its below. There have been no changes in the
service levels and customer support, Bank’s accounting policies in 2021.
the Board maintained their commitment
to invest in infrastructure, capacity,
and capability to ensure that the Bank
continues to develop the skills and
expertise it needs to support both the 2021
current business demands and future Financial Statements
growth aspirations. The average number ROCE
of employees increased by 11% to 183
during the year. Despite the continued increased from
investment in the business, the Bank
reduced the cost income ratio from %
55.6% in 2020 to 51.0% in 2021. 6.4

∞ Despite the challenging conditions to
the Board are pleased with the Bank’s
performance delivering a post-tax profit 9.5%
of £15.5m (2020: £9.4m) and ROE of
9.5% (2020: 6.4%). Notes to the Financial Statements