Page 11 - 86395_CCB - 2024 Annual Report (web)

11

The Bank is focused on becoming
the “Specialist SME Bank of Choice”.
To achieve this the Bank has set
itself a number of goals building on
Specialist SME
its core foundations: Bank of Choice

Growing Number of Improved
Satisfied Customers Shareholder Returns

Excellent Sustainable Reduced Cost
Customer Service Growth to Income Ratio

Capital to Growth of Diverse Improved
Sustain Growth Broker Network Funding Base Efficiency

Environmental, Social Front Line BI and Data Customer Journey People and
and Governance Recruitment Governance Transformation Culture

Robust Risk Management Strong Broker Relationships Established Manual
and Enabling Functions and Reputation Underwriting Capacity

a 39% uplift on last year, which was a materially reduces the stock of stage 3
record. Property finance drawdowns at over exposures within the portfolio. In addition,
£287m represented the third consecutive we have adequate coverage from a
year of growth in line with our strategic balance sheet perspective (1.7% loan loss
ambition. Repayments moderated slightly provision coverage) and believe we are well
in year with £256m repaid, compared to positioned should further stress emerge in a
£283m the prior year as customers became recovering market.
accustomed to the elevated base rate We continued to fund ourselves in
environment. Our balance sheet ended with a satisfactory manner with the bulk of
Gross Loans and Advances at £1.2 billion our deposits continuing to come from
a 26% increase in the three years of the customers with whom we interact directly,
strategic plan. with c20% of our book from deposit
Margins for new business remained aggregator sites. Our mantra of offering
competitive and base rate began its existing customers as attractive rates as
expected downward trajectory which led to new customers has seen continued high
interest receivable increasing more slowly reinvestment rates at over 65% on our
than asset growth with income growing by fixed term products. Our strategy to hold
11% to £128m (2023: £116m). We expect robust levels of liquidity is reflected in an
further pressure on income growth to LCR in excess of 500% (2023: 718%), and a
be a feature in 2025 as the forecast base 95% LDR (2023: 94%), without any reliance
rate reductions will impact sooner than a on wholesale funding, enabling the Bank
repricing of our fixed term deposit products. to maintain a consistently strong liquidity
Net interest margin reduced to 4.9% from position throughout the year.
5.4% as these elements emerged. Our cost
base, whilst reflecting inflationary increases, Supporting our customers
continues to be well managed and we are We recognise the continued challenging
pleased with the cost: income ratio of 45% economic conditions and the increased
reflecting consistent cost discipline and cost burden on business resulting from
strong income performance. increases in the tax burden and continue
The challenging conditions faced by
some of our customers in the current to monitor closely the potential impact
on our customers. We remain focused on
environment is reflected in the impairment supporting those customers who have short
provision charge of £4.9m (2023: £7.3m). term pressures with a dedicated team of
This largely reflects the resolution of a experienced bankers offering additional
number of legacy distressed positions and
support where needed.