The EBS Building Society today announced a reduced surplus of €56.1m for 2004, down 10% from €62.6m in 2003 after significantly increasing its mutuality dividend. The ESB said the dividend to members rose by 141% to €20.5m from €8.5m in 2003.
The building society said its customer savings and deposit inflows jumped by 176%, new lending rose by 26% while its overall savings portfolio was up 24% and the loan portfolio increased by 20%.
EBS said the increase in the mutuality dividend came about as a result of lower mortgage rates, better savings rates and lower transactions costs for members.
Meanwhile the EBS says it's going to start selling through brokers for the first time, a sales channel it has heretofore shunned.
Speaking tonight on RTE radio CEO Ted McGovern said that ESB will be making a proposition in the next few months on selling through brokers. He said that the broker market is a big one and he feels the time is right to enter it.
He said that the company will be split into membership and non-membership, which will include the broker business. Income earned from the non-membership side will be ploughed back into the business to add more value for the members.
Gross lending last year increased by 26% to €3.1 billion and the overall loan book was up 20% to €10.2 billion. Customer savings and deposit inflows were up 176% to €1.4 billion while the overall portfolio was up 24% to €7.3 billion.
'Our unique commitment to mutuality now sets up apart from all other financial institutions in Ireland', commented CEO Ted McGovern.
'We are not a bank and therefore we are not in the business of maximising profits in the short term. Instead we believe in optimising our surplus, which is a totally different approach,' he said.
He said that based on feedback from EBS members, the building society's mutual strategy is working well. 'We are delivering value to them through more competitive products and services while achieving a level of surplus which ensures the financial security of the society and allows us to invest in its future development,' he added.
Mr McGovern also pointed to the EBS strategy of applying the same lending rate for the same product to all its members whether existing or new, while other lenders tend to price for new business at the expense of existing customers.
