Building Societies Database 2005 FINANCIAL SERVICES

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1 Building Societies Database 2005 FINANCIAL SERVICES

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3 Building Societies Database KPMG s Building Societies Database 2005 I am pleased to introduce the fifteenth edition of KPMG s annual Building Societies Database. Database summarises, in a series of tables of statistics, ratios and rankings, the financial performance of all the current UK building societies. If readers would like to know more about the wider services which KPMG provides to the retail financial sector, please contact me in Leeds at the address below. Richard Gabbertas Partner, KPMG s Financial Services practice September 2005 KPMG LLP 1 The Embankment Neville Street LEEDS LS1 4DW Tel: Fax:

4 2 Building Societies Database Introduction Introduction KPMG s Building Societies Database 2005 covers financial information relating to all the building societies in the United Kingdom. All data for building societies has been extracted from published sources, being primarily the latest financial statements of the societies for financial year ends between August 2004 and April Numbers for branches, borrowing members and investing members are as published in the Building Societies Association Yearbook 2004/2005. Number of societies Database 2005 comprises 63 societies. There have been no building society mergers since December 2003 and thus no change in the total number of societies since Database Total sector group and society assets In Database 2005 the 63 societies held total group assets of billion, compared to Database 2004 total group assets of billion. Total group assets have increased by 22.5 billion, which is an increase of 10.0 percent. Total sector asset movements are analysed as follows: Group bn Society bn Database 2004 total assets Growth in year Database 2005 total assets Sector asset growth 2004 to % 9.7% Prior year sector asset growth 14.6% 14.5% to 2004 Of the 2005 total asset growth, 10 billion has come from Nationwide (2004: 16 billion) which, at billion, comprises 45 percent of total building society group assets in Database 2005 (Database percent). Asset groupings The 63 building societies are grouped into three peer groups, based on asset size and ranked within each peer group. Note that three societies, Cumberland, Lambeth and Kent Reliance, have moved from Peer Group 2 to Peer Group 1, as a result of their total assets exceeding 1 billion for the first time. In addition, four societies, being Dudley, Vernon, Loughborough and Scottish, have moved from Peer Group 3 to Peer Group 2 as a result of their total assets exceeding 200 million for the first time.

5 Building Societies Database Introduction 3 Total Assets analyses We provide below a table showing the percent increases in total assets from Database 2004, by Peer Groups. Note that the Database 2004 Total Assets have been adjusted for societies moving between Peer Groups. Database 2005: Analysis of Total Assets growth by Peer Groups Group Total Assets Society Total Assets Society Database Database Growth % Database Database Growth % numbers 2005 m 2004 m 2005 m 2004 m PG , , % 231, , % PG , , % 10, , % PG , , % 1, , % Total , , % 243, , % Total Profits analyses We also provide an analysis of total profits percent increase from Database 2004 by Peer Groups. Note again that the Database 2004 Total Profits have been adjusted for societies moving between Peer Groups. Note also that society profits can be distorted by dividends and other income from subsidiary undertakings. The negative profit growth in Peer Group 2 is the result of significant decreases in profits at a number of societies see the Peer Group Tables. Database 2005: Analysis of Total Profits growth by Peer Groups Group Profits for Year Society Profits for Year Society Database Database Growth % Database Database Growth % numbers 2005 m 2004 m 2005 m 2004 m PG , , %) 595, , %) PG ,620 34,917 (0.85%) 33,846 34,584 (2.13%) PG ,525 6, %) 6,498 6, %) Total , , %) 635, , %)

6 4 Building Societies Database Introduction Group versus society data As in recent years, users of Database need to be aware that some tables analyse group data, whereas a number are society only data. Each table makes this clear at the top of the relevant sections. Note in particular that in the second table, entitled Group Profitability, Reserves and Capital, the information is all group, except when a society does not have any subsidiary undertakings and, therefore, the reserves and capital data is for the society only. Bases of the ratios The detailed bases for all data, statistics and ratios continue to be set out in the Explanations section at the back of Database. Changes to the Tables for Database 2005 There are only two minor format changes from Database The first relates to the FRS17 data in the Table Society Staff ratios, Pension Costs and Group FRS17 Issues. We have added a new column showing which societies have adopted FRS17, Retirement Benefits early, and the year of their doing so. For these societies, group General Reserves are grossed up for the total Scheme deficit before expressing that Deficit as a percentage of such General Reserves. The second change is a minor change to the averages in the last table, being Society Loans and Advances (2): Provisions. We have now disclosed a Peer Group Ratio for total general mortgage loss provisions to total specific mortgage loss provisions. Previously Database disclosed the average of this ratio for each Peer Group society, which resulted in some large and unrepresentative ratios. We believe that the new basis is more meaningful. Users should note, however, that the bases of the other Averages on this table are unchanged. Exceptional costs and income To help facilitate comparisons between societies, Database does not include, in the Group or Society profitability ratios, any exceptional costs or income shown separately on the face of the Income and Expenditure Account. However, any such items identified within Notes to the Accounts are included within the relevant Database ratio calculation. The Group and Society profits for the year, being the first column in the second and third tables are all the bottom line profits for the year: i.e., after all charges and income of whatever nature and taxation. Contacts for further information For further information on any aspects of Database 2005 please contact Richard Gabbertas, Partner, or Paul Boothroyd, Senior Manager, at KPMG s Financial Services practice in Leeds. Responsibility Whilst reasonable steps have been taken to help ensure the accuracy of the information contained in Database, KPMG LLP accept no responsibility for any errors contained therein and there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.

7 Building Societies Database Sector Commentary 5 Sector Commentary A good five years for Building Societies It is now almost five years since the last demutualisation by a building society; the conversion of Bradford & Bingley Building Society into a plc in December 2000 signalled the end of a difficult few years for building societies, following the demutualisations of the larger societies and attacks by carpetbaggers on other societies. The last five years have been good for building societies and, although there was much talk of the number of societies falling dramatically, the sector has contracted by only six societies (five mergers and one conversion) over the last five years. Since 2000 building societies have broadly maintained their market share of both mortgage balances outstanding and retail savings balances. The smaller societies also remain in good shape, recording on average much stronger profit growth than the larger society peer group. This is largely as a result of smaller societies reducing their management expense ratios faster than their net interest margins have fallen (16 percent on average and 11 percent on average respectively). By contrast larger societies have been able to drive their cost ratios down by 17 percent over five years, but have reduced their margins by 25 percent over the same period. In our opinion this variation in margin illustrates the difference in approach between larger and smaller societies. Larger societies have been competing against mortgage banks and retail banks with increasing direct distribution capability, and also against intermediary focused specialist mortgage lenders who have been seeking to build up market share. These three factors, direct distribution, intermediary focus and competition for market share, have contributed to a sustained period of intense price based competition. Smaller societies, in contrast, have generally accepted slower asset growth, and have continued to focus on serving the needs of local communities via their branch and agency networks. Societies have always been conservative in their approach to capital management and have carried far greater reserves than the statutory minimum and those typically held by banks. The last five years have seen a modest decline of just 24 basis points in average gross capital ratios of the larger societies, still leaving them very comfortably capitalized by current regulatory requirements and with substantial surplus capital compared to the anticipated requirements of Basel II. Making effective use of that surplus capital in the post Basel II world is probably one of the building society sector s greatest challenges, as competition in the mortgage market from capital effective lenders is likely to increase post Basel II.

8 6 Building Societies Database Sector Commentary Niche lending opportunities such as buy to let, equity release and shared ownership are on many agendas, either for development or as a watching brief. Societies may inevitably be tempted to increase their rate of diversification possibly into various forms of more capital intensive commercial lending and possibly asset finance, though still of course constrained by their statutory nature limits. One characteristic feature of the last five years has been the steady rise in wholesale funding of building societies, as retail savings have become more expensive and harder to raise and sustain, again due to price based competition from new entrants. Amongst the largest societies, wholesale funding has risen by 18 percent over the last five years with an increasing number of societies turning to securitisation to fund mortgages and commercial loans. Societies may add covered bonds to their fund raising techniques in the next 12 months, providing a further method of cost effectively tapping the wholesale market. Wholesale funding is one of the areas of most marked contrast between large and smaller societies. Smaller societies seem to have had less need for wholesale funding, with on average less than a third of the level of large societies wholesale funding. Cost and other constraints mean that they also have reduced access to techniques such as securitisation, which are effectively only available for larger societies. The smaller societies, with higher average balances per branch than their larger counterparts, seem to be more effective at tapping into the needs of particular areas of the savings market. In recent years there has been a great deal of discussion about the potential for economies of scale, particularly in the context of potential mergers. However, a review of the information in Database may suggest that for societies operating similar business models there is little to indicate that economies of scale exist beyond 6 billion of gross assets. Smaller societies, with a strong cost focus, running a multi-branch model, can still achieve management expense ratios similar to the top societies, even with asset bases below 2 billion. This finding is supported by KPMG s detailed cost benchmarking studies, which have been running now for more than a decade. These suggest that management focus, approach to IT and location in a low cost area can be more significant factors in determining operating cost base than pure size. Our research suggests that in general, economy of scale by itself is not necessarily a viable justification for a merger. Going forward, societies can expect continuing competition as there appears to be a steady stream of potential new entrants to the mortgage market, primarily investment banks with an intermediary focused, and consequently price led, business model. A number of societies have included diversification in their strategic plans for the next three to five years. Niche lending opportunities such as buy to let, equity release and shared ownership are on many agendas, either for development or as a watching brief. Finally, financial services outsourcing and bureau providers are actively looking for ways to support societies (and other lenders) both in reducing their fixed cost base and developing new products and distribution. Developments in this area of the market may speed up the rate of innovation in the traditional building society sector. Simon Walker Partner, KPMG s Financial Services practice

9 Database Tables

10 8 Building Societies Database Database Tables Peer Group 1 Balance Sheet, Members and Branches Asset Society Year End Group Group Society Society Number of Average Balance Funding Limit Liquid Assets Society Total Society Society Society ranking Total Assets Asset Growth Total Assets Asset Growth Society per Shareholder ratio Branches Assets per Branch Shareholders Borrowers Shareholders per Branch per Branch '000 % Rank '000 % Rank % % Number '000 1 Nationwide Apr ,591, % ,037, % 18 n/a n/a 28.60% 14.90% ,645 n/a n/a 2 Britannia Dec ,297, % 11 23,230, % 12 2,003,589 5, % 31.40% ,567 10,657 1,519 3 Portman Dec ,504, % 16 15,511, % 16 n/a n/a 25.85% 24.30% ,746 n/a Yorkshire Dec ,033, % 20 14,944, % 22 1,586,986 6, % 25.64% ,083 12,114 2,074 5 Coventry Dec 2004 n/a n/a n/a 9,442, % ,653 8, % 18.29% ,712 16,054 2,246 6 Chelsea Dec ,867, % 7 8,842, % 7 497,000 13, % 24.00% ,649 14,200 2,364 7 Skipton Dec ,137, % 12 7,870, % ,000 9, % 25.99% 80 98,375 5, Leeds & HolbeckDec ,128, % 4 6,147, % 4 540,000 7, % 20.70% ,983 9,310 2,069 9 West Bromwich Mar ,640, % 10 5,637, % ,361 6, % 19.14% ,537 10, Derbyshire Dec ,406, % 8 4,396, % 9 380,555 6, % 25.48% 52 84,557 7, Cheshire Dec ,377, % 18 4,372, % ,000 6, % 22.69% 51 85,741 7,843 1, Principality Dec ,051, % 6 4,047, % 6 356,367 8, % 20.30% 50 80,956 7,127 1, Newcastle Dec ,273, % 19 3,271, % ,936 5, % 18.72% 52 62,910 7,191 1, Norwich & Peterborough Dec ,258, % 3 3,262, % 3 308,000 6, % 24.12% 58 56,247 5, Stroud & Swindon Dec ,306, % 14 2,289, % ,000 8, % 21.75% ,072 8,636 1, Nottingham Dec ,190, % 5 2,188, % 5 175,046 9, % 16.83% 33 66,329 5,304 1, Dunfermline Dec ,045, % 17 2,046, % ,000 5, % 18.70% 33 62,001 8,818 1, Scarborough Apr ,610, % 9 1,609, % ,814 7, % 20.19% 9 178,868 16,757 1, Progressive Dec 2004 n/a n/a n/a 1,141, % 8 101,130 9, % 21.98% ,809 9,194 1, Cumberland Mar ,094, % 13 1,096, % ,000 5, % 18.04% 34 32,247 4, Lambeth Jan ,081, % 2 1,076, % 2 72,280 9, % 25.23% ,691 7,228 1, Kent Reliance Sep ,030, % 1 1,030, % 1 93,927 7, % 22.34% 11 93,655 8, Total Peer Gp Total Peer Gp 235,514, ,495,342 Average of Peer Group Societies 12.07% 11.72% 7, % 21.85% 109,790 9,161 1,323

11 Building Societies Database Database Tables 9 Peer Group 1 Group Profitability Ratios Group Reserves and Capital Asset Society Year End ranking Group Profit Growth Group/Society Profit Group Net Group Cost / Group ManEx / Mean Assets (Group ManEx PIBS Subordinated General Revaluation Total Reserves/ Gross Free for Year for Year/Mean Assets Interest Margin Income Ratio Other Income) Debt Reserve Reserve Total Assets Capital Capital / Mean Assets / Mean Assets '000 % % % % % Rank% '000 '000 '000 '000 % % % 1 Nationwide Apr Britannia Dec Portman Dec Yorkshire Dec Coventry Dec Chelsea Dec Skipton Dec Leeds & HolbeckDec West Bromwich Mar Derbyshire Dec Cheshire Dec Principality Dec Newcastle Dec Norwich & Peterborough Dec Stroud & Swindon Dec Nottingham Dec Dunfermline Dec Scarborough Apr Progressive Dec Cumberland Mar Lambeth Jan Kent Reliance Sep , % 0.34% 1.12% 59.91% 0.86% % 692,200 1,439,800 4,710, , % 7.00% 6.20% 71, % 0.32% 0.94% 55.70% 0.84% % 110, ,700 1,163, % 8.10% 7.50% 55, % 0.37% 1.02% 59.16% 0.77% % 185, , , % 6.40% 5.81% 53, % 0.36% 0.97% 58.09% 0.71% % 0 100, , % 6.67% 6.05% n/a n/a 0.38% n/a n/a n/a n/a n/a 40,000 64, , % 6.12% 6.05% 31, % 0.38% 1.09% 53.26% 0.64% % 0 100, ,600 22, % 5.80% 5.10% 53, % 0.70% 1.18% 80.48% 4.36% % 25, , , % 8.16% 6.13% 29, % 0.51% 1.07% 47.13% 0.67% % 25, ,100 13, % 5.90% 5.80% 23, % 0.43% 1.02% 56.30% 0.80% % 0 107, ,300 24, % 7.24% 5.37% 10, % 0.25% 1.16% 76.33% 1.03% % 0 100, , % 7.54% 6.92% 7, % 0.18% 0.90% 79.64% 0.96% % 39,400 64, ,100 4, % 6.95% 6.20% 12, % 0.34% 1.31% 70.26% 1.21% % 58, , % 7.19% 6.34% 12, % 0.38% 1.10% 63.92% 0.90% % 19,900 49, , % 8.05% 7.17% 8, % 0.27% 1.34% 79.48% 1.61% % 0 30, ,600 1, % 6.74% 5.95% 8, % 0.41% 1.20% 59.94% 0.80% % 0 42,000 91, % 6.16% 5.54% 6, % 0.31% 1.00% 67.53% 0.94% % 24, , % 7.20% 6.93% 4, % 0.20% 1.33% 77.95% 1.28% % , % 5.90% 4.70% 3, % 0.23% 0.92% 75.13% 1.00% % 14,627 14,888 53, % 5.52% 4.23% n/a n/a 0.38% n/a n/a n/a n/a n/a ,014 2, % 5.44% 4.69% 5, % 0.50% 1.56% 63.30% 1.28% % , % 7.92% 7.35% 2, % 0.21% 0.99% 73.12% 0.81% % , % 8.00% 8.01% 1, % 0.19% 1.11% 81.07% 0.89% % 14,643 20,000 31, % 6.88% 6.56% Average of Peer Group Societies 3.80% 0.35% 1.12% 66.89% 1.12% 0.61% 4.98% 6.86% 6.12%

12 10 Building Societies Database Database Tables Peer Group 1 Society Profitability Ratios Asset Society Year End ranking Society Profit Growth Net Interest Interest Interest Interest Other Income Cost/Income Provision Charge/ Total ManEx ManEx / Mean Assets ManEx - for Year Margin / Mean Receivable / Payable / Spread for & Charges / Ratio (Credit) for Year Other Income / Assets Mean FSRP Mean Shares Members Total Income / Profit pre- Mean Assets '000 % % % % % % % Provision % '000 % Rank% 1 Nationwide Apr Britannia Dec Portman Dec Yorkshire Dec Coventry Dec Chelsea Dec Skipton Dec Leeds & HolbeckDec West Bromwich Mar Derbyshire Dec Cheshire Dec Principality Dec Newcastle Dec Norwich & Peterborough Dec Stroud & Swindon Dec Nottingham Dec Dunfermline Dec Scarborough Apr Progressive Dec Cumberland Mar Lambeth Jan Kent Reliance Sep , % 0.97% 5.15% 4.00% 1.15% 21.17% 69.06% 8.15% 879, % % 34, % 0.75% 4.20% 3.66% 0.54% 27.00% 65.78% -0.78% 148, % % 48, % 0.81% 5.03% 3.80% 1.23% 27.20% 61.71% -9.39% 101, % % 48, % 0.87% 5.01% 3.85% 1.16% 27.28% 59.87% -3.13% 104, % % 35, % 0.95% 5.15% 4.01% 1.14% 18.00% 51.84% -9.78% 55, % % 29, % 1.06% 5.46% 4.19% 1.27% 16.10% 55.10% 1.18% 52, % % 37, % 0.76% 4.98% 4.04% 0.94% 39.72% 50.00% -4.87% 47, % % 51, % 1.07% 5.26% 4.05% 1.21% 38.91% 35.72% 2.48% 35, % % 18, % 0.96% 5.40% 4.39% 1.01% 24.22% 59.97% -7.01% 40, % % 8, % 0.92% 5.17% 3.75% 1.42% 23.94% 80.92% -7.78% 40, % % 5, % 0.84% 5.31% 3.96% 1.35% 24.03% 84.20% % 38, % % 13, % 1.30% 5.32% 3.93% 1.39% 13.41% 65.68% 3.55% 37, % % 9, % 1.10% 5.11% 5.72% -0.61% 14.91% 67.97% -8.40% 27, % % 7, % 1.33% 5.31% 3.96% 1.35% 24.44% 78.92% 5.31% 42, % % 6, % 0.80% 5.10% 4.20% 0.90% 30.44% 67.67% -1.70% 16, % % 5, % 1.00% 5.08% 4.03% 1.05% 17.32% 65.65% -1.26% 16, % % 4, % 1.29% 5.51% 4.16% 1.35% 19.21% 76.55% 2.64% 23, % % 3, % 0.76% 5.50% 4.43% 1.07% 21.70% 68.60% -1.19% 10, % % 4, % 1.11% 5.18% 4.00% 1.18% 9.73% 58.49% -5.14% 7, % % 5, % 1.56% 5.25% 3.84% 1.41% 16.56% 60.93% 3.61% 11, % % 1, % 0.88% 5.48% 4.21% 1.27% 11.16% 81.51% -3.49% 7, % % 1, % 1.05% 5.20% 3.70% 1.50% -0.81% 84.57% -7.53% 8, % % Average of Peer Group Societies 2.31% 1.01% 5.19% 4.08% 1.10% 21.17% 65.94% -3.02% 0.83% 0.56%

13 Building Societies Database Database Tables 11 Peer Group 1 Society Staff Ratios, Pension Costs and Group FRS17 Issues Asset Society Year End ranking Society staff costs Society pension costs Group FRS17 disclosures Total Total Staff Costs Profit for Year Total Assets Total wages Other Pension Defined FRS17 Group FRS17 (Deficit) / Surplus Key FRS17 assumptions Number Staff per Staff per Staff per Staff and salaries pension costs / Benefit adopted After SSAP24 Total (def) / surp Salary Discount Inflation of Staff Costs Member Member costs TW&S Scheme? early? def. tax (prep) / acc % of Gen increase rate rate '000 '000 / staff '000 / staff '000 / staff '000 '000 % '000 '000 '000 Reserves % % % 1 Nationwide Apr Britannia Dec Portman Dec Yorkshire Dec Coventry Dec Chelsea Dec Skipton Dec Leeds & HolbeckDec West Bromwich Mar Derbyshire Dec Cheshire Dec Principality Dec Newcastle Dec Norwich & Peterborough Dec Stroud & Swindon Dec Nottingham Dec Dunfermline Dec Scarborough Apr Progressive Dec Cumberland Mar Lambeth Jan Kent Reliance Sep , , , ,900 81, % Y - Open ,000-67, , % ,836 65, ,193 55,700 5, % Y - Closed - -11,100-53,600-64, % ,735 58, ,941 46,400 8, % Y - Open - -24,600-7,210-31, % ,015 59, ,417 49,300 5, % Y - Closed - -32,100-2,240-34, % ,032 29, ,155 24,300 3, % Y - Closed - -1,500-3,010-4, % , ,825 23,400 2, % Y - Closed Y , , % ,007 27, ,815 22,800 2, % Y - Closed - -35,100-2,600-37, % , ,275 15,700 1, % Y - Closed - -5,500-2,700-8, % , ,036 20,000 1, % Y - Closed Y , , % , ,974 15,104 1, % Y - Closed Y , , % , ,247 17,200 2, % Y - Closed Y , , % , ,340 15,000 1, % Y - Closed Y , , % , ,013 12,800 1, % Y - Closed Y , , % , ,423 18,200 2, % Y - Closed - -2,000-7,840-9, % , ,675 8, % Y - Closed Y , , % , ,458 6,891 1, % Y - Closed - -5, , % , ,154 8,622 1, % Y - Closed - -4,302-1,761-6, % , ,234 4, % Y - Closed Y , , % , ,186 3, % Y - Closed - -2, , % , ,673 5,521 1, % Y - Closed - -3,591-1,098-4, % , ,948 3, % Y - Closed Y , , % , ,539 3, % Y - Closed - n/a n/a n/a n/a n/a n/a n/a Average of Peer Group Societies , % 4.86%

14 12 Building Societies Database Database Tables Peer Group 1 Society Loans and Advances (1): Arrears and Provisions Asset Society Year End ranking Total Year End FSRP Provisions FSOL Provisions Lending Limit Number of FSRP FSOL Other Accounts with Arrears of Mortgage Charge/ Year End Charge/ (Credit) Provision to Charge/ (Credit) Provision to Society Loans Loans Loans 12 months and over Provisions (Credit) Provision to FSRP Assets FSRP Assets to FSOL Assets FSOL Assets % Borrowers '000 '000 '000 Number % '000 '000 '000 % % % % 1 Nationwide Apr Britannia Dec Portman Dec Yorkshire Dec Coventry Dec Chelsea Dec Skipton Dec Leeds & HolbeckDec West Bromwich Mar Derbyshire Dec Cheshire Dec Principality Dec Newcastle Dec Norwich & Peterborough Dec Stroud & Swindon Dec Nottingham Dec Dunfermline Dec Scarborough Apr Progressive Dec Cumberland Mar Lambeth Jan Kent Reliance Sep % n/a 76,172,300 6,819,700 1,654, n/a 197, , % 0.13% -0.02% 0.97% 10.00% 285,626 10,668,700 1,223,900 64, % 23,200-2,300 10, % 0.10% 0.14% 1.00% 2.05% 83,379 9,426, , % 19,100-5,700 18, % 0.20% -0.14% 0.14% 1.00% 271,647 8,890,500 10, % 6,500-2,200 6, % 0.07% 0.00% 0.00% 0.59% 110,043 7,737, , % 24,200-5,400 23, % 0.31% 0.00% 0.00% 0.60% 82,751 6,728,200 2, % 14, , % 0.21% 0.00% 0.00% 6.37% 64,000 4,498, ,500 7, % 5,100-1,400 3, % 0.08% -0.43% 0.62% 5.80% 120,000 4,623, ,500 7, % 19, , % 0.36% 0.62% 1.21% 16.10% 43,643 3,090, , % 6, , % 0.08% -0.20% 0.70% 0.84% 45,806 2,769,744 5, % % 0.03% -1.78% 1.07% 6.74% 51,000 2,892, , % 1, , % 0.03% -0.32% 0.05% 10.33% 86,118 2,919, , % 3, , % 0.05% 0.12% 0.75% 12.37% 65,772 2,352, , , % 3,200-2,300 1, % 0.04% 0.08% 0.70% 10.67% 33,000 2,218, ,900 5, % 3, , % 0.11% 0.00% 0.26% 1.58% 27,000 1,391,884 7, % % 0.06% -0.04% 0.52% 0.76% 50,656 1,824,595 1, % 1, , % 0.11% 0.00% 1.21% 11.00% 52,000 1,468, ,004 24, % 1, , % 0.08% 0.19% 0.27% 1.94% 12, , % % 0.06% 0.00% 1.35% 1.13% 13, ,829 9, % % 0.06% -0.36% 0.72% 12.04% 20, , , % 4, , % 0.33% 0.00% 1.45% 0.80% 12, , , % 1, , % 0.21% 0.00% 0.00% 3.17% 8, ,064 23, % % 0.03% -0.02% 0.03% Average of Peer Group Societies 5.82% 0.04% -0.02% 0.12% -0.10% 0.59%

15 Building Societies Database Database Tables 13 Peer Group 1 Society Loans and Advances (2): Provisions Loans Fully Secured on Residential Property FSRP Loans Fully Secured on Land FSOL Asset Society Year End ranking General Specific General to Specific General Provision/ Specific Provision/ General Specific General to Specific General Provision/ Specific Provision/ Provision Provision Provision Total FSRP Total FSRP Provision Provision Provision Total FSOL Total FSOL '000 '000 % % % '000 '000 % % % 1 Nationwide Apr Britannia Dec Portman Dec Yorkshire Dec Coventry Dec Chelsea Dec Skipton Dec Leeds & HolbeckDec West Bromwich Mar Derbyshire Dec Cheshire Dec Principality Dec Newcastle Dec Norwich & Peterborough Dec Stroud & Swindon Dec Nottingham Dec Dunfermline Dec Scarborough Apr Progressive Dec Cumberland Mar Lambeth Jan Kent Reliance Sep ,000 4, % 0.12% 0.01% 59,900 7, % 0.87% 0.10% 10, % 0.10% 0.00% 11, % 0.95% 0.05% 18, % 0.20% 0.00% n/a 0.14% 0.00% 6, % 0.07% 0.00% 0 0 n/a 0.00% 0.00% 23, % 0.30% 0.00% 0 0 n/a 0.00% 0.00% 14, % 0.21% 0.00% 0 0 n/a 0.00% 0.00% 3,800 0 n/a 0.08% 0.00% % 0.38% 0.24% 16, % 0.34% 0.01% 3,100 0 n/a 1.21% 0.00% 2, % 0.07% 0.01% 4,100 0 n/a 0.70% 0.00% % 0.03% 0.00% 54 0 n/a 1.07% 0.00% 1,000 0 n/a 0.03% 0.00% n/a 0.05% 0.00% 1, % 0.04% 0.01% 2,500 0 n/a 0.75% 0.00% % 0.04% 0.00% % 0.62% 0.08% 1,400 1, % 0.06% 0.05% n/a 0.26% 0.00% % 0.05% 0.00% % 0.31% 0.22% 1,955 0 n/a 0.11% 0.00% 20 0 n/a 1.21% 0.00% % 0.04% 0.03% n/a 0.27% 0.00% % 0.06% 0.00% 0 11 n/a 0.00% 1.35% % 0.03% 0.02% % 0.69% 0.03% 2,621 0 n/a 0.33% 0.00% 1,490 0 n/a 1.45% 0.00% 1, % 0.21% 0.00% 0 0 n/a 0.00% 0.00% n/a 0.03% 0.00% 7 0 n/a 0.03% 0.00% Total Total Peer Gp Ratio Total Total Peer Gp Ratio 202,246 8, % 86,029 8, % Average of Peer Group Societies 0.12% 0.01% 0.50% 0.09%

16 14 Building Societies Database Database Tables Peer Group 2 Balance Sheet, Members and Branches Asset Society Year End Group Group Society Society Number of Average Balance Funding Limit Liquid Assets Society Total Society Society Society ranking Total Assets Asset Growth Total Assets Asset Growth Society per Shareholder ratio Branches Assets per Branch Shareholders Borrowers Shareholders per Branch per Branch '000 % Rank '000 % Rank % % Number ' National Counties Dec , % 8 843, % 8 27,115 19, % 24.37% 1 843,449 27,115 10, Furness Dec , % 9 738, % 9 108,398 5, % 19.39% 11 67,153 9,854 1, Cambridge Dec , % , % ,709 5, % 26.94% 21 33,572 5, Hinckley & Rugby Nov , % 3 634, % 3 90,000 5, % 19.50% 12 52,878 7, Leek United Dec , % , % 17 52,388 8, % 25.33% 12 51,687 4, Universal Dec 2004 n/a n/a n/a 534, % 13 65,000 5, % 21.40% 10 53,419 6, Darlington Dec , % , % 24 84,287 5, % 23.20% 13 41,135 6, Newbury Oct , % 1 508, % 1 43,554 8, % 20.79% 9 56,487 4, Saffron Walden Dec , % , % 22 88,390 4, % 37.40% 12 40,016 7, Manchester Dec , % 2 476, % 2 21,349 17, % 19.80% 1 476,121 21,349 4, Monmouthshire Apr , % 6 448, % 6 49,331 7, % 21.97% 9 49,794 5, Melton Mowbray Dec 2004 n/a n/a n/a 354, % 14 59,261 5, % 22.75% 4 88,535 14,815 1, Market Harborough Dec , % , % 20 57,317 4, % 20.82% 5 70,112 11,463 1, Ipswich Nov 2004 n/a n/a n/a 340, % 18 52,009 5, % 25.61% 8 42,600 6, Marsden Dec , % , % 19 59,506 4, % 25.79% 15 22,204 3, Barnsley Dec , % , % 16 69,697 4, % 27.52% 8 41,149 8, Hanley Economic Aug , % , % 15 33,625 7, % 23.92% 4 70,101 8,406 1, Tipton & Coseley Dec , % 4 261, % 4 28,403 6, % 20.57% 4 65,469 7,101 1, Teachers' Dec , % , % 10 17,155 10, % 24.30% 1 234,225 17,155 2, Mercantile Dec , % , % 23 40,312 4, % 27.29% 13 17,907 3, Dudley Mar , % 7 205, % 7 22,100 7, % 21.15% 6 34,280 3, Vernon Dec , % 5 203, % 5 36,502 4, % 18.70% 9 22,581 4, Loughborough Oct 2004 n/a n/a n/a 203, % 11 23,089 6, % 19.54% 3 67,670 7,696 1, Scottish Jan , % , % 21 26,353 6, % 19.40% 5 40,318 5, Total Peer Gp Total Peer Gp 10,053,954 10,054,269 Average of peer group societies 8.37% 8.00% 7, % 23.23% 107,619 8,697 1,363

17 Building Societies Database Database Tables 15 Peer Group 2 Group Profitability Ratios Group Reserves and Capital Asset Society Year End ranking Group Profit Growth Group/Society Profit Group Net Group Cost / Group ManEx / Mean Assets (Group ManEx PIBS Subordinated General Revaluation Total Reserves/ Gross Free for Year for Year/Mean Assets Interest Margin Income Ratio Other Income) Debt Reserve Reserve Total Assets Capital Capital / Mean Assets / Mean Assets '000 % % % % % Rank% '000 '000 '000 '000 % % % 23 National Counties Dec Furness Dec Cambridge Dec Hinckley & Rugby Nov Leek United Dec Universal Dec Darlington Dec Newbury Oct Saffron Walden Dec Manchester Dec Monmouthshire Apr Melton Mowbray Dec Market Harborough Dec Ipswich Nov Marsden Dec Barnsley Dec Hanley Economic Aug Tipton & Coseley Dec Teachers' Dec Mercantile Dec Dudley Mar Vernon Dec Loughborough Oct Scottish Jan , % 0.29% 0.94% 60.31% 0.63% % , % 13.59% 12.74% 3, % 0.48% 1.49% 58.97% 0.97% % 0 2,927 43, % 6.72% 6.48% 2, % 0.43% 1.88% 66.55% 1.27% % , % 7.10% 5.91% 1, % 0.31% 1.37% 68.01% 0.89% % , % 6.40% 6.00% 2, % 0.45% 1.61% 64.39% 1.19% % ,269 1, % 6.99% 6.44% n/a n/a 0.37% n/a n/a n/a n/a n/a , % 6.18% 5.53% 1, % 0.30% 1.55% 73.15% 1.35% % , % 7.80% 6.70% 1, % 0.29% 1.45% 71.59% 1.06% % ,235 1, % 6.45% 5.47% % 0.11% 1.84% 93.57% 1.60% % 0 1,000 31, % 7.40% 5.90% 2, % 0.53% 1.56% 51.13% 0.83% % 5,000 7,500 19, % 7.20% 6.80% 2, % 0.50% 1.53% 55.98% 0.94% % , % 6.05% 5.17% n/a n/a 0.27% n/a n/a n/a n/a n/a , % 7.98% 7.24% % 0.24% 1.31% 77.47% 1.13% % , % 7.33% 6.81% n/a n/a 0.36% n/a n/a n/a n/a n/a 0 5,910 16, % 7.14% 6.17% 1, % 0.32% 2.02% 78.88% 1.74% % , % 8.86% 7.55% % 0.23% 1.75% 82.39% 1.49% % , % 7.15% 6.13% 1, % 0.38% 1.75% 70.72% 1.39% % , % 8.00% 6.89% 1, % 0.43% 1.45% 63.70% 1.06% % , % 7.73% 7.03% % 0.22% 1.64% 74.96% 1.14% % , % 7.36% 7.19% % 0.40% 1.77% 71.44% 1.35% % , % 9.28% 8.16% % 0.51% 1.87% 61.45% 1.15% % , % 6.71% 6.65% % 0.30% 1.70% 75.88% 1.36% % , % 6.90% 5.90% n/a n/a 0.36% n/a n/a n/a n/a n/a , % 7.68% 7.44% % 0.40% 2.36% 72.45% 1.54% % , % 11.50% 10.80% Average of peer group societies -1.98% 0.35% 1.64% 69.65% 1.20% 1.13% 6.91% 7.73% 6.96%

18 16 Building Societies Database Database Tables Peer Group 2 Society Profitability Ratios Asset Society Year End ranking Society Profit Growth Net Interest Interest Interest Interest Other Income Cost/Income Provision Charge Total ManEx ManEx / Mean Assets ManEx - for Year Margin / Mean Receivable / Payable / Spread for & Charges / Ratio (Credit) for Year Other Income / Assets Mean FSRP Mean Shares Members Total Income / Profit pre- Mean Assets '000 % % % % % % % Provision % '000 % Rank% 23 National Counties Dec Furness Dec Cambridge Dec Hinckley & Rugby Nov Leek United Dec Universal Dec Darlington Dec Newbury Oct Saffron Walden Dec Manchester Dec Monmouthshire Apr Melton Mowbray Dec Market Harborough Dec Ipswich Nov Marsden Dec Barnsley Dec Hanley Economic Aug Tipton & Coseley Dec Teachers' Dec Mercantile Dec Dudley Mar Vernon Dec Loughborough Oct Scottish Jan , % 0.91% 5.05% 4.43% 0.62% 10.02% 61.15% -0.13% 4, % % 3, % 1.43% 5.37% 3.80% 1.57% 8.74% 59.99% -0.25% 6, % % 2, % 1.87% 5.19% 3.46% 1.73% 4.21% 66.43% 1.61% 8, % % 1, % 1.37% 5.06% 3.46% 1.60% -3.72% 67.69% -3.64% 5, % % 2, % 1.61% 5.60% 3.79% 1.81% 13.81% 63.86% -0.05% 6, % % 1, % 1.48% 5.42% 3.84% 1.58% 6.23% 67.89% -2.70% 5, % % 1, % 1.52% 5.05% 3.52% 1.53% 9.47% 77.37% -0.39% 7, % % 1, % 1.50% 4.90% 3.50% 1.40% 6.96% 70.50% 0.80% 5, % % % 1.68% 5.48% 3.63% 1.85% 7.79% 95.82% % 7, % % 2, % 1.56% 5.81% 3.98% 1.83% 7.30% 47.21% 5.60% 3, % % 2, % 1.53% 5.93% 4.35% 1.58% 7.08% 54.53% 3.91% 3, % % % 1.21% 5.09% 4.03% 1.06% 13.70% 70.03% -0.23% 3, % % % 1.26% 4.97% 3.51% 1.46% 13.72% 79.61% -0.51% 3, % % 1, % 1.81% 5.61% 3.28% 2.33% 3.28% 82.02% 7.82% 5, % % 1, % 2.02% 5.53% 3.33% 2.20% 10.03% 77.43% -0.12% 5, % % % 1.75% 5.41% 3.46% 1.95% 9.32% 82.39% -0.49% 4, % % % 1.67% 5.16% 3.13% 2.03% 10.64% 73.17% -0.67% 3, % % 1, % 1.45% 5.22% 3.68% 1.54% 11.91% 63.74% -0.07% 2, % % % 1.64% 6.02% 4.26% 1.76% -0.47% 74.46% -7.69% 2, % % % 1.67% 5.45% 3.35% 2.10% 7.28% 74.69% -0.10% 3, % % % 1.87% 5.97% 4.01% 1.96% 8.03% 60.87% -1.50% 2, % % % 1.70% 5.36% 3.56% 1.80% 5.44% 75.06% 3.95% 2, % % % 1.61% 5.23% 3.68% 1.55% 9.31% 71.54% 0.41% 2, % % % 2.29% 5.68% 3.32% 2.36% -2.94% 73.16% 0.00% 2, % % Average of peer group societies 0.10% 1.60% 5.40% 3.68% 1.72% 7.38% 70.44% -3.65% 1.18% 1.11%

19 Building Societies Database Database Tables 17 Peer Group 2 Society Staff Ratios, Pension Costs and Group FRS17 Issues Asset Society Year End ranking Society staff costs Society pension costs Group FRS17 disclosures Total Total Staff Costs Profit for Year Total Assets Total wages Other Pension Defined FRS17 Group FRS17 (Deficit) / Surplus Key FRS17 assumptions Number Staff per Staff per Staff per Staff and salaries pension costs / Benefit adopted After SSAP24 Total (def) / surp Salary Discount Inflation of Staff Costs Member Member costs TW&S Scheme? early? def. tax (prep) / acc % of Gen increase rate rate '000 '000 / staff '000 / staff '000 / staff '000 '000 % '000 '000 '000 Reserves % % % 23 National Counties Dec Furness Dec Cambridge Dec Hinckley & Rugby Nov Leek United Dec Universal Dec Darlington Dec Newbury Oct Saffron Walden Dec Manchester Dec Monmouthshire Apr Melton Mowbray Dec Market Harborough Dec Ipswich Nov Marsden Dec Barnsley Dec Hanley Economic Aug Tipton & Coseley Dec Teachers' Dec Mercantile Dec Dudley Mar Vernon Dec Loughborough Oct Scottish Jan , ,745 2, % Y - Open - -1, , % , ,105 2, % Y - Closed - -3, , % , ,462 3, % Y - Closed - -3, , % , ,015 2, % Y - Open - -1,051-1,702-2, % , ,594 2, % Y - Closed - -5, , % , ,665 2, % Y - Closed - -1, , % , ,766 2, % Y - Open - -1, , % , ,466 2, % Y - Closed - -1, , % n/s , ,584 2, % Y - Closed - -1, , % , ,156 1, % Y - Closed Y % n/s , ,783 1, % Y - Open % , ,818 1, % Y - Open - 5, , % , ,802 1, % Y - Open - -1, , % , ,787 1, % Y - Closed Y % , ,562 2, % No - n/a n/a n/a n/a n/a n/a n/a 86 2, ,850 1, % Y - Open - -1, , % , ,597 1, % No - n/a n/a n/a n/a n/a n/a n/a 57 1, ,594 1, % No - n/a n/a n/a n/a n/a n/a n/a 38 1, , % Y - Closed Y , , % , ,083 1, % Y - Closed - -1, , % , , % Y - Closed % , ,176 1, % No - n/a n/a n/a n/a n/a n/a n/a 48 1, , % No - n/a n/a n/a n/a n/a n/a n/a 50 1, ,073 1, % No - n/a n/a n/a n/a n/a n/a n/a Average of peer group societies , % 4.37%

20 18 Building Societies Database Database Tables Peer Group 2 Society Loans and Advances (1): Arrears and Provisions Asset Society Year End ranking Total Year End FSRP Provisions FSOL Provisions Lending Limit Number of FSRP FSOL Other Accounts with Arrears of Mortgage Charge/ Year End Charge/ (Credit) Provision to Charge/ (Credit) Provision to Society Loans Loans Loans 12 months and over Provisions (Credit) Provision to FSRP Assets FSRP Assets to FSOL Assets FSOL Assets % Borrowers '000 '000 '000 Number % '000 '000 '000 % % % % 23 National Counties Dec Furness Dec Cambridge Dec Hinckley & Rugby Nov Leek United Dec Universal Dec Darlington Dec Newbury Oct Saffron Walden Dec Manchester Dec Monmouthshire Apr Melton Mowbray Dec Market Harborough Dec Ipswich Nov Marsden Dec Barnsley Dec Hanley Economic Aug Tipton & Coseley Dec Teachers' Dec Mercantile Dec Dudley Mar Vernon Dec Loughborough Oct Scottish Jan % 10, ,665 10, % 1, , % 0.18% -0.45% 0.10% 4.68% 11, ,741 27, % % 0.18% -0.01% 0.00% 12.23% 7, ,572 61, % % 0.04% 0.00% 0.00% 1.80% 9, ,840 4, % % 0.14% 0.00% 0.68% 1.07% 9, ,722 4, % % 0.10% 0.00% 0.00% 1.27% 6, ,256 1,353 2, % % 0.07% 0.00% 0.00% 7.10% 8, ,432 22, % % 0.06% 0.00% 0.00% 4.92% 4, ,324 6, % % 0.10% 0.12% 0.50% 4.40% 6, ,280 12, % % 0.10% -0.83% 1.31% 10.16% 4, ,283 37, % % 0.26% -0.32% 0.05% 9.67% 4, ,072 33, % 1, , % 0.37% 0.00% 0.11% 1.98% 5, ,492 3,529 1, % % 0.09% 0.03% 0.08% 1.36% 5, ,940 3,371 6, % % 0.05% 0.00% 0.00% 2.70% 6, ,152 5, % % 0.28% 0.00% 0.00% 4.45% 6, ,656 10, % 1, % 0.21% 0.29% 5.93% 0.92% 6, ,492 2, % % 0.07% 0.00% 0.00% 4.88% 5, ,831 9, % % 0.17% -1.08% 0.96% 5.72% 4, ,134 10, % % 0.11% -0.32% 0.31% 2.86% 2, ,204 4, % % 0.19% 0.21% 0.00% 3.70% 4, ,584 4, % % 0.03% 0.00% 0.00% 3.60% 2, ,783 5, % % 0.21% 0.16% 0.99% 9.00% 2, ,466 14, % % 0.12% 0.07% 0.76% 9.32% 3, ,101 14, % % 0.25% 0.17% 1.20% 11.10% 3, ,331 18, % % 0.15% 0.00% 0.00% Average of peer group societies 5.03% 0.05% 0.01% 0.15% -0.08% 0.54%

21 Building Societies Database Database Tables 19 Peer Group 2 Society Loans and Advances (2): Provisions Loans Fully Secured on Residential Property FSRP Loans Fully Secured on Land FSOL Asset Society Year End ranking General Specific General to Specific General Provision/ Specific Provision/ General Specific General to Specific General Provision/ Specific Provision/ Provision Provision Provision Total FSRP Total FSRP Provision Provision Provision Total FSOL Total FSOL '000 '000 % % % '000 '000 % % % 23 National Counties Dec Furness Dec Cambridge Dec Hinckley & Rugby Nov Leek United Dec Universal Dec Darlington Dec Newbury Oct Saffron Walden Dec Manchester Dec Monmouthshire Apr Melton Mowbray Dec Market Harborough Dec Ipswich Nov Marsden Dec Barnsley Dec Hanley Economic Aug Tipton & Coseley Dec Teachers' Dec Mercantile Dec Dudley Mar Vernon Dec Loughborough Oct Scottish Jan % 0.10% 0.08% 10 0 n/a 0.10% 0.00% % 0.17% 0.01% 0 0 n/a 0.00% 0.00% n/a 0.04% 0.00% 0 0 n/a 0.00% 0.00% % 0.13% 0.00% 30 0 n/a 0.68% 0.00% n/a 0.10% 0.00% 0 0 n/a 0.00% 0.00% % 0.04% 0.04% 0 0 n/a 0.00% 0.00% % 0.06% 0.01% 0 0 n/a 0.00% 0.00% % 0.09% 0.01% 34 0 n/a 0.50% 0.00% n/a 0.10% 0.00% % 0.14% 1.17% % 0.17% 0.10% 0 20 n/a 0.00% 0.05% 1, % 0.36% 0.02% 38 0 n/a 0.11% 0.00% n/a 0.09% 0.00% 3 0 n/a 0.08% 0.00% n/a 0.05% 0.00% 0 0 n/a 0.00% 0.00% % 0.25% 0.03% 0 0 n/a 0.00% 0.00% % 0.06% 0.14% % 1.41% 4.53% % 0.06% 0.00% 0 0 n/a 0.00% 0.00% % 0.16% 0.01% % 0.76% 0.19% % 0.11% 0.00% 33 0 n/a 0.31% 0.00% % 0.18% 0.01% 0 0 n/a 0.00% 0.00% 36 0 n/a 0.03% 0.00% 0 0 n/a 0.00% 0.00% % 0.20% 0.00% 56 0 n/a 0.99% 0.00% % 0.11% 0.00% n/a 0.76% 0.00% % 0.24% 0.01% n/a 1.20% 0.00% n/a 0.15% 0.00% 0 0 n/a 0.00% 0.00% Total Total Peer Gp Ratio Total Total Peer Gp Ratio 8,701 1, % % Average of peer group societies 0.13% 0.02% 0.29% 0.25%

22 20 Building Societies Database Database Tables Peer Group 3 Balance Sheet, Members and Branches Asset Society Year End Group Group Society Society Number of Average Balance Funding Limit Liquid Assets Society Total Society Society Society ranking Total Assets Asset Growth Total Assets Asset Growth Society per Shareholder ratio Branches Assets per Branch Shareholders Borrowers Shareholders per Branch per Branch '000 % Rank '000 % Rank % % Number ' Mansfield Dec 2004 n/a n/a n/a 198, % 6 23,245 6, % 25.23% 5 39,640 4, Chesham Nov 2004 n/a n/a n/a 188, % 14 17,555 9, % 32.77% 4 47,105 4, Bath Investment Dec , % 3 137, % 15 22,200 4, % 22.30% 8 17,168 2, Chorley & District Feb 2005 n/a n/a n/a 136, % 10 16,345 6, % 27.54% 3 45,447 5, Holmesdale Mar 2005 n/a n/a n/a 135, % 13 7,346 16, % 28.38% 1 135,834 7,346 1, Buckinghamshire Dec 2004 n/a n/a n/a 124, % 11 8,383 11, % 22.45% 2 62,287 4, Harpenden Dec 2004 n/a n/a n/a 116, % 7 16,884 5, % 21.14% 3 38,956 5, Stafford Railway Oct 2004 n/a n/a n/a 106, % 8 12,683 6, % 18.48% 1 106,843 12,683 1, Beverley Dec 2004 n/a n/a n/a 95, % 5 13,015 6, % 20.17% 2 47,720 6, Earl Shilton Mar , % 4 85, % 17 11,672 6, % 34.42% 2 42,699 5, Swansea Dec , % 2 85, % 2 6,066 10, % 30.64% 1 85,467 6, Shepshed Dec , % 1 78, % 1 n/a n/a 12.53% 25.51% 3 26,124 n/a n/a 59 Penrith Dec 2004 n/a n/a n/a 71, % 16 6,218 10, % 48.46% 1 71,880 6, Ecology Dec 2004 n/a n/a n/a 55, % 9 7,902 6, % 25.82% 1 55,111 7, Catholic Dec 2004 n/a n/a n/a 37, % 12 3,150 8, % 28.62% 1 37,299 3, City of Derry Dec 2004 n/a n/a n/a 27, % 3 n/a n/a 0.00% 39.47% 1 27,668 n/a n/a 63 Century Dec 2004 n/a n/a n/a 20, % 4 3,453 5, % 22.92% 1 20,442 3, Total Peer Gp Total Peer Gp 1,701,779 1,701,497 Average of peer group societies 10.62% 10.13% 8, % 27.90% 53,393 5,