SBS 2020 Country by Country.qxp_A4 Brochure from SiGGA Design 11/05/2021 9:03 am Page 2

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Country by Country Reporting 2020 SBS 2020 Country by Country.qxp_A4 Brochure from SiGGA Design 11/05/2021 9:03 am Page 1

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Country-by-Country Reporting for the year ending December 2020

Article 89 of the Capital Requirements Directive IV (CRD IV) requires credit institutions and investment firms in the EU to disclose annually, specifying, by Member State and by third country in which it has an establishment, the information shown below. At 31 December 2020, met the definition of a 'credit institution' and is classified within the retail banking category. It is registered and trades solely in the United Kingdom. 2020 2019 Number of employees (full time equivalent) 53 51 Turnover £m 1 8.29 7.46 Pre-tax profit £m 3.27 2.30 Corporation tax paid £m 2 0.43 0.51 Public subsidies received Nil Nil

1) Turnover is defined as total net income (net interest receivable and net fee/commission income) in accordance with guidance from UK Treasury. 2) Corporation tax paid in 2020 is partly in respect of the results for the year ended 31 December 2019 and partly in respect of the results for the year ended 31 December 2020.

Basis of preparation The Society's Country-By-Country Reporting ("CBCR") has been prepared to comply with the Regulations which came into effect in 1 January 2014. The requirements place certain reporting obligations on financial institutions that are within the scope of CRD IV. CBCR requires annual publication of certain statutory information on a consolidated basis, by country where an institution has a subsidiary or branch. All of the Society's operations are in the United Kingdom.

Report on the audit of the country-by-country information

Opinion Independence

In our opinion, Swansea Building Society’s country-by- We remained independent of the Society in accordance country information for the year ended 31 December with the ethical requirements that are relevant to our 2020 has been properly prepared, in all material respects, audit of the country-by-country information in the UK, in accordance with the requirements of the Capital which includes the FRC’s Ethical Standard, as applicable Requirements (Country-by-Country Reporting) to public interest entities, and we have fulfilled our other Regulations 2013. ethical responsibilities in accordance with these requirements. We have audited the country-by-country information for the year ended 31 December 2020 in the Country-by- Country Reporting. Emphasis of matter - Basis of preparation

In forming our opinion on the country-by-country Basis for opinion information, which is not modified, we draw attention to the basis of preparation. The country-by-country We conducted our audit in accordance with information is prepared for the directors for the International Standards on Auditing (UK) (“ISAs (UK)”), purpose of complying with the requirements of the including ISA (UK) 800 and ISA (UK) 805, and Capital Requirements (Country-by-Country Reporting) applicable law. Our responsibilities under ISAs (UK) are Regulations 2013. The country-by-country information further described in the Auditors’ responsibilities for has therefore been prepared in accordance with a the audit of the country-by-country information special purpose framework and, as a result, the section of our report. We believe that the audit country-by-country information may not be suitable for evidence we have obtained is sufficient and another purpose. appropriate to provide a basis for our opinion.

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Country-by-Country Reporting for the year ending December 2020 (continued)

Conclusions relating to going concern Responsibilities for the country-by-country information and the audit Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going Auditors’ responsibilities for the audit of the concern basis of accounting included: country-by-country information • A critical assessment of the directors’ conclusions on their going concern assessment, including It is our responsibility to report on whether the consideration of the impact of Covid-19 on the country-by-country information has been properly annual accounts. prepared in accordance with the relevant requirements • A review of the impact of management’s stress of the Capital Requirements (Country-by-Country test scenarios and considered the likelihood of Reporting) Regulations 2013. successful implementation of management actions to mitigate the impacts. We considered whether the Our objectives are to obtain reasonable assurance Society would continue to operate above required about whether the country-by-country information as a regulatory capital and liquidity minima during times whole is free from material misstatement, whether due of stress. to fraud or error, and to issue an auditors’ report that • challenge of the reasonableness of the scenarios includes our opinion. Reasonable assurance is a high used by the directors in their going concern level of assurance, but is not a guarantee that an audit assessment and checked the appropriateness of the conducted in accordance with ISAs (UK) will always assumptions used within their forecasting. detect a material misstatement when it exists. • evaluation of management’s disclosures in the Annual Report and checked the consistency of the Misstatements can arise from fraud or error and are disclosures with our knowledge of the Society considered material if, individually or in the aggregate, based on our audit. they could reasonably be expected to influence the economic decisions of users taken on the basis of this Based on the work we have performed, we have not country-by-country information. identified any material uncertainties relating to events or conditions that, individually or collectively, may cast Irregularities, including fraud, are instances of non- significant doubt on the Society’s ability to continue as a compliance with laws and regulations. We design going concern for a period of at least twelve months procedures in line with our responsibilities, outlined from the date on which the country-by-country above, to detect material misstatements in respect of information is authorised for issue. irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, In auditing the country-by-country information, we have including fraud, is detailed below. concluded that the directors’ use of the going concern basis of accounting in the preparation of the country- Based on our understanding of the Society and by-country information is appropriate. industry, we identified that the principal risks of non- compliance with laws and regulations related to However, because not all future events or conditions can breaches of UK regulatory principles, such as those be predicted, this conclusion is not a guarantee as to the governed by the Financial Conduct Authority and the Society’s ability to continue as a going concern. Prudential Regulation Authority , and we considered the extent to which non-compliance might have a Our responsibilities and the responsibilities of the material effect on the country-by-country information. directors with respect to going concern are described in We also considered those laws and regulations that the relevant sections of this report. have a direct impact on the country-by-country information such as the Building Societies Act 1986, UK tax legislation and the Capital Requirements (Country- by-Country Reporting) Regulations 2013. We evaluated management’s incentives and opportunities for fraudulent manipulation of the country-by-country information (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to decrease

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revenue or increase expenditure and management bias Use of this report in accounting estimates. Audit procedures performed included: This report, including the opinion, has been prepared for • Discussions with management and internal audit to and only for the Society’s directors in accordance with enquire of any known instances of non compliance the Capital Requirements (Country-by-Country with Laws and Regulations and Fraud; Reporting) Regulations 2013 and for no other purpose. • Reading correspondence with the Society’s We do not, in giving this opinion, accept or assume regulators The Financial Conduct Authority and the responsibility for any other purpose or to any other Prudential Regulatory Authority in relation to person to whom this report is shown or into whose compliance with Financial Services Regulations; hands it may come, save where expressly agreed by our • Challenging assumptions and judgements made by prior consent in writing. management in their significant accounting estimates, in particular in relation to impairment losses on loans and advances to customers and effective interest rate (“EIR”) accounting (see the related key audit matters below); and • Identifying and testing journal entries, in particular journal entries posted with account combinations PrlcewaterhouseCoopers LLP that would decrease interest income or increase Chartered Accountants and Statutory Auditors expenditure. 9 March 2021 There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the country-by-country information. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities for the audit of the country-by-country information is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities.

This description forms part of our auditors’ report.

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www.swansea-bs.co.uk

CARMARTHEN BRANCH 13-14 Lammas Street, SA31 3AQ Tel: 01267 611950 Fax: 01267 611951 [email protected]

COWBRIDGE BRANCH 75 High Street, Cowbridge CF71 7AF Tel: 01446 506000 Fax: 01446 506001 [email protected]

MUMBLES BRANCH 496 Road, Swansea SA3 4BX Tel: 01792 739200 Fax: 01792 739201 [email protected]

SWANSEA BRANCH 1-4 Portland Street, Swansea SA1 3DH Tel: 01792 739100 Fax: 01792 739101 [email protected]

HEAD OFFICE 11-12 Cradock Street, Swansea SA1 3EW Tel: 01792 739100 Fax: 01792 739101

Swansea Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register Number: 206066

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