Use your vote to make a difference
As a member you’re an important part of our Society. You and the other members of the Yorkshire, Chelsea, Barnsley and Norwich & Peterborough building societies are our owners. That’s something we never forget. We come together as the YBS Group.
Voting is important
With 150 years of expertise to guide us, we keep your interests at the heart of everything we do. The decisions we make ensure we’re financially secure, able to offer you long-term value, excellent service, and can continue to invest in our future.
As a member you get to vote on key decisions - such as the election and re-election of the directors who run the Society on your behalf. This takes place every year at our Annual General Meeting (AGM), where you have the opportunity to meet our directors, share your views and vote.
I hope you’ll be able to attend the AGM, but understand this won’t be convenient for everyone. That’s why we’ve enclosed everything you need to find out more and then vote from the comfort of your own home.
Everything you need is right here
- You can vote online using your personal online security code.
- Use your paper voting form to vote by post.
- Your Easy Guide To Voting will help you make an informed decision on how to vote.
- The Annual Review booklet contains information about our strong performance in 2014 and the answers to questions members frequently ask us.
If you’d like to receive your AGM communication online next year; it’s easy. Just choose that option when you vote online, or complete the appropriate section on your attached voting form.
Thank youLast November I announced that I will step down as your Chairman after the 2015 AGM.
I’ve been proud to serve the YBS Group as Chairman since 2007 and I would like to thank you, the members, for your support.
This is your Society, thank you for being part of it and I hope you’ll use your vote to make a difference.
Directors for election
When you open an account with us and become a savings or mortgage customer, you also become a member - and owner - of our society; it belongs to you. That's one of the things that make us different. We have you, not external shareholders, at the heart of everything we do and we never forget that.
What’s more, you – and 3.3 million others - are part of the UK’s second largest building society. You benefit from dealing with a large, financially secure organisation that believes in providing the sort of service where you feel valued as an individual.
Like any owner of any business, you have the opportunity to influence key decisions - like voting on the directors who run the business on your behalf. That's why you receive details of our Annual General Meeting (AGM) each year.
We’re accountable to you, so this year you can vote on all of the directors at the AGM (with the exception of Ed Anderson and Philip Johnson who both retire at the end of the AGM).
Your vote makes a difference - a director will only be elected or re-elected if the majority of members who vote, vote in their favour.
You can see what skills and experience each of the directors bring in the following profiles.
Directors for election
John Heaps LLB
- Joined the Board in November 2014 and will become Chairman following the 2015 AGM
- Currently a member of the Business and Oversight Board of the Law Society, and serves on the Risk and Audit and Constitutional Committees of the International Bar Association
- Previously Chairman of corporate law firm Eversheds. John will retire as a partner of Eversheds in April 2015
I am extremely proud to have been chosen as the next Chairman of such a well respected and successful mutual organisation. I look forward to working with the directors and executive team to continue to build on this success.
It is important that we continue to invest in our future for the benefit of new and existing members, as the financial market experiences increasing emphasis on web and mobile services, a significant increase in competition both from traditional and ‘challenger’ banks and much greater regulation and scrutiny.
In 2015 I’ll be focusing my energy on managing a highly effective Board to ensure it remains focused on the continued sustainability of the business. To do this, I’ll draw on my extensive commercial and leadership experience and skills gained over the years, including as chairman of a major international law firm operating in a highly regulated environment. I believe my strong financial knowledge, analytical skills and understanding of the importance of excellent customer service will be of great benefit in this role.
Alison Hutchinson BSc
- Joined the Board in February 2015 and is a member of the Audit Committee
- Currently CEO of The Pennies Foundation charity, a Trustee of the Charities Aid Foundation and a non-executive director of Aviva Life Holdings Ltd.
- Previously gained extensive experience in both IT and financial services with IBM, Barclays Bank and specialist mortgage provider Kensington Group
Most organisations talk about putting customers at the heart of their business – but at YBS Group it’s a reality, because our members are our shareholders.
As technology evolves rapidly, we need to use it not just to help customers benefit from our products and services, but also to ensure we continue to run an efficient operation. I believe my extensive experience of implementing large scale IT and change programmes, particularly within the financial services sector will be of benefit, enhancing the skills amongst the non-executive directors in this area, as the Society continues with its transformation programme.
I am passionate about doing what is in the best interest of the customer. Nearly 30 years working at a senior executive level in diverse sectors, from small family businesses to leading global enterprises, have taught me not just to do the right thing, but do it in the right way to enhance the customer experience.
Mike Regnier MEng, MBA
Chief Commercial Officer and Executive Director
- Joined the Board in June 2014
- Responsible for product development, marketing and customer experience across all channels
- Previously with Lloyds Banking Group in senior positions including Personal Current Accounts & Credit Card Director, and Product and Marketing Director for TSB
- Also held key roles at ASDA and Boston Consulting Group
I strongly believe in always acting in our members’ best interests, providing even better service and value. This makes us different to banks who face the inevitable trade-off of balancing the needs of customers and external shareholders.
Our challenge is to continue to deliver a real difference to members in an ever-changing regulatory and competitive environment. In 2015 I’ll be making sure that our investments in service, such as slicker technology for web and mobile, continue to make it easier and simpler for members to deal with us. I’ll also ensure that we continue to offer prices across our range of products that are as attractive as possible, whilst ensuring our financial performance is sustainable for the long term. I see my multi-brand, multi-channel financial services experience as a key strength, and my understanding of the current account market will help us to assess whether there could be an opportunity to offer members a current account across all of our Group brands.
Directors for re-election
Dame Kate Barker DBE, CBE
- Joined the Board in 2010
- Member of the Group Risk, Remuneration and the Board Governance and Nominations Committees. Trustee of the Society’s pension scheme
- Currently a non-executive director of Electra Private Equity Plc and Taylor Wimpey Plc, senior adviser to Credit Suisse and Chairman of the British Coal Staff Superannuation Scheme
- Previously a member of the Bank of England’s Monetary Policy Committee and Chief Economic Adviser to the CBI
I’m proud to represent an organisation that takes serving its members really seriously - it means we build on our relationships and many branches become valued parts of their communities.
As a successful mutual, we’re able to focus on our members with the support of a sound financial base. 2015 brings heightened risk of financial market volatility, with elections not just in the UK but also in several EU countries. It’s a year when it’s vital we consolidate our understanding of how we can work even better for our members.
My focus will be on continuing to monitor the housing market and Government policy, so we can play our role in helping individuals and families into secure home ownership. I’ll bring my experience of interest rate and housing policy to bear on the risks and opportunities we face, so that together we can continue to build a strong mutual building society.
Ian Bullock BSc, FIA
Chief Customer Officer and Executive Director
- Joined the Society in 2003 as Head of Insurance and Financial Services
- Appointed Executive Director in 2007
- Responsible for all aspects of the Group's branch networks, and customer operations and relations. Also Chairman of Accord Mortgages Ltd, the Society’s intermediary lending subsidiary
I see our greatest strength as the sheer passion and commitment of our colleagues to serve you, our members, to the very best of their ability.
My responsibilities extend to around 2,000 people whose sole purpose is to make sure we deliver only the very best customer experience.
In 2015 my challenge will be to continue to inspire and equip my colleagues with the skills and support they need to take our service to a whole new level, changing customers’ lives for the better.
Continued investment in our people and processes is critical. These are challenging times for everyone and I am totally committed to ensuring that we are as good as we can be so that we can help our members go forward with confidence. I'll draw on over 10 years of experience within a wide range of roles at the Group to help me meet this challenge.
Andy Caton BA
Chief Treasury and Corporate Affairs Officer and Executive Director
- Joined the Society in 1992 as an Economist
- Appointed Executive Director in 2004
- Trustee of Yorkshire Building Society Charitable Foundation
- Responsible for corporate affairs and treasury functions
- Currently Vice President of West and North Yorkshire Chamber of Commerce and Industry
We place great emphasis on our broader contribution to the communities we’re part of and the causes that are important to our members – as a modern mutual that feels absolutely right to me.
In 2015, I’ll ensure we build on the success of our national fund raising activity in support of Marie Curie. In my role as trustee of our Charitable Foundation I will also continue to make sure we support a wide variety of local causes through our charitable donations and colleague volunteering programme. I’ll continue to actively encourage members to get involved, so we support the causes they really care about; something that means a lot to me.
As the Group looks to grow its business during 2015, I’ll play an important role in continuing to ensure we diversify our sources of funding and achieve the right mix in terms of cost and maturity profile, always ensuring we have sufficient funds to meet our obligations. My extensive treasury experience means I’m well placed to achieve this.
Lynne Charlesworth BA, MBA
- Joined the Board in 2006 and appointed Vice Chairman in April 2012
- Chairman of the Group Risk Committee and a member of the Board Governance and Nominations Committee
- Joint Managing Director of St. James Investments Ltd
- Previously Head of Risk at National & Provincial Building Society and Group Risk Manager at Abbey National
I believe we always put the long-term interests of current and future members at the heart of everything we do - our strategy is driven by how we serve members' interests in the most effective and sustainable way.
Our people are one of our greatest assets. Meeting members around the country, I’m extremely proud of the enthusiastic and positive feedback I receive on our branch and head office colleagues.
I believe we must support our loyal savers and deliver the best value we can in a low interest rate environment. At the same time, we need to support younger members now buying homes, who also require a wider range of financial services. In 2015 I’ll be working hard to help achieve these goals through my work as Chairman of the Group Risk Committee, as we face increasing complex regulation, and as Vice Chairman by ensuring we have the right mix of skills and experience on our Board.
My background in risk and residential property management, together with many years in the building society sector, gives me useful insight into our business, one I’m extremely proud to represent.
Robin Churchouse MA, ACA
Chief Operating Officer and Finance Director
- Joined the Society in 2004 as Head of Finance
- Appointed as Executive Director in 2010
- Responsible for corporate strategy and planning, finance, shared services, and property
- Previously worked at financial services organisations in accounting, consulting, regulatory and wider roles
My focus is on members and the long term – not just profit. That's why we invest for the future, rather than short-term benefits.
The 2015 outlook is uncertain, as we could see a change to both economic and political landscapes. We are conscious of the impact a continued slow recovery or stagnation could have on savers.
We need to balance delivering value to current customers and investing for the Group’s future strength and stability. We do this by making sure we get value for money from all of our investments and building a more efficient operations team to give even better customer service.
I’ll be supporting this strategy through detailed financial analysis and a willingness to challenge all expenditure in an equal way. I’ll keep an open mind and willingness to learn and analyse how best to re-engineer our operations, always from a customer perspective. My wide-ranging experience in finance, planning and strategy, management consultancy, corporate finance, risk management and prudential regulation will support me in doing this.
David Paige BSc, FCA
- Joined the Board in 2006
- A member of the Audit, Group Risk and Remuneration Committees and Chair of the Pension Trustees
- Currently non-executive director of Willis Ltd and the IFG Group Plc
- Previously held senior roles at Coopers & Lybrand and other senior roles at NatWest Bank, Zurich Financial Services, Aviva Plc and Royal & Sun Alliance Insurance Group
I believe that our members should have a consistently great experience, however they choose to contact us.
Whether it’s online, in our branches or talking to our head office teams, we aim to provide excellent customer service. We constantly monitor what our members think and how we compare to other organisations. I believe we have a responsibility to learn from this and to make sure we continue to improve.
The Remuneration Committee will continue to monitor our policy for rewarding colleagues on a combined individual and Group performance basis, whilst operating in line with regulatory requirements and our culture and values.
I believe that my many years working in an a major accountancy firm and also as a senior executive in the financial services sector, within the risk, finance and audit areas, means I’m well placed to constructively challenge and provide advice to the senior management team in these important business areas.
Mark Pain BSc, FCA
- Joined the Board in 2013
- A member of the Audit and Group Risk Committees. Mark will become Chair of the Audit Committee in April 2015
- Currently non-executive director of Aviva Insurance Ltd and the Spirit Pub Company Plc, Senior Independent Director at Johnston Press Plc and Chairman of London Square Developments (Holdings) Ltd.
- Previously held senior executive positions including roles at TSB, Abbey National Plc and Barrett Developments Plc
I strongly support the Group's profound and genuine desire to do what’s right for the customer.
The biggest challenge we now face is to grow and transform the business in a rapidly changing regulatory framework and operating the Group within the appropriate risk mandates and regulation whilst staying accountable to you, the owners of the Society.
I’ll continue to challenge the executive team to ensure we remain a strong organisation.
My focus will be on ensuring we continue to deliver financial stability for the Society.
I’ll be drawing on nearly 30 years’ experience in the financial services sector. In this time I’ve worked in a broad range of financial, strategic and operational roles. I’ll continue to use the expertise I’ve acquired to ensure the Society delivers on its promises to members, customers and our people, while remaining financially strong.
Guy Parsons BA
- Joined the Board in 2013
- Chair of the Remuneration Committee
- Currently non-executive director of heating manufacturer Warmup Plc, and Chairman of Commercial Services Kent Ltd and Nescot Consortium Services LLC
- Previously held senior positions with Travelodge and Whitbread Plc, including Managing Director of TGI Fridays
I believe the Group successfully manages risk, while maintaining its focus on our people and our members' interests as demonstrated by our industry-leading customer service scores.
The Society must continue to hold the funds to meet its obligations, and give our members the confidence that we remain a secure home for their savings. At the same time, we need to continue to simplify our back office processes, so that our teams have more time to focus on our members and their needs.
I'll challenge the executive team to make sure that as a multi-channel organisation, we’re easy to do business with, whether in branch, online or via social media.
My experience in the retail and hospitality sectors has taught me the importance of delivering exceptional customer service, by whatever channel our members choose to contact us, and just how important it is to have the right people to do this. In 2015 I’ll remain focused on continuing to attract and retain the best team for the Society. Through my role as Chair of the Remuneration Committee I’ll be able to offer support, scrutiny and advice in this area.
Chris Pilling MA
- Joined the Board in 2011
- Previously with HSBC in positions including Chief Executive of First Direct and latterly Head of Branch Network
- Previously held senior roles with ASDA and British Airways
- Currently a non-executive board member of The Department for Health
I am strongly committed to looking after our people, so in turn they are committed to you, our members.
We need to keep delivering great value and service to members in what continues to be a challenging economic environment. Our priority is to maintain our financial strength and sustainability whilst investing for our future – so that we can serve many future generations of members.
In this coming year I’ll lead the organisation to ensure we deliver for all our members across the country. I’ll also constantly strive to achieve our vision of being the most trusted provider of financial services in the UK.
With a career in some of the world's leading customer focused businesses I’ll draw on my commercial experience to strengthen our customer services, people management and risk control.
owned by you.
Here are some of our 2014 highlights:
150 years is well worth celebrating
That’s how long we’ve been bringing people together to grow their money or buy a home.
Saying hello to 51 upgraded branches
A better space for those important conversations and for our local teams to work in.
14 industry awards in 2014
We’re delighted the judges liked our products and service just as much as you tell us you do.
2,116 mortgage Best Buys and 869 savings Best Buys across the YBS Group
When we say we’re competitive we genuinely mean it.
Our savings rates are higher than the market average
We re-invest in better rates for our members, not dividends for shareholders.
Home is where the heart is
We helped over 22,000 people buy a home in 2014, including 8,000 who bought their very first one.
92% of you say you trust us
We keep your trust through how we behave, in good times and in bad.
We’re more recommended than most other financial services providers
Our net promoter score is among the very best in our industry.
10,000 hours of volunteering
You tell us what matters locally, and we’ll help support it with our time.
It’s all in a good cause
Donations to charities and local community causes totalled nearly £2m in 2014. By December 2016 we’re aiming to raise £500,000 for Marie Curie Cancer Care.
Welcoming over 1,000 new colleagues
As we attract new members and grow, we’re able to create new jobs in our communities.
In his final annual review, our Chairman Ed Anderson reports another year of strong performance and outlines how the Yorkshire Building Society Group is positioned for continued future success.
I'm delighted to report that 2014 has been another strong year for the Group. As the UK economy has strengthened, we've successfully achieved our priority of striking the right balance between maintaining our financial strength, providing excellent value and service to our members and generating sufficient profit to enable continued investment for the future.
Your Board leads the Group on your behalf to ensure its long-term success. The Group includes Yorkshire, Chelsea, Barnsley and Norwich & Peterborough building societies and Accord Mortgages, our intermediary lending subsidiary.
The Board's priorities are the Group's strategy and to ensure robust controls, processes and risk management practices are in place, in addition to monitoring the performance of the executive team. Together the directors provide all the skills and experience necessary to run a large organisation in the best interests of its customers and, in our case, members.
I announced in November last year that I will step down as your Chairman after the 2015 Annual General Meeting (AGM). I'm delighted that John Heaps, who joined the Board in November, is my successor. John has considerable experience in leading a large customer-focused organisation and delivering long-term strategies and I am confident that he will continue to take the Group forward successfully.
Mike Regnier was appointed to the role of Chief Commercial Officer and executive director in June 2014. Mike leads the Group's commercial activities, including product development and the customer experience.
Alison Hutchinson was appointed a non-executive director in February 2015. Alison brings additional IT and change programme skills to the Board and is a member of the Audit Committee.
Simon Turner retired from the Board in April 2014. Simon made an extremely valuable contribution to the Group over the last nine years, particularly in his role as Chair of the Remuneration Committee.
Philip Johnson will be retiring at the end of the 2015 AGM. In his eight years' service, Philip's depth of knowledge in the financial services industry and his role as Chair of the Audit Committee has been of great value.
I would like to record our thanks and appreciation to both Simon and Philip.
Further details about all your directors can be found in Your Easy Guide To Voting.
The success of the Group is only possible due to the enthusiasm, commitment and hard work of the Group's 4,600 people who strive to provide outstanding customer service in every area of the business. On behalf of the Board I thank the entire team for their performance.
It has been an immense privilege to have served as Chairman. The most enjoyable part of the role has been those times when I had the pleasure of meeting with members. These opportunities help us to understand what really matters to you and ensure that we remain a member-focused organisation. I am proud to leave the Society in such good shape and well placed to face future challenges, and I wish you all success for the future.
Chief Executive, Chris Pilling, shares highlights of the Group’s strong financial performance in 2014 and the outlook for the future.
Building on 150 years' experience of delivering member value
As a building society we are owned by our members, who are also our customers, and not external shareholders. This means that our core values remain the same as 150 years ago - to help people achieve financial security by providing a safe place for their savings and helping them to buy a home of their own.
We aim to offer consistently good long-term value and exceptional service to our members. To do this we do not look to maximise profits. Instead we aim to make no more than is necessary to maintain our financial strength and sustainability and to support our investment for the future.
We believe this approach matches the interest of our members. It means we are a genuine alternative to the banks and it supports our vision 'To be the most trusted provider of financial services in the UK'.
Our core value is to keep 'customers at our heart' in everything that we do. To support this we aim to:
- Be trustworthy- keeping our promises so people can rely on us when it counts most.
- Keep it personal- putting people first with humanity, decency, warmth and care.
- Be passionate - loving what we do today and sharing our ideas to make things better for tomorrow.
To succeed we focus on our five strategic priorities, which remain:
- To deliver a market leading customer experience built on empathy, simplicity and trust.
- To deliver products, processes and systems that are easy and simple to use.
- To be locally famous and meaningfully engaged in our communities.
- To attract and retain the best talent, with a leading people experience.
- To deliver sustainable financial performance that ensures real financial security for our customers, within our risk appetite.
Supporting the delivery of our strategic priorities, in 2012 we embarked on an ambitious investment programme. We invested £65m during 2014 on activities primarily aimed at improving our customer experience, people experience and making it easy and simple to do business with us. Details of each of the strategic priorities are set out below.
1. Customer Experience
Delivering value and rewarding loyalty, whilst continuing to invest in improving our service.
In 2014 we completed a record amount of mortgage lending, reflecting the considerable demand generated by our competitive mortgage products. Our mortgages featured consistently in national Best Buy tables, with over 2,1001 mentions during the year.
I’m delighted that we maintained our focus on supporting first time buyers by continuing to offer 5% deposit mortgages. In the year, 37% of all our house purchase mortgages were to first time buyers, providing funding to help more than 8,000 people get onto the housing ladder, the highest number in our history.
Our gross mortgage lending in the year was a record £7.6bn, 13% higher than the previous year, with mortgage balances growing by 9% to £32.2bn. This led to record mortgage growth of £2.6bn - 11%2 of the UK’s total net lending in the year.
For savers it was another tough year. The Bank Rate remained at a record low and the availability of cheap funding, such as the government’s Funding for Lending Scheme, reduced competition for savers’ deposits, driving down the average savings rate.
Whilst we’ve always tried to protect savers from the impact of low rates, it was necessary for us to take the difficult decision to reduce our average savings rate.
The way we did this shows how being a mutual makes a difference to how we maintain and reward the loyalty of our members:
- Our average savings rate was 1.60% compared to the market average of 1.34%3.
- We didn’t make any reductions to our children’s or regular saver accounts, to encourage a savings habit.
- We ensured that all customer savings accounts paid at least 0.50%. This meant that around 900,000 savers saw an increase in their rate.
- On a number of accounts, existing members benefit from a higher interest rate than those offered to new customers.
- To celebrate our 150th anniversary, we launched a children’s savings account paying 5% gross p.a./AER, which was only available to existing members.
In 2014 we achieved 8694 national Best Buy mentions for our savings products and we were pleased to open almost 200,000 new savings accounts. Our overall savings balances grew by 2.4% to £28bn in the year.
As part of our investment programme we have:
- Launched a consistent and contemporary new look, which unites the brands across the Group.
- Continued to invest in the branch network through our refurbishment programme, with a further 51 branches now offering a more modern and pleasant environment in which to do business.
- Embraced the opportunities presented through digital channels by investing in the services we provide, as detailed under the Easy and Simple section below.
We aim to provide an exceptional customer experience each time a member does business with us. We measure ourselves against this ambition in many ways, including:
- Net Promoter Score® (NPS) – this measures those customers who would recommend us against those who wouldn’t – and we’re pleased that we continue to significantly outperform our competitors, with a score of 40% against an average of just 3%5 for the financial services sector.
- Awards - we won a number of prestigious awards across the Group in recognition of the quality of our products and the service we provide to our customers.
- Complaints – a measure of how well we are serving our customers is the Financial Ombudsman Service overturn rate. The Ombudsman decided we had made the wrong decision on 7% of complaints referred to them by our customers, compared to an industry average of 57%6.
Placing ‘customers at our heart’ means if things go wrong we’ll always deal with them in a way that continues to focus on the best possible outcome for our customers.
In 2014 two issues came to a conclusion with a regulatory fine from the Financial Conduct Authority (FCA):
- Mortgage customers with payment difficulties – the FCA found that we didn’t promptly identify the cause of some customers' problems and establish their future financial prospects, and imposed a fine of £4.1m. Prior to the Regulator's action we voluntarily and proactively refunded all mortgage arrears administration fees charged since 2009, plus interest, deciding this to be the fairest approach for our customers.
- Promotion of structured deposits – the FCA found that the promotional material we had used for some structured deposit accounts that we previously offered fell short of the required standard and imposed a fine of £1.4m. Following this action all of the affected customers have been given the option to exit their account without charge and receive an appropriate rate of interest or retain their account until maturity, Again we believe this to be the fairest approach.
We agreed with the FCA on both these issues and sincerely apologise to the customers affected. All the costs associated with these actions have been fully provided for in our 2013 and 2014 financial accounts. As a consequence of these events, and to ensure that we do everything possible to prevent any similar situations occurring in the future, we’ve made a considerable investment in transforming our systems, increasing colleague training and developing our processes.
2. Easy and Simple
Developing our systems and processes to deliver member benefits
Delivering on our ambitious investment programme will create a modern business, fit for the fast-paced, digital world we live in, whilst retaining our strong commitment to face-to-face customer contact. The principal aim of this programme is to provide the best possible customer service, whichever channel a customer chooses to use.
In 2014 we delivered a number of projects, including some relating to regulatory changes, in addition to investing in building strong foundations for the future.
Key successes in the year include:*
- Delivered changes to our mortgage processes to provide better service and efficiency for our customers.
- Developed our online capabilities to enable us to better understand and meet customers' expectations, including a simpler online mortgage application process and a completely paperless ISA transfer process.
- Delivered a new online mortgage transfer process to enable customers to move to a new mortgage product at the end of a fixed rate period more easily.
- Enabled customers to reset their passwords using our website, with over 140,000 customers already registered for this easier and simpler service.
- Launched a new online customer forum to gain feedback on the Group and help shape the products and services we offer.
- Improved how we tackle e-crime, including increased colleague training in this area, to help ensure we can keep our customers' savings safe.
- Introduced a new complaints handling system to enable us to identify the causes driving complaints and subsequently improve customer service.
- Implemented the requirements of the new Mortgage Market Review (MMR) regulations, which ensure consistent and responsible practices across all lenders.
- Improved colleague communication and collaboration through the delivery of a single modern intranet, which provides easier access to information so we can better serve our customers.
3. Locally Famous
Increasing awareness of our Group and being meaningfully engaged in communities
Our 150th birthday in 2014 was a great opportunity for us to bring this strategic priority to life. Our heritage reminds us of the important role building societies should play in their local communities and we continue to do this in many ways:
- Charitable donations - £464,000 was donated to charities and good causes by our Charitable Foundation in 2014, with over £6m donated since it was launched in 1998. 91% of Charitable Foundation donations in 2014 were to causes recommended by our members.
- Community donations - £1.2m was donated primarily as a result of our popular affinity accounts. We also celebrated our 150th anniversary by sharing £150,000 between 15 charitable projects across the UK to fund projects that will leave a lasting legacy in their local community.
- Employee volunteering – our colleagues donated a record 10,000 hours, sharing their skills and time to support local community activities.
- Marie Curie – this fantastic charity was chosen by members and colleagues to benefit from our fundraising activities. We have set an ambitious target to raise £500,000 by the end of 2016 and are delighted to have already achieved over £200,000 towards this.
- Tour de France – we were able to demonstrate our pride in our Yorkshire roots as one of the main sponsors of the Grand Départ. The Tour de France, which travelled from Yorkshire to East Anglia and on to London, passed many of our branches enroute. Following this sponsorship, brand awareness for Yorkshire Building Society reached a record 83%7 in our Yorkshire heartland and peaked at 56%8 across the UK.
- Protecting the environment – we implemented a number of initiatives to help us reduce our waste and energy use across the Group, including the installation of 1,400 solar panels at two of our main office sites. These are expected to reduce our carbon dioxide emissions by 130 tonnes a year.
You’ll find more information on how we have supported the communities where our members live and work in the Societies Together section.
4. People Experience
Continuously finding ways to improve the engagement and expertise of our colleagues
Our people are vital for us to deliver an exceptional customer service. We continue our commitment to attract and retain the best talent and as part of this we are:
- Continue to review our management and remuneration policies and practices to ensure we optimise individual performance and rewards.
- Improving employee engagement and communications to ensure everyone understands our vision and strategy and the role they play in delivering these.
- Continuing to invest in our people through comprehensive training and development, with an average of 3.1 training days provided for each colleague in 2014.
- Providing a great working environment where our people can flourish through our branch and office refurbishment programme.
As well as recruiting externally to bring in new talent, our colleague development programmes have led to 31% of vacancies being recruited internally in 2014.
5. Financial Sustainability
Maintaining our financial strength and sustainability
We have delivered another year of strong financial performance, with solid capital and liquidity positions, prudent funding and stable profits. This sustainable performance continues to support our commitment to deliver long-term value to members and to continue with our investment programme. Our financial highlights, where all regulatory measures are comfortably above the required levels, include:
- Strong capital position maintained with a Common Equity Tier 1 capital ratio of 13.8% and a leverage ratio of 4.8%.
- Through efficient management, we maintained prudent liquidity balances at £4.8bn, to meet the needs of borrowers and savers and other commitments.
- Maintained a stable level of pre-tax profit at £188.2m and delivered a moderate increase in core operating profit9 to £178.9m.
- Successfully completed a number of wholesale funding transactions demonstrating market confidence in the Group.
- Achieved sustainable growth of £3.1bn with total assets increasing to £37.6bn.
- Continued a prudent approach to lending, with an overall average indexed loan-to-value of 50.9% and a reduction in mortgage arrears which remain below the industry average10.
- Cost to income ratio increased slightly to 58.6%, as we progressed our investment programme and delivered necessary regulatory changes.
In addition to delivering products and services to our members, we’re also active in some other profitable business areas, which are in line with our principal aims as a building society and support our financial sustainability. These include residential and buy-to-let lending through mortgage intermediaries and a small amount of commercial lending.
The executive team is mindful that there are risks and uncertainties which may impact the future financial performance of the Group. We therefore have robust systems of monitoring and control in place and we remain confident that we’re well placed to continue to succeed.
We’re delighted that the Group’s strong financial performance was recognised externally in 2014 with credit rating upgrades from both Moody’s Investor Service11 and Fitch12.
Outlook for 2015
Our financial strength means we are well positioned to invest in the future with confidence. In 2015 we’ll continue to focus on our strategic priorities and progress our investment programme, which will deliver many benefits to both existing and future members.
Over the past 150 years we have earned the trust of our members, who depend on us to keep their long-term interests at the heart of all that we do. We are confident that our mutual values and outstanding team - who have a passion for providing excellent customer service - together with our clear business focus, make us well placed to succeed and be the most trusted provider of financial services in the UK.
*Some of these changes have not been implemented across all our brands.
- Presswatch Financial from Kantar Media.
- Bank of England Interactive Database.
- Average rates based on Savings Stock from CACI’s Current Account and Savings Database (CSDB), currently covering 85% of retail savings market (based on stock value). Data as at 31 October 2014.
- Presswatch Financial from Kantar Media.
- Nunwood Consulting – 2014 Annual Customer Experience Excellence Survey of 7,500+ customers. Study was conducted in October 2014.
- Financial Ombudsman Service complaints data 1 January - 30 June 2014 resolved cases.
- YouGov Monthly Brand Tracker Study, July 2014
- YouGov Monthly Brand Tracker Study, September 2014
- Core operating profit measures longer-term underlying performance as it excludes non-core items such as timing differences that reverse over time or items of a one-off nature.
- Number of loans in arrears by more than three months 1.21% compared to the industry average of 1.39%. Expressed as a percentage of outstanding balances, including repossessions, Council of Mortgage Lender, as at December 2014.
- Moody’s Press Release, 13 March 2014
- Fitch Press Release, 24 September 2014
Our involvement in our local community goes far deeper than just our physical presence. We play an increasingly active role in the communities around us. Our activities include:
- Yorkshire Building Society Charitable Foundation - Set up in 1998 the Foundation has made over 20,000 donations.
- Small Change Big Difference® - Many of our members donate the pennies of interest from their account(s). Over the years this has added up to over £3m for good causes.
- Marie Curie - Our Hour of Need campaign is raising funds to provide much needed nursing care for terminally ill people and their families. Each £20 raised provides an hour of Marie Curie nursing time.
- Lasting Legacy Fund - To commemorate the Society’s 150th year we donated £150,000, which was shared between 15 charitable projects, selected by colleagues, customers and members of the public.
- Affinity partnerships - Thanks to our members supporting our Yorkshire Air Ambulance savings account we donated over £612,000. The RSPCA also received over £168,000.
During 2014 we continued our commitment to reducing the Group’s impact on the environment. We took substantial steps to:
- Reduce our energy consumption and associated carbon emissions.
- Improve our waste management practices.
- Encouraged colleagues to make sustainable travel choices, such as using our Liftshare Scheme.
Thanks to members voting at the 2014 AGM, we donated over £34,000 shared between Macmillan Cancer Support and Guide Dogs for the Blind.
We’ll continue to make a difference to people in our local communities, providing educational and specialist skills support, helping vulnerable people and fostering community spirit. We will also reduce further our environmental impact through our office refurbishment programme and carrying out regular energy savings audits in line with the Energy Savings Opportunity Scheme, which looks to reduce business energy costs.
Q: How safe is my money?
A: It’s important that we’re able to protect both you and the Group by remaining financially secure, particularly in challenging economic conditions.
We’re owned by you, not external shareholders. That means we can focus on generating sufficient profit to maintain our strong capital position, invest for the future and provide an exceptional customer experience for you, rather than creating profit for external shareholders.
Our liquidity levels are very healthy. Our liquid assets have to cover unexpectedly high levels of withdrawals by savers, or other unforeseen outgoings, and they remain safely above regulatory requirements.
Funding comes mainly from members’ savings rather than wholesale markets, with 85% of loans funded this way. Member savings balances grew by £0.9bn during 2014 – consistent with our long-term strategy.
Q: What are you doing to support borrowers – particularly first time buyers?
A: In 2014 we increased lending by 12.6% – helping over 22,000 people buy their own home.
For many, the biggest obstacle in getting on the property ladder is finding a large enough deposit. We continue to offer 95% mortgages using the same robust criteria we use before lending to any borrower, but tailored to the greater loan-to-value. By doing this we helped 8,000 first-time buyers realise their home ownership dream.
Although it’s a tough and fast-changing marketplace, the Group has continued to offer Best Buy products and we were delighted to receive a number of mortgage awards for our products and services.
Overall, competition for mortgage business increased significantly in the second half of 2014, as larger lenders returned to the market alongside newcomers. During this period, the market as a whole also slowed down, as lenders competed for market share.
Significant regulatory changes came into force during the year (the Financial Conduct Authority's Mortgage Market Review or ‘MMR’). We were fully prepared for this and continued to lend at record levels.
Q: What are you doing to support savers in light of the low Bank of England Bank Rate?
A: Savers continue to face low interest rates as the Bank of England Bank Rate stays at a record low.
We’re not immune to these challenging conditions. Our priority is delivering financial security and value to our members. This means pricing our products so we don’t attract more money than we’re able to sensibly lend to our borrowers. If we did, it would damage our financial strength.
Although we try to protect savers from the low interest rate environment, in 2014 we had to reduce our savings rates. We’ve consistently aimed to pay better than average savings rates across our range, with an average rate of 1.60% against the market average of 1.34%1.
We have however been able to increase rates in some cases. We've ensured that all variable ISA customers receive a minimum rate of 1.00%, and that all our customer savings accounts pay a minimum of 0.50%. We continue to offer value for savers wherever possible and achieved 8692 Best Buy mentions in 2014.
Q: How do you choose directors and how qualified are they?
A: The Board is constantly reviewed by the Chairman and the Board Governance and Nominations Committee to ensure the directors have the appropriate mix of skills and experience necessary to successfully run a large financial services organisation.
Executive directors are employed full time by the Group. They have specialist in-depth experience and as a team are responsible for the leadership of the Group. Non-executive directors are not employees and use their extensive knowledge and specialist skills gained from working in other organisations to provide independent judgement and to constructively challenge the executive team. This ensures decisions are taken in the best interests of our members.
Our rigorous recruitment process ensures we appoint the right people and our Regulators also have to approve the chosen candidate. All aspects of diversity are taken into account but appointments are ultimately based on merit and the skills and experience that the individual can bring. In 2013 the Board agreed an aspirational target to have 25% female directors by the end of 2015. This target will be met at the end of the 2015 AGM following the retirement of two of our non-executive directors. Inevitably, this figure will fluctuate over time depending on future appointments and retirements.
More details on all the directors that represent our members can be found in Your Easy Guide to Voting.
Q: How do you make sure members’ views are represented?
A: For us, member engagement is vital – and a core part of our culture. We‘re always looking for ways to improve what we do to reach our members and make sure we take their interests into account.
Voting at the AGM is just one of the ways to get involved. Another opportunity is our Member Question Time events, to which we invited 6,000 people in 2014. This is a great way to find out directly from senior management how we’re looking after members' interests. It’s also an opportunity for us to find out what really matters to our members.
In November 2014 we launched the online research community ‘My Voice’ to help us better understand what matters to members and give them the opportunity to share their views on a range of topics we'd like feedback on. There’s been no shortage of hot topics – for example the housing market, the importance of mutuality and what it means to be a member. So far we’ve invited 110,000 members to take part and we’ll continue to refresh the membership on a regular basis to encourage valuable feedback right across our brands.
Surveys also play a key role. We contact about 30,000 members each year through our customer experience and brand tracker initiatives to gauge their perceptions and learn how we can improve our products and services further.
Why are you investing in a new look? What benefit does it bring members – and what has it cost?
A: We sought member opinion prior to the rebranding project and found that, while members consider us approachable and friendly, they also saw our look as ‘old-fashioned’. We responded by developing and introducing a new contemporary design that also made the most of the promotional opportunities offered by our 150th anniversary and being a Tour de France supporter.
The new look is being rolled out across all our brands, so in the future each will fit in with the Group’s overall visual identity – a key benefit being to reassure members and customers that they’re part of a larger financial services organisation. For our colleagues, it also helps create a sense of belonging to one joined-up Group. New modern branding also benefits existing members because it helps us to build greater awareness, appeal to new customers and therefore grow. Spontaneous awareness of our brands at the end of 2014 was higher than at any point in our recent history.
As the rebranding came at the same time as branch refurbishments and a website redesign this enabled us to benefit from cost efficiencies. These activities are part of our on-going strategic investment programme.
Does your ongoing improvement to web and mobile technology make it more likely you’ll close branches in the future?
A: We strongly believe that online and branch services complement each other and that our members will continue to value a strong branch network. So in 2015 we’re planning to offer online booking for in-branch mortgage appointments.
We’ll continue to invest in our branches to provide a modern, pleasant and effective environment for our members and people. In 2014 we refurbished or refreshed 51 branches – including adding more private meeting rooms in response to customers' feedback.
As digital channels continue to increase in popularity, we remain committed to investing significantly to meet customer needs. For example, enabling members to easily re-set their passwords without calling an adviser and improving our online mortgage application process.
As you'd expect, we continuously review all aspects of the way we use face-to-face, phone and online methods to serve our customers in the way they prefer – making sure you can deal with us through your channel of choice.
- Average rates based on Savings Stock from CACI’s Current Account and Savings Database (CSDB), currently covering 85% of retail savings market (based on stock value). Data as at 31 October 2014.
- Presswatch Financial from Kantar Media.
- Nunwood Survey, customers either agree or strongly agree that we are an organisation they can trust, 7,191 members responded. October - December 2014.
This financial statement is a summary of information in the audited Annual Accounts, the Directors’ Report and the Annual Business Statement, all of which will be available to members and depositors free of charge at every office of Yorkshire Building Society, (including Chelsea, Barnsley and N&P branches) from 10 March 2015. The information is also available by clicking on the download link below.
Summary directors' report
The directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the going concern basis has continued to be adopted in preparing the Annual Report and Accounts.
Approved by the Board of Directors on 23 February 2015
Ed Anderson - Chairman
Lynne Charlesworth - Vice Chairman
Chris Pilling - Chief Executive
A special resolution has been proposed in Item 4 in the Notice of Meeting opposite to update the Memorandum of the Society. This note explains the alterations. A special resolution is a resolution that is put forward for consideration by members and will be passed if at least 75% of the members who vote, vote in favour of the resolution.
Every building society is required to have a Memorandum which sets out the activities that the building society can undertake.
The Society's Memorandum contains a prohibition on it giving a floating charge. This is in line with the statutory provisions of the Building Societies Act 1986. This statutory prohibition is in the course of being removed by Parliament so it can also be removed from the Society’s Memorandum.
Unlike a mortgage on a property which is a fixed charge, a floating charge can be given over certain other types of assets, such as treasury bills and other securities held for liquidity. The ability to create a floating charge would allow the Society to continue to deal with the relevant assets as it chooses unless there is a default by the Society. This would be particularly useful in relation to the Society’s treasury activities and could help reduce funding costs for the Society. The Board would only give a floating charge over some or all of the Society’s assets if it thought that this was in the best interests of members. A reference to an out of date section of the Companies Act 1985 is also being updated.
The proposed changes to the Society’s Memorandum are:
(i) in paragraph 4(a) delete “other than by the creation of a floating charge”;
(ii) in paragraph 7 in the definition “dispose (or disposing)”, delete “(except by way of floating charge)”; and
(iii) in paragraph 7 in the definition “parent undertaking”, delete “section 258 of the Companies Act 1985” and insert “section 1162 of the Companies Act 2006”.
It is intended that if the changes to the Memorandum are approved at the AGM, they will take effect on the later of 1 July 2015 or on the date they are registered by the Financial Conduct Authority (FCA). This will be after the statutory prohibition on the creation of floating charges has been removed by Parliament.
We are covered by the Financial Services Compensation Scheme (FSCS). The FSCS can pay compensation to depositors if a building society is unable to meet its financial obligations. Most depositors - including most individuals and small businesses - are covered by the scheme.
In respect of deposits, an eligible depositor is entitled to claim up to £85,000. For joint accounts each account holder is treated as having a claim in respect of their share so, for a joint account held by two eligible depositors, the maximum amount that could be claimed would be £85,000 each (making a total of £170,000). The £85,000 limit relates to the combined amount in all the eligible depositor’s accounts with the building society, including their share of any joint account, and not to each separate account.
Yorkshire Building Society (YBS) also operates under the trading names of Barnsley Building Society (BBS), Chelsea Building Society (CBS), Norwich & Peterborough Building Society (N&P) and Egg. YBS is a participant of the FSCS. Therefore, depositors with any of YBS, BBS, CBS, N&P and Egg have an overall limit of £85,000 under the FSCS.
Accord Mortgages Limited is a wholly owned subsidiary of YBS. Accord has offset mortgage products where the customer’s deposits are held on behalf of Accord by YBS. Accord offset depositors are therefore also covered, (along with BBS, CBS, N&P and Egg depositors) by YBS being a participant in the FSCS. There is no additional protection for depositors with Accord Mortgages Limited.
For further information about the compensation provided by the FSCS (including the amounts covered and eligibility to claim) please call the numbers below, ask at your local branch, refer to the FSCS website www.FSCS.org.uk or call the FSCS on 0800 678 1100. Please note only compensation related queries should be directed to the FSCS.
0845 1200 100* - Yorkshire account holders
0845 1200 898* - Barnsley account holders
0845 744 6622* - Chelsea account holders
0845 300 2511* - N&P account holders
Ed Anderson BSc, CPFA
- Joined the Board in 2003
- Member of the Board Governance and Nominations Committee
- Chairman of the Airport Operators Association, member of the Council of the University of Leeds, non-executive director of Opera North and High Sheriff of West Yorkshire 2015-2016
- Previously held senior executive roles including Managing Director of Leeds Bradford Airport and Executive Director at Leeds City Council
I am proud to have served the Society as a Board member since 2003, and its Chairman since 2007. I will be stepping down from the Board after the AGM on 21 April 2015.
I will do so confident that the Society’s finances are strong, and that it places the needs of customers at the heart of everything it does.
I believe the Group is well positioned to face the future, whatever challenges it may hold, and achieve its ambition of being the UK's most trusted financial services provider.
Philip Johnson FCA
- Joined the Board in 2007
- Chair of the Audit Committee
- Currently a member of the Audit Committee of the Wellcome Trust, a member of the Standing Advisory Group of the Public Company Accounting Oversight Board in the USA, and a non-executive director of Lakeland Ltd
- Previously a partner at Deloitte LLP
After eight years I shall be retiring from the Board after the AGM on 21 April 2015.
I’m proud to have been a director of the organisation during such a period of growth and change. My background and my engagement in the audit and financial reporting standard setting process, in Europe and the United States, during my time on the Board, has proved extremely valuable as Chair of the Audit Committee.
I would like to wish my colleagues and members continued success for the future.
Summary directors' remuneration
This report is a summary of the Directors' Remuneration Report which is contained in the 2014 Annual Report and Accounts. It sets out the remuneration for the Group’s executive and non-executive directors in 2014, and details the proposed annual bonuses for executive directors in respect of performance in 2014. The Annual Report and Accounts are available from any of our branches, online at ybs.co.uk/annualreport or by contacting us.
The Annual General Meeting (AGM) of Yorkshire Building Society will be held at 2.30pm on Tuesday 21 April 2015 at the Midland Hotel, Forster Square, Cheapside, Bradford BD1 4HU for the following purposes:
1.To receive the Directors’ Report, the
Annual Accounts, the Annual Business
Statement and the Auditor’s Report for
the year ended 31 December 2014.
We’ve included a summary financial statement here. For a full copy of the 2014 Annual Report and Accounts, call in to your local branch, click here or use the contact details on the letter.
2.To approve the re-appointment of
Deloitte LLP as auditor of the Society to
hold office until the conclusion of the
next Annual General Meeting.
To comply with legislation, the Society’s members have to appoint an auditor each year.
3.To approve the Directors’
Remuneration Report for the year ended
31 December 2014.
This is an advisory vote. You'll find an explanation of this and a summary of the Remuneration Report here. There’s also a full version in the 2014 Annual Report and Accounts.
4. To approve changes to the Society’s
Details of the proposed changes can be found here.
Election and re-election of directors
5. To elect John Robert Heaps
6. To elect Alison Elizabeth Hutchinson
7. To elect Michael Charles Regnier
8. To re-elect Katharine Mary Barker
9. To re-elect Ian Jeffrey Bullock
10. To re-elect Andrew Mark Caton
11. To re-elect Lynne Frances Charlesworth
12. To re-elect Robin James Churchouse
13. To re-elect David Victor Paige
14. To re-elect Mark Andrew Pain
15. To re-elect Guy Paul Cuthbert Parsons
16. To re-elect Christopher John Pilling
Click here to find out more about our directors.
All directors are standing for election or re-election with the exception of Ed Anderson and Philip Johnson who both retire at the conclusion of the AGM and are not seeking re-election.
Having formally evaluated their performance, the Board considers that those directors seeking re-election continue to be effective and that they demonstrate the necessary commitment to the role.
By order of the Board
Ann L FitzPatrick, Group Secretary
23 February 2015
Notes about voting:
Voting by post or online means that you are appointing someone else (known as your proxy) to attend the AGM and vote on your behalf. You can tell your proxy how to vote on each resolution when you complete the voting form or vote online. Your proxy does not have to be a member of the Society.
Completed voting forms must be received by the Society’s scrutineers by 5pm on Friday 17 April 2015. For further information on how to vote, see Your Easy Guide To Voting, and your voting form.
If you have any queries, please call or email using the details in the Contact Us section.
These notes form part of the Notice of Meeting.
Directions to Yorkshire
Building Society Annual
|Date||Tuesday 21 April 2015|
|Location||Midland Hotel, Forster Square, Cheapside, Bradford BD1 4HU|
|Time of meeting||2.30pm|
|Registration desk opens||1.30pm|
Just bring your letter from the Chairman (or your passbook or recent statement) with you as a proof of membership.
Easy access facilities are available at the venue
For any AGM queries, please call the number in the Contact Us section
Bradford Forster Square station is only 200m away and Bradford Interchange is a short 15 minute walk from the hotel.
The hotel is located in the centre of Bradford and is served by a number of bus routes.
For bus times visit:
The hotel is 3 miles from the motorway network. From the M62, take junction 26, joining the M606 which will bring you to Bradford. Then follow directions to the city centre. There are several public car parks available as indicated on the map.
Please check our Your Questions Answered page before contacting us, to check if your query/question has already been answered.
Yorkshire Building Society and Barnsley Building Society account holders
For your AGM queries
Call 0845 1200 888*
Chelsea Building Society account holders
For your AGM queries
Call 0845 7446 622*
Norwich & Peterborough Building Society account holders
For your AGM queries
Call 0845 1282 822*