2013 Financial Results

Group achieves record levels of profit before tax and record gross lending as it enters its 150th year of delivering the benefits of mutuality to borrowers and savers

The UK’s second largest building society achieved core operating profit of £152.0m and record profit before tax of £199.3m at the same time as delivering tangible improvements for customers through investment in products and services.

Gross lending reached a record £6.8bn, up 48%, and net lending more than trebled to £2.0bn as the Group moved into its 150th year of supporting people, including first time buyers, to buy the home they want.

2013 Annual Results Key Highlights

  • Achieved strong financial performance which is sustainable over the long-term: core operating profit £152.0m (11% increase on 2012: £137.2m)
  • Delivered profit before tax of £199.3m1 (26% increase on 2012: £158.1m) while continuing to invest in the business
  • Maintained one of the strongest capital adequacy ratios among any UK financial services provider: Core Tier 1 capital ratio: 13.9% (2012: 13.7%)
  • Kept a healthy leverage ratio of 4.6% (2012: 4.8%), illustrating our continued security as a financial services provider
  • Continued to provide support for borrowers: gross lending: £6.8bn (48% increase on 2012: £4.6bn) and net lending: £2.0bn (222% increase on 2012: £612m)
  • Protected savings rates, with an overall average interest rate on our accounts a competitive 2.00%, compared to the market average of 1.72%2
  • Voted Most Trusted Financial Provider in survey of more than 20,000 consumers3

Chris Pilling, Yorkshire Building Society Group’s Chief Executive, said:

I am delighted to present an outstanding set of financial results for the Group and am very proud of our achievements in 2013.

It is 150 years since the building society from which the Yorkshire traces its roots was established and our financial performance and prudent approach in 2013 demonstrates we are still delivering on the promise of giving customers a trustworthy alternative to the banks.

We lent £6.8bn in 2013 and helped thousands of home buyers and remortgage customers by offering more best-buy mortgages than any other provider4. That included our lowest ever fixed rate mortgage and support for first time buyers by launching the biggest range5 of 5% deposit mortgages available in the UK.

As well as providing competitive mortgages, we also worked hard to offer our members a range of strong savings accounts at a time when interest rates remain at a historic low. We have sought to reward the loyalty of our members during necessary rate reductions, as well as protecting rates on regular saver and children’s accounts.

We have seen encouraging levels of interest in our face-to-face financial advice service which is available to all at a time when many other financial providers have introduced harsh minimum investment limits or withdrawn services completely.

The first 12 months of our previously announced investment programme have laid the foundations for further improvements in the coming years and already delivered tangible benefits for customers, including the launch of our 95% LTV mortgages, a major upgrade to our online and mobile services and refurbishments to 26 branches.

Our capital and liquidity positions remain very strong and our overall financial performance puts us in an excellent position to maintain our growth as an organisation, which now includes our new office in the centre of Leeds in addition to our sites in Peterborough, Cheltenham and our principal office in Bradford where a significant refurbishment is underway.

Over the past 150 years we have earned the trust of customers and communities who rely on us to keep their long-term interests at the heart of what we do and I am honoured to lead my colleagues in continuing to work to those values.

2013 highlights

Delivering an award-winning customer experience

  • Received more best buy mortgage mentions than any UK financial services organisation at 3,184, a 33% increase on 2012 (2,399)6
  • Achieved 1,232 savings best buys, a 51% increase on 2012 (816)7
  • Maintained one of the best customer advocacy levels within UK financial services with a Net Promoter Score® of 37%8 compared to an industry average of -1%9
  • Earned a total of 12 industry awards across the Group for mortgages, savings and current account provision, including Best Debit Card for Use Abroad (Moneynet), High Street Savings Provider of the Year (Consumer Moneyfacts) and UK’s Best Building Society (Personal Finance Awards)
  • One in four direct mortgages are offset, helping borrowers to reduce the term of their mortgage or lower their monthly payments by linking to their savings
  • First time buyers comprised 36% of all house purchase mortgages and gross lending above 85% loan to value rose by 38% to £675m (2012: £490m)
  • Supported small and medium sized companies in our communities through continued provision of commercial mortgages, with gross lending rising 48% to £88.5m (2012: £60m)
  • Continued proportionate and prudent growth of intermediary and buy to let lending through Accord Mortgages, in addition to lending in social housing markets
  • Significantly improved our complaints processes and experienced only 6% of complaints from customers being upheld by the Financial Services Ombudsman compared to an industry average of 64%10.

Achieving sustainable financial performance

  • Record market share of gross lending at 3.8% (2012: 3.2%)11
  • Record market share of net lending at 17.4% (2012: 8.1%)12
  • Mortgage balances increased by 7% to £29.5bn (2012: £27.6bn)
  • Group average indexed loan to value: 54% (2012: 55%)
  • Asset quality remains strong with the percentage of retail mortgages with arrears of three months or more falling to 1.57% (2012: 1.69%)13
  • Total asset base of £34.5bn (2012: £33.5bn)
  • Continued efforts to efficiently manage liquidity resulted in prudent levels of high quality liquidity well above the regulatory minimum requirement: liquidity ratio 13.7% (2012: 16.9%)
  • Savings balances and general reserves account for 96.7% of mortgage lending (2012: 104.7%)
  • Approximately 89% of savings balances earn more than the official Bank Rate and achieved a 2.2% share of household savings market (2012: 2.3%)14
  • Increased net interest margin to 1.56% (2012: 1.05%)
  • Stable ratings from all external ratings agencies.

Making it easy and simple for customers

  • Reintroduced mortgage advisers across the Norwich & Peterborough branch network to provide members with face-to-face advice throughout the mortgage process
  • Expanded our high street presence by opening three new branches, in Ripon, Wetherby and Yeadon, and increasing our agency network
  • Carried out improvements to 26 branches, including launching a new concept branch in Harrogate based on design input from customers
  • Modernised our websites and improved access for mobile and tablet users
  • Engaged personally with members through a variety of channels including a series of Question Time events with directors and senior management and regular surveys of our 9,000-strong member panel
  • Widened the benefits of employee ownership through YBS Share Plans with an additional 94,000 accounts opened at businesses across the world

Offering a leading experience for our people

  • Relocated more than 800 colleagues to our new Broad Gate office in the centre of Leeds and introduced ‘smart’ working to help ensure colleagues achieve a good work-life balance
  • Began significant refurbishment of our principal office in Bradford to create a modern working environment for operational colleagues, the first significant investment in the site in 20 years
  • Increased the workforce of the organisation by 222 to 4,333 (2012: 4,111)
  • Completed more than 38,500 days of colleague training and development, an average of more than eight days per colleague.

Being locally famous and making a difference in our communities

  • Won three awards for community and charity support, including Gold Winner for Community Commitment at the International CSR Excellence Awards
  • Donated £1.2m to charities, good causes and community groups, including:
  • £540,000 from the Yorkshire Building Society Charitable Foundation
  • £154,000 donated to Charity Partner, the RNLI, which led to the Group being named its Corporate Supporter of the Year
  • More than £490,000 donated to external organisations through contributions based on savers’ affinity account balances
  • Total of 2,884 community causes across the UK supported through charitable giving projects including Make A Difference (MAD) Week and Charity Choices
  • More than 76,000 new accounts joined the Small Change Big Difference® scheme in 2013, taking the total of active accounts to more than 800,000
  • Colleagues volunteered more than 9,000 hours to local projects via the Group’s Actionteering scheme.


  • Reconciliation of Core Operating Profits
  • Group Income Statement for the year ended 31 December 2013
  • Group statement of comprehensive income for the year ended 31 December 2013
  • Group statement of financial position as at 31 December 2013
  • Key ratios



1 This includes a number of significant non-core items that are detailed in the reconciliation of core operating profits (see Appendix 1)
2 Source: Average rates based on Savings stock from CACI’s Current Account and Savings Database (CSDB), currently covering 86% of the retail savings market. Data as at the last working day of October 2013.
3 Source: Moneywise Customer Service Awards 2013
4 Source: Presswatch Financial from Kantar Media
Source: Moneyfacts Analyser, November 2013
6 Source: Presswatch Financial from Kantar Media
Source: Presswatch Financial from Kantar Media
8 Source: Average of monthly Nunwood Customer Experience Survey of Group customers 
9 Source: Nunwood Customer Excellence 2013 rankings — a national survey of 7,500 UK consumers conducted in October 2013.
10 Source: Financial Ombudsman Service complaints data 1 January — 30 June 2013 resolved cases.
11 Source: Council of Mortgage Lenders: Lending secured on dwellings 2013
12 Source: Bank of England: Monthly changes of total sterling net secured lending to individuals and housing associations
13 Expressed as a percentage of outstanding balances, including repossessions
14 Source: Bank of England household savings data

Small Change Big Difference® is a registered trademark of Yorkshire Building Society. Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain &Company, Inc., and Fred Reichheld.