2014 Interim Results

Yorkshire Building Society has today announced a very strong first half performance for 2014, increasing core operating profit by 30% and new lending by 50%, providing almost one-fifth of UK net mortgage lending in the period1.

In its 150th anniversary year, the UK’s second largest building society has continued to deliver on the aims for which the organisation was first established by helping people to save for the future and buy their own home.

It has also remained true to its community values by creating almost 200 new jobs and establishing a major new charity campaign in aid of Marie Curie Cancer Care.

2014 Interim Results Key Highlights

  • Strong financial performance: core operating profit of £107.5m, up 30% (June 2013: £82.6m), and pre-tax profit £117.1m, up 71% (June 2013: £68.3m restated)
  • Increased support for borrowers: £3.7bn gross lending in the first six months of the year, up 50% (June 2013: £2.5bn), and net lending of £1.3bn, up 179% (June 2013: £450m)
  • Total mortgage balances of £30.8bn (December 2013: £29.5bn), with 94% of mortgages funded by savings balances and reserves (December 2013: 97%)
  • Retained one of the strongest capital positions among UK financial services providers: Common Equity Tier 1 capital of 13.6% (December 2013: 13.9%)2 and leverage ratio of 4.5% (December 2013: 4.6%)
  • Ensured customers remain happy with our service: achieved an average Net Promoter Score of 42% (December 2013: 37%)3 compared to an industry average of -1%4
  • Provided range of competitive savings accounts to customers: 100,000 savings accounts opened across the Group, up by 29% (June 2013: 77,800)

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

These exceptional results reflect our ongoing success as a business which proudly puts mutual values at its core.

Our 150th anniversary has been a terrific opportunity for everyone associated with the Group – colleagues and customers alike – to reflect on how we have maintained our fundamental purpose at the same time as growing as an organisation.

Achieving good levels of profit allows us to continue to invest in the future of the Group and make our offer to customers even stronger, for example ensuring a smooth transition to comply with the new Mortgage Market Review (MMR) rules with fully trained advisers available across our branch network and via our telephone contact centre.

We have also successfully delivered in our core business areas – completing more than 16,000 mortgages, opening more than 100,000 savings accounts at a time of historically low interest rates, growing the N&P current account customer base and continuing to provide no-obligation financial advice for all across our branch network.

It was fitting that we marked our ‘sesquicentennial’ by becoming an official supporter of the Tour De France’s Grand Départ in Yorkshire earlier this month. It was a wonderful occasion for the region and one which helped to significantly raise the Group’s profile, with millions lining the route and billions watching on television.

Being involved in something as big as the Grand Départ reflects the ambition and size of the business we have become, which is one reason we unveiled new branding for the Group as part of our ongoing investment programme. Fresh logos have been created across all brands to emphasise that we form a single, cohesive and substantial organisation which plays a significant part in people’s lives across the whole of the UK.

The positive effect we can have on local communities is reflected in our support for charities and good causes and we have recently launched our most ambitious fundraising drive. We have set a target of raising £500,000 for Marie Curie Cancer Care by December 2016 through our Hour of Need campaign. Every £20 will fund one hour of care and raising enough to pay for 25,000 hours of vital support will be an incredible achievement and one I am confident we will rise to.

We remain as committed to our members today as the founders of the Society from which we trace our roots 150 years ago. It is a proud heritage and one which we intend to enhance further in the coming years.

2014 interim results highlights

Delivering an award-winning customer experience

  • Achieved 1,104 best buy mortgage mentions and 709 best buy saving account mentions across the Group5
  • Average savings rate of 1.79%, continuing to remain higher than the industry average (1.51%)6
  • Provided support for those getting on the housing ladder, with 38% of house purchase mortgages taken out by first time buyers, including those with 5% deposits
  • Continued to help borrowers make their money go further by providing 34% of all UK offset mortgages7
  • Maintained support for small and medium sized enterprises through provision of commercial mortgages, with gross lending totalling £62.8m (June 2013: £32.2m)
  • Earned a total of 12 industry awards across the Group for mortgages, savings and current account including First Time Mortgage Buyers Choice (Consumer Moneyfacts), Best Regular Savings Account Provider (Savings Champion) and Best Debit Card for Use Abroad (Moneynet)
  • Further increased the number of N&P current account customers, as well as being shortlisted for a Which? Award.

Achieving sustainable financial performance

  • Increased market share of gross lending to 3.9% (December 2013: 3.8%)8
  • Grew net lending market share to 18.6% (December 2013: 17.4%)9
  • Group average indexed loan to value of 53% (December 2013: 54%)
  • Asset quality remains strong, with the number of loans in arrears by more than three months at 1.28% (December 2013: 1.38%), below the industry average of 1.59%10
  • Total asset base of £35.9bn (December 2013: £34.5bn)
  • Made provision of £12.7m to cover customer redress and conduct issues, including recent Financial Conduct Authority review of certain Structured Deposit accounts
  • Became the first UK building society since 200711 to receive an upgrade of its Moody's deposit rating, moving to Baa1
  • Liquidity position comfortably above regulatory requirements with balances increased to £4.6bn (December 2013: £4.4bn)
  • Re-entered the wholesale senior unsecured debt and Euro covered bond markets with two highly successful public issues totalling €1.1bn
  • Achieved efficient use of funding, leading to increased net interest margin of 1.57% (June 2013: 1.23%).

Making it easy and simple for our customers

  • Ensured a smooth transition to comply with the Mortgage Market Review (MMR) regulations by having changes required in place a month before the deadline date
  • Introduced new branding which unites all parts of the Group and helps new and existing customers understand the benefits of being part of a larger organisation
  • Made improvements to 48 branches, with 87 more due to be refurbished by the end of the year
  • Introduced uniforms for colleagues across branches of the Yorkshire, bringing them in line with our other building society brands.

Offering a leading experience for our people

  • Continued the refurbishment of our principal office in Bradford to provide modern working environment for approximately 800 colleagues, with 700 more due to move in by the end of the year
  • Created 192 new jobs, taking the total number of employees to 4,525 (December 2013: 4,333)
  • Completed almost 13,000 days of colleague training and development
  • Maintained our Investors in People status, reflecting our good people management practices.

Making a positive impact on our communities

  • Won a Gold award at the International CSR Awards for charity support
  • Donated £1,179,748 to more than 320 different charities and local good causes, including £896,000 from contributions based on savers’ affinity account balances and £133,000 from our Charitable Foundation, which is in majority funded by the Small Change Big Difference® scheme
  • Over 90% of the Charitable Foundation donations were nominated by members
  • Total of 2,684 employee hours spent volunteering with charities, local schools and good causes in the communities where we are based.


Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.

  • 1 Source: Bank of England: Monthly changes of total sterling net secured lending to individuals and housing associations.
  • 2 Following the introduction on 1 January 2014 of Basel III, which is a global regulatory standard on the capital adequacy of financial institutions, Common Equity Tier 1 replaced Core Tier 1 as the key measure of capital strength.
  • 3 Source: Nunwood. Net Promoter Score refers to the net percentage of customers who, when responding to the question ‘how likely are you to recommend us to friends and family’ would either strongly recommend or strongly detract from the organisation.
  • 4 Source: Nunwood Customer Excellence 2013 rankings – a national annual survey of 7,500 UK consumers conducted in October 2013.
  • 5 Source: Presswatch Financial from Kantar Media between 1 January and 30 June 2014.
  • 6 Source: Average rates based on Savings stock from CACI’s Current Account and Savings Database, currently covering 85% of retail savings market. Data as at 31 March, 2014.
  • 7 Source: Based on those UK lenders writing offset mortgages that contribute to the CACI Mortgage Market Database, which covers 94% of the UK residential mortgage market. Data based on new mortgages by volume between 1 January to 30 April 2014.
  • 8 Source: Bank of England as at 31 May 2014.
  • 9 Source: Bank of England: Monthly changes of total sterling net secured lending to individuals and housing associations.
  • 10 Source: Council of Mortgage Lenders for Q1 2014.
  • 11 Excluding upgrades due to takeovers or mergers