2015 Financial Results

Yorkshire Building Society Group has today announced a strong financial performance in 2015 as it continues to provide a trusted alternative to the big banks.

The UK's second largest building society achieved a record core operating profit of £185m and further improved its strong capital position while continuing to invest in the business and deliver significant improvements for customers.

During a year when competition in the mortgage and savings markets further intensified, the Group continued to help thousands of people to buy their own homes with gross mortgage lending totalling £6.9bn, and to save for their futures with over 160,000 new savings accounts opened.

2015 Annual Results key highlights

  • Achieved a strong financial performance, with a record core operating profit of £185m (2014: £179m) and profit before tax of £173m (2014: £188m)
  • Improved capital position as Common Equity Tier 1 capital ratio rose to 14.5% (2014: 13.8%)
  • Retained a healthy leverage ratio of 5.0% (2014: 4.8%), well above the expected minimum requirement of 3.0%
  • Continued to support borrowers through competitive mortgages, achieving 3,009 mortgage best buys1 (2014: 2,114)
  • Maintained good value savings rates, paying an average of 1.40% (2014: 1.60%) against a market average of 1.21%(2014: 1.34%)
  • Achieved average Net Promoter Score®3 of 29%4 , significantly better than the industry average of 8%5
  • Ranked in the top three most trusted financial services providers in the UK for most of the year6
  • Delivered excellent levels of customer service, achieving 27th position for customer experience out of 272 UK brands7

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

I am happy to report another strong set of financial results and am pleased with our achievements during what has been a challenging and competitive year in the financial services industry.

Interest rates have remained at historically low levels for mortgages and savings customers and competition within the market has become even more intense. As a result, during the year we proactively reduced our lending and funding targets to reflect our commitment to long-term financial sustainability whilst continuing to offer extremely attractive mortgage and savings products. This included launching our lowest ever fixed rate mortgage and helping customers save for their futures with the opening of 166,000 new savings accounts.

Our commitment to put customers at the heart of everything we do continued to help us work towards our vision of becoming the UK’s most trusted provider of financial services. Not only did we retain our position in the country’s top three most trusted financial service providers for most of the year, we reached 27th in a national customer experience survey of nearly 300 UK consumer brands, having improved 38 places in the past three years.

Our significant investment programme, which we launched in 2012, is aimed at further enhancing our systems, products and branch and head office sites and will deliver sustainable benefits for our customers and our people. To date, we have refurbished 73 branches, streamlined a series of key processes to make life easier for customers and made a number of improvements to our digital channels giving quicker and simpler access to our services.

As part of these developments we have recently announced plans for the future of our branch network which will create more flexibility and choice for our members nationally whilst delivering greater efficiencies.

We do not expect the competitive environment to become any less intense this year but we are well placed to face these challenges and make the most of the opportunities in the year ahead. By focusing on our mutual values, we will continue to maintain the right balance between delivering financial strength and security, providing great value and excellent service to our members and investing in the business for future growth and success.

2015 Annual Results highlights

Achieving sustainable performance and real financial security

  • Increased total assets to £38.2bn (2014: £37.6bn)
  • Increased total capital ratio to 16.8% (2014: 16.1%)
  • Generated a Common Equity Tier 1 capital ratio of 14.5% (2014: 13.8%) and leverage ratio of 5.0% (2014: 4.8%)
  • Maintained liquid balances comfortably above regulatory requirements at £4.4bn (2014: £4.8bn)
  • Achieved a strong financial performance, with a core operating profit of £185m (2014: £179m) and profit before tax of £173m (2014: £188m)
  • In line with our strategic plan, and supporting investment in the business, delivered net interest margin of 1.41% (2014: 1.52%) and interest income of £535m (2014: £549m)
  • Achieved gross lending of £6.9bn (2014: £7.6bn) and net lending of £1.1bn (2014: £2.6bn)
  • The number of accounts in arrears by more than three months (including possessions) reduced to 0.96% (2014: 1.21%) reflecting the high quality of lending by the business
  • Completed three public bond issues as part of our continued wholesale funding strategy, demonstrating market confidence in the Group

Delivering a market-leading customer experience

  • Helped 6,300 customers take the first step on the property ladder; 37% of house purchase loans last year were to first-time buyers
  • Offered range of competitive savings accounts to customers, with 166,000 new savings accounts opened
  • Improved bereavement process to focus on supporting our customers at such a difficult time
  • Continued significant investment programme with 73 branches refurbished since 2012, creating a more modern environment for members and colleagues to do business
  • Distributed lending in a diversified way, supporting small and medium size enterprises, registered social landlords and buy-to-let investors
  • Improved complaints process with the number of complaints per 1,000 customers reducing to 1.08 (December 2014: 1.50)
  • Won 16 industry awards for mortgages, current account and charitable support, including Best Building Society Mortgage Provider (Consumer Moneyfacts Awards 2015), Challenge Event (Third Sector Business Charity Awards) and Best Debit Card for Use Abroad (Moneynet Personal Finance Awards 2015)

Making things easy and simple for our colleagues and customers

  • Launched new online service enabling customers to see mortgage advisor availability at their preferred branch location and directly book appointments
  • Created ability for mortgage applicants to receive indicative Decision in Principle online in just 10 minutes
  • Developed portable mortgage Decision in Principle service helping customers switch easily between branch, telephone and online channels; used by over 10,000 customers
  • Added social media to our customer channels, providing more engagement opportunities and a quicker way of getting member feedback
  • Refreshed our development centre that supports colleagues with training and development opportunities, delivering 30,000 training days
  • Introduced new internal recognition tools including annual awards which saw 850 colleagues across the Group nominated for their commitment to our values

Making a positive impact on communities

  • Raised £613,000 for Marie Curie (£824,000 since June 2014), funding more than 30,000 hours of nursing care and exceeding the original target of £500,000 one year early
  • Yorkshire Building Society Charitable Foundation donated £390,000 to charities and good causes, largely funded by members taking part in the Small Change Big Difference™ scheme, including making donations to flood affected areas
  • Donated over £1.6m based on savers’ affinity account balances to charities and local clubs
  • Contributed almost 12,000 hours of volunteering support as more than 1,600 colleagues helped local charities, schools and community groups
  • Increased focus on sustainability and environment including recycling 100% of paper waste across the Group
  • Generated 300,000 kWh of electricity, and reduced our overall electricity consumption by around 2% via more than 1,300 solar panels at our offices in Bradford and Peterborough.
  • Reconciliation of Core Operating Profits
  • Group Income Statement for the year ended 31 December 2015
  • Group Statement of Comprehensive Income for the year ended 31 December 2015
  • Group Statement of Financial Position as at 31 December 2015
  • Key ratios



1 Presswatch Financial from Kantar Media

2 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 2015

3 The way NPS® is measured changed during 2015 so comparable 2014 NPS® data is unavailable

4 Nunwood Customer Voice Programme, 12 month score, January to December 2015, based on interviews with 28,329 customers

5 Nunwood Consulting - Nunwood Customer Experience Excellence Centre Top 100 UK Brands 2015

6 YBS Brand Tracker, conducted by YouGov

7 Nunwood Consulting - Nunwood Customer Experience Excellence Centre Top 100 UK Brands 2015

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.