2015 Interim Results

Yorkshire Building Society has today announced a good first half performance for 2015, increasing core operating profit by 7.8%, raising mortgage balances by more than £600m and helping 3,386 first-time buyers to get on the housing ladder.

The UK’s second-largest building society has remained true to its mutual values, helping people save for the future and buy their own home through offering competitive rates, including some of the lowest mortgage rates available to UK borrowers.1

Yorkshire has also continued to play a key role in supporting the communities in which it operates by creating new jobs and pledging to help 150 young people over the next five years to start their careers through a new apprenticeship programme.

2015 Interim Results Key Highlights

  • Good financial performance and continued investment in the business: core operating profit of £115.9m (7.8% increase on June 2014: £107.5m), and profit before tax of £111.2m2 (5% decrease on June 2014: £117.1m).
  • Growth in mortgage and savings book: mortgage balances up more than £600m to £32.8bn (December 2014: £32.2bn) and savings balances up more than £200m to £27.5bn (December 2014: £27.2bn).
  • Retained one of the strongest capital positions of UK financial services providers: common equity tier 1 capital of 14.3% (December 2014: 13.8%) and a leverage ratio of 4.9% (December 2014: 4.8%).
  • Strong liquidity position: balances increased to £5.2bn (December 2014: £4.8bn) with levels comfortably above regulatory requirements.
  • Retained status as one of the UK’s most trusted financial services providers: ranked by our members in the top three most trusted financial services providers nationally.3

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

I’m pleased Yorkshire Building Society Group’s robust financial strength has once again been demonstrated through our performance in the first six months of 2015.

We have continued to deliver on the goals and aims that our organisation was originally established to achieve, which we remain true to today – helping people to become homeowners and save for their futures. We have performed well in our core business areas, completing 15,430 mortgages and opening more than 85,000 savings accounts.

Our healthy financial position allows us to offer borrowers some of the most competitive rates in the market. We were proud that in the first six months of this year, we helped 3,386 people take a step on to the housing ladder, with two in five of our house purchase mortgages provided to first-time buyers.

But this level of lending can only continue if we can retain our profits and reinvest them back into our business. The Government’s proposal to introduce a bank surcharge of 8% on all banking services organisations’ profits over £25m will unfairly hit the six largest building societies, with these institutions paying about a third4 of the additional £1.7bn5 expected to be raised over five years.

As the six largest building societies were responsible for 50% of the UK’s net mortgage lending in 2014 6, a tax which could impact our ability to fund growth in lending could have significant consequences for the UK mortgage market. As well as funding lending, we also use retained profit to invest in the business and to provide savers with overall returns that beat the market average.7

How we treat our members is vital to us. We were very pleased to be ranked in the top three most trusted financial services providers in the UK, and the most trusted in Yorkshire8. This achievement is a credit to all our people who are committed to delivering outstanding customer service.

We are hugely proud of our community and charity activity which remains an ongoing commitment of the Group. We took great strides towards our goal of raising £500,000 for Marie Curie by the end of 2016, reaching more than £350,000 in the campaign’s first year.

The first half of this year has demonstrated how, as a mutual organisation with no external shareholders to satisfy, we focus on maintaining financial strength and stability. We operate in an increasingly competitive mortgage market and will continue to lend responsibly, remaining true to our mutual values of putting our customers and colleagues at the forefront of everything we do.

2015 interim results highlights

Delivered an award-winning customer experience

  • Ensured customers remain happy with our service: achieved an average Net Promoter Score of 27%9 compared to an industry average of 3%.10
  • Achieved 1,646 best buy mortgage and savings account mentions across the Group.11
  • Delivered value to our members by providing an average instant access savings rate of 1.20%, maintaining rates higher than the industry average of 0.88%.12
  • Continued to support borrowers, with £3.0bn gross lending (June 2014: £3.7bn) and £630m net lending (June 2014: £1.3bn).
  • Provided support for those seeking to get on to the housing ladder, with 40% of house purchase mortgages taken out by first time buyers, including those with 5% deposits.13
  • Continued to help borrowers make their money go further by providing one in five of all UK offset mortgages.14
  • Maintained support for small and medium sized enterprises through provision of commercial mortgages, with gross lending totalling £58.9m (June 2014: £62.8m).
  • Attained 10 awards across the Group for mortgages, savings, current account and corporate responsibility activity, including Best Offset Mortgage Provider, Best Debit Card for Use Abroad and Best Building Society Mortgage Provider.15

Achieved sustainable financial performance

  • Increased total asset base of £38.5bn (December 2014: £37.6bn)
  • Maintained a strong Group average indexed loan to value of 50.9%16 (December 2014: 50.9%)
  • Secured stable share of gross lending market share at 3.3%17 (December 2014: 3.7%).
  • Achieved a net lending market share of three times gross lending share at 10.3%18 (December 2014: 11.4%).
  • Asset quality remains strong, with the number of loans in arrears by more than three months further reduced to 1.06%19 (December 2014: 1.21%), below the industry average of 1.34%.20
  • Successful issue of 750m Euro senior unsecured seven-year wholesale bond, diversifying funding sources with fund managers, insurers and pension funds allocated 89% of the transaction.

Made it easy and simple for our customers

  • Delivered innovations and upgrades to our website, including increasing flexibility by enabling online mortgage applications to be transferred to branch or phone channels and by piloting an online mortgage appointment booking system.
  • Implemented new branding for Norwich & Peterborough Building Society to help members recognise the benefits of being part of a larger organisation.
  • Invested in improvements to more branches, bringing the total number of refreshed and refurbished branches to 57.

Offered a leading experience for our people

  • Pledged to further invest in new talent by launching an apprenticeship programme, which will create 150 new apprenticeships at head office sites over the next five years.
  • Doubled the amount of time colleagues can take as paid leave to volunteer for good causes to 31 hours. So far this year, 2,602 colleague hours have been spent contributing to charities, local schools and good causes in the communities where they are based.
  • Achieved the Guinness World Record for holding the World’s Largest Cream Tea (multiple sites), with 667 colleagues participating to help raise money for Marie Curie.

Made a positive impact on our communities

  • Reached £350,000 in the first year of our Hour of Need fundraising campaign for Marie Curie, which aims to raise £500,000 by the end of 2016.
  • Made the Yorkshire Air Ambulance’s biggest-ever single donation of £944,254, raised through our members choosing to save in the Yorkshire Air Ambulance affinity account.
  • Donated £149,265 in 254 donations to charities and local good causes through the Yorkshire Building Society Charitable Foundation, which is largely funded by members through the Small Change Big Difference® scheme.
  • Won two awards for our community and charity work, including the Challenge Event Award at the Third Sector Business Awards for our Marie Curie Hour of Need campaign.


  • 1 Fixed rate – Yorkshire Building Society two-year fixed rate at 1.07%, launched 22/05/15; verified by Moneyfacts on as lowest fixed rate mortgage on record by any UK financial services provider at date of launch; Chelsea Building Society 0.98% two-year Bank of England Base Rate Tracker, which tracks the base rate, currently 0.50%, at +0.48%, giving a current rate of 0.98%, launched 05/05/15; verified as the lowest on the market by Moneyfacts 01/06/15.
  • 2 This includes a number of non-core items that are detailed in the reconciliation of core operating profits (see Appendix 1).
  • 3 Source: YouGov. Total sample size in May was 1,523 adults. Fieldwork was undertaken between 14th and 18th May. The survey was carried out online. The figures have been weighted to be representative of all UK adults (aged 18+), and are presented on a 3 month rolled base for Yorkshire.
  • 4 Based on building societies’ latest published full year financial results.
  • 5 Source: HM Government Summer Budget 2015: policy costings.
  • 6 Source: SNL Financial, 1 January to 31 December 2014.
  • 7 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 March 2015.
  • 8 Source: YouGov. Total sample size in May was 1,523 adults. Fieldwork was undertaken between 14th and 18th May. The survey was carried out online. The figures have been weighted to be representative of all UK adults (aged 18+), and are presented on a 3 month rolled base for Yorkshire.
  • 9 Source: Average of monthly Nunwood Customer Experience survey of Group customers. Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.
  • 10 Source: Nunwood 2014 annual Customer Experience Excellence study. Method of measurement has changed from transactional to relational and now covers interaction across all brands and channels.
  • 11 Source: Presswatch Financial from Kantar Media.
  • 12 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 March 2015.
  • 13 Number of mortgages provided to first-time buyers, as a proportion of total house purchase mortgages.
  • 14 CACI, June 2015: YBS Group UK offset mortgage market share is 22.3%. CACI data based on 75% of the UK mortgage market.
  • 15 Best Offset Mortgage Provider and Best Debit Card for Use Abroad - Moneynet Personal Finance Awards 2015; and Best Building Society Mortgage Provider - Consumer Moneyfacts Awards.
  • 16 Excludes commercial loans.
  • 17 Source: Bank of England: Monthly amount of sterling secured on gross lending and housing associations (in sterling millions) not seasonally adjusted.
  • 18 Source: Bank of England: Monthly changes of total sterling net secured lending to individuals and housing associations.
  • 19 Expressed as a percentage of outstanding balances, including repossessions.
  • 20 Source: CML, to March 31, 2015.