ANNUAL REVIEW 2020 - YORKSHIRE BUILDING SOCIETY
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Annual Review 2020
2 3
A welcome Another strong performance in a
challenging year
to say how sorry we were that Catharine
French, who we appointed as a Non
from your Once again I’m pleased to report a strong set
of financial results, despite one of the most
Executive Director in April 2020, sadly
passed away in May.
Chairman challenging years in our Society’s history.
The consequences of the COVID-19
pandemic and the economic impact of
You can find out more about the directors
you can vote for at the AGM and what they
bring to the Society on pages 19 to 23.
leaving the EU are still uncertain. Although As your Chairman I have responsibility for
the vaccine rollout programme is well ensuring we’re a well-run organisation
underway and a trading agreement has run in your interests. Maintaining a robust
Our strategy is built around
providing Real Help with
Real Life We’re in a strong position financially
We do this by helping members
secure a place to call home and been reached between the UK and the approach to support the long term success
improve their financial wellbeing. EU, there is some uncertainty around and sustainability of the Society will remain
We’ve been a building society how effective these will be both in terms the priority of the Board in 2021, to ensure
for over 150 years and from the of immediate impact and longer-term we’re always doing the best for you.
beginning we’ve been there for challenges.
those who trust us with their Thank you – for being a member
We’re well placed to withstand these
savings and their mortgages. challenges and in a strong position I’m really proud of our response to the
financially. Mike Regnier, your Chief pandemic and how we’ve helped our
In 2020 being able to provide real
Executive covers this in more detail with a members and I’d like to thank you for
help was crucial as we responded
review of 2020 on pages 4 to 9. continuing to be part of our Society.
to the challenges of the COVID-19
pandemic - keeping members I would also like to thank our colleagues
in their homes, protecting their Changes to your Board for their commitment and professionalism
savings and safely providing the Your Board is here to represent you and throughout 2020. Our colleagues make us
essential financial services many I’m pleased to welcome Mark Parsons, who who we are and I’d like to thank each and
needed. joins us with extensive building society every one of them for continuing to deliver
experience and knowledge. I’d also like to an exceptional customer experience in
thank Mark Pain who has stepped down hugely challenging circumstances.
from the Board and Gordon Ireland who
leaves after the conclusion of this years
AGM for all their valuable contributions John Heaps, Chairman
over the last few years. I would also like 23 February 2021
Photo taken pre March 2020
at Victoria Quarter, Leeds.
4 5
Delivering our purpose of providing
real help with real life became even
more important in 2020, as the
COVID-19 pandemic created a
challenging environment
for our members,
communities and The pandemic has highlighted the importance
of financial wellbeing and building savings to
colleagues. help deal with whatever the future holds.
We opened 227,000 savings accounts in 2020
and helped members access their money
when they needed to, by keeping our branches
and agencies open. With the Bank of England
rate reduced to an all-time low of 0.1%, this
continues to be a difficult time for savers.
Across the year our rates beat the market by
0.17%1 on average, that’s equal to £51m in
We’ve been here for our borrowers additional interest for savers.
and savers throughout 2020
The launch of our savings app came at just the
There’s no doubt that the pandemic has
right time and supported over 93,000 members
impacted every aspect of life, and the housing
to stay at home and transact digitally, through a
market has been no exception.
new and easy to use channel.
We’ve continued to provide the mortgages
people need to buy their homes and supported
over 39,000 customers that needed to take
a payment holiday, ensuring they can stay in
As a building society
their own homes. we’re able to share the
As one of the few lenders to offer 90% financial success of the
mortgages in 2020, we’ve seen some of the Society with our valued
busiest days in our history for people applying
for mortgages. So we’ve had to dip in and out members, by investing
of this type of lending to ensure our service in them
levels were impacted as little as possible, and
A review to balance the number of applications we
received. All while continuing to support first- A key element of our purpose
of 2020
time buyers to get on the property ladder.
is to deliver long term value for
our members
In 2020 we I’m very pleased to say that our strong financial
provided over performance has enabled us to increase the
by Mike Regnier, 10,500 mortgages rates we pay to many of our most loyal savers.
your Chief Executive for people buying In January 2021 1.6m members received an
their first home increase to their interest rates, at a time when
rates were at an all-time low.
Y BS Group average savings rate compared to rest of market average savings rates based on savings stock from CACI’s Current
1
Photo taken pre March 2020 at Victoria Quarter, Leeds. Account and Savings Database (CSDB). Data period January-November 2020.
6 7
We looked for new ways to continue to
support communities in 2020
We created and made available six online financial education
sessions on our website and social media channels, to help
support children and their families with home-schooling.
High standards of customer
service have become even
more important
Our Net Promoter ScoreTM, which is
an independent measure of how
satisfied our customers are with
the services we provide and how
likely they’d be to recommend us, We’re taking our financial education programme online in 2021
increased to +532, up from +51 in and are aiming to reach 55,000 people by the end of 2022.
2019. I’m particularly pleased we We’re also launching a programme in our heartland community
were able to achieve this at a time of Bradford, to help 2,000 people improve their skills and
when many of our members really find work - young people just starting their careers and those
needed us the most. without the right skills that need to upskill or change careers.
In these challenging and uncertain
circumstances, our colleagues have
Thank you for helping us,
been brilliant
help homeless young people
Every day I’ve heard stories of colleagues going
above and beyond to support our members and We continued to help homeless young
one another. They are an absolute credit to the people, launching a second bond for End
Society and I’m incredibly grateful and proud of Youth Homelessness, with both bonds raising
them all. a combined £248,782 for the charity. This
brought the total raised during our three-year
To ensure we were able to continue providing
partnership to more than £1.1m and helped
members with essential financial services, in March
over 550 vulnerable young homeless people
a lot of our colleagues were able to start working
to have a safe place to call home. Our charity
remotely from home. Our contact centres and the
partner for the next three years is Age UK.
vast majority of branches and agencies remained
open throughout 2020, enabling our colleagues to Together we’re aiming to raise £1m to launch the
continue to support and help members when they Building Better Lives programme, strengthening
needed it. the financial resilience of thousands of older
people most in need.
Colleague engagement rose materially in 2020 to
make YBS a top-quartile employer for engagement
in our industry.
You can find out how we’ve been supporting our
colleagues on page 18.
K PMG Nunwood Customer Voice Programme January – December 2020. Based on 26,529 completed interviews with
2
customers. Net Promoter Score and NPS are trademarks of Satmetrix Systems, Inc Bains & Company Inc., and Fred Reichheld.
8 9
Financially
strong and
well positioned
Profit before tax for 2020 was £161m
(vs £167m in 2019) and our core operating
profit, which is a good guide to how
profitable the Society is day to day, was
£171m (vs £185m in 2019). This is a strong
performance that we’re proud of given the
challenges presented over the year. We
have continued to focus on reducing our
costs (down 5% year on year to £276m) and
improving our efficiency, so that we can
provide our members with value for money.
We have good levels of capital reserves
which help shield us from any financial
uncertainties and protect our savers. We’ve
We’re investing In 2020 we completed a strategic review to ensure
our priorities continue to support our purpose
also been growing our capital ratios over
the past five years, with our Common
of providing Real Help with Real Life. As a result
and adapting
Equity Tier 1 ratio increasing to 16.7% in
we’re embarking on a major new transformation 2020 from 16.6% in 2019. This basically
programme. This will lead to significant measures our ability to absorb future losses
for the future improvements in both customer experience and
efficiency through investment in digital technology.
and is much higher than the regulator’s
current requirements. We have also chosen
We‘ve already launched our new customer savings to carry higher levels of liquidity than in
app as part of this and invested in reducing the previous years.
amount of paper we use , which also supports our
environmental commitments. All of this means that as a business, we
entered this crisis from a position of
To ensure we’re delivering good value to our strength and we’re set to achieve our aim
members as a whole we’ve also had to make some of emerging even stronger.
difficult decisions. These include reducing our high
street network in areas where it is most concentrated, Mike Regnier, Chief Executive
announcing plans to close 12 branches that all have 23 February 2021
other YBS branches or agencies within nine miles.
We also stopped offering face-to-face mortgage
advice in our branches, as the demand for this has
been decreasing for the last five years. Personal and
convenient mortgage advice is still available from
fully-qualified mortgage advisors by phone, which is
a popular option with our members.
10 11
Savings Our average
227,000
new savings
savings rate was
0.17% 3
accounts opened higher than the
market average of 0.62%
Mortgages
Provided more than
best
10,500
2020
highlights
mortgages to help people
buy their first home
Overall Mortgage Provider
at the Moneynet Personal
Finance Awards
People
Another strong year,
supporting our savers, 2,200
volunteering hours
top 30
UK employers for Working
borrowers, colleagues Families in 2020
and the community. given by our colleagues
Community
£970,000 5 years
To local communities
Celebrating
through charitable giving of being carbon neutral
and volunteering
Recognition
Winner of
21
awards across
Best Building Society Savings
Provider at the Moneynet
Personal Finance Awards
the YBS Group
3
YBS Group average savings rate compared to rest of market average rates based on savings stock from CACI’s Current Account
and Savings Database (CSDB). Data period January - November 2020.
12 13
Summary Financial Statement
Group Statement of Financial Position 2020 2019
£m £m
Assets
Liquid assets 8,403.2 5,602.3
Details of your Society’s financial performance in 2020. Loans and advances to customers 38,798.6 37,984.4
Other assets 729.0 691.2
Total assets 47,930.8 44,277.9
This financial statement is a summary of information in the audited Annual Report and Accounts,
the Directors' Report and the Annual Business Statement, all of which are available to members Liabilities
and depositors free of charge at every office of Yorkshire Building Society, from 29 March 2021. Shares - retail savings 33,368.3 30,677.3
However, as branches are only open for essential transactions for a copy of the full 2020 Annual Wholesale funding and other deposits 10,500.9 9,924.4
Report and Accounts, visit ybs.co.uk/annualreport, email agm@ybs.co.uk or contact us from Subordinated liabilities 645.0 626.4
Other liabilities 619.7 383.1
23 March 2021.
Total liabilities 45,133.9 41,611.2
Summary Directors’ Report Members' interest and equity 2,796.9 2,666.7
The information contained in the Chairman’s welcome and Chief Executive’s review on pages
Total members' interest, equity and liabilities 47,930.8 44,277.9
2 to 9 addresses the requirements of the Summary Directors’ Report.
The directors consider that the Group has adequate resources to continue in operational Summary of key financial ratios 2020 2019
% %
existence for the foreseeable future. Accordingly, the going concern basis has continued to be
adopted in preparing the Annual Report and Accounts. Gross capital as a percentage of shares and borrowings 7.85 8.11
The gross capital ratio is the relationship between the Group’s capital
Approved by the Board of Directors on 23 February 2021:
and its liabilities to investors. Capital comprises general reserves (i.e.
John Heaps - Chairman accumulated profits), hedging and revaluation reserves, subordinated
liabilities and subscribed capital.
Alasdair Lenman - Chief Finance Officer
Mike Regnier - Chief Executive Liquid assets as a percentage of shares and borrowings (liquidity ratio) 19.16 13.80
The liquid asset ratio measures those assets available to meet requests by
savers to withdraw their money, to fund mortgage advances and to fund
general business activities. It expresses cash and assets easily converted
into cash as a percentage of the Group’s liabilities to investors.
Group Income Statement 2020 2019
£m £m 0.27 0.30
Profit for the year as a percentage of mean total assets
Net interest income 438.0 464.6
Fair value gains and losses (10.7) (21.9) Management expenses as a percentage of mean total assets 0.60 0.66
The management expense ratio measures how cost effective the Group is.
Net realised gains 12.9 6.3 It is calculated by comparing the management expenses (administrative
Other income 13.8 8.4 expenses opposite) for the year with average total assets.
Total income 454.0 457.4
Independent auditors' statement on the We also read the other information contained to the full Annual Accounts. Our report on the
Management expenses1 (275.8) (289.6) Summary Financial Statement to the in this Annual Review and consider the Society’s full Annual Accounts describes the
Impairment of loans and advances to customers (12.2) (0.2) members of Yorkshire Building Society. implications for our report if we become basis of our audit opinion on those Annual
aware of any apparent misstatements or Accounts, the Annual Business Statement and
We have examined the Summary Financial
Movement in provisions (4.7) (0.4) Statement of Yorkshire Building Society (the
material inconsistencies with the Summary the Directors’ Report.
Financial Statement. The other information
‘Society’) set out on pages 12 to 13, which
Opinion
Profit before tax 161.3 167.2 comprises the Group Income Statement,
comprises only the Chairman’s welcome, the
Chief Executive’s review and the Summary
Group Statement of Financial Position and In our opinion the Summary Financial
Tax expense (37.8) (38.3) summary of key financial ratios.
Directors' Remuneration Report. Statement is consistent with the full Annual
This statement, including the opinion, has Accounts, the Annual Business Statement and
Profit for the period 123.5 128.9 Respective responsibilities of directors been prepared for and only for the Society’s the Directors' Report of Yorkshire Building
Society for the year ended 31 December
and auditors members as a body in accordance with
Section 76 of the Building Societies Act 2020 and complies with the applicable
1
Includes administration expenses, depreciation and amortisation. The directors are responsible for preparing the
1986 and for no other purpose. We do not, requirements of Section 76 of the Building
Summary Financial Statement, in accordance
in giving this opinion, accept or assume Societies Act 1986, and the regulations made
with the Building Societies Act 1986.
responsibility for any other purpose or to under it.
Our responsibility is to report to you our
any other person to whom this statement is
opinion on the consistency of the Summary
shown or into whose hands it may come save
Financial Statement with the full Annual
where expressly agreed by our prior consent
Accounts, the Annual Business Statement
in writing.
and the Directors' Report and its compliance PricewaterhouseCoopers LLP
with the relevant requirements of Section 76 Basis of opinion Chartered Accountants and Statutory Auditors
of the Building Societies Act 1986 and the Leeds.
Our examination involved agreeing the
regulations made under it.
balances in the Summary Financial Statement 23 February 2021.
14 15
Your
questions
answered
We asked our online community
My Voice, what they’d like to
know. Here are some of the
common questions.
Why are pay and bonuses so high for your executive directors?
Pay includes a number of elements, such have, which includes consequences for
as salaries and bonuses. The pay we them personally, including FCA imposed
How do you reward loyalty? offer is aligned with the wider financial fines and even custodial sentences for
services market and designed to attract very serious rule breaches.
and retain people who can drive the
We’re owned by you so your opinions of our most loyal members. This also business forward and deliver long term Bonus opportunity for executive directors
matter - you told us that you’d like to kick-starts our new member loyalty value for our members. Your leadership looks at their accountabilities and
be rewarded for your loyalty and we’ve initiative and we’ll be introducing team has responded to the challenges responsibilities, and if they don’t meet
listened. We’re investing £20m in 2021 member exclusive rates and products of the COVID-19 pandemic and made the high standards expected, or deliver
to increase the savings rates for 1.6m as part of this. decisions to help steer the business the right level of member value a bonus
during this unusual time, and the Society won’t be paid – it can also be taken back
has performed well in 2020 as a result (referred to as clawback) if behaviours or
of this. The Remuneration Committee performance which impacts members or
How resilient is the Society to the impact of the the Society are identified later.
COVID-19 pandemic? (our independent committee to oversee
executive pay) believe what we pay is You can find out more about directors
proportionate when considering the level remuneration in the summary report on
It’s hard to know how the COVID-19 back some of the services we offer, of decision-making accountability they
pandemic will continue to impact our for example focussing on essential pages 24 to 29.
wider society, taking into account transactions only in branches during
the rollout of vaccines and new lockdown.
strains. We’re committed to keeping How do you balance the focus on mortgages and
our branches and contact centres We’re in good shape with capital behind
open through the restrictions we’re us to protect ourselves from unexpected savings with supporting the community?
all experiencing on our daily lives. changes and overall are in a strong
We’ve introduced flexibility and scaled position after a successful year. Mortgages, savings and community In 2020 the Yorkshire Building
are the real cornerstones of a building Society Charitable Foundation set up
society. While our key focus is helping a Coronavirus Response Fund with a
people to save and own their own home, donation of £100,000 from the Society.
What’s the future for how members choose to deal we’re committed to creating a lasting The fund supported 61 smaller charities
positive impact in our communities. helping communities across the country
with you, is this moving to more online?
We do this in a number of ways including to cope with the impact of the pandemic.
working with our charity partner, This is in addition to over £320,000
As a business we need to continue to at a rapid pace. However our branches donated by the Foundation to 299
evolve to remain relevant. Alongside and agencies are still the key part of which is Age UK for the next two years,
volunteering and through Money Minds charities around the UK. Donations are
this, members’ needs and behaviours who we are and where a large amount made possible thanks to our members
are changing and the way they want of our members transact. While we – our financial education programme
and Career Minds, a new programme that who take part in the Small Change Big
to open and operate their savings continue to invest in our online Difference® scheme, donating their
accounts, receive mortgage advice, capabilities, our branches and agencies enables our colleagues to volunteer their
skills to help 14-16 year olds prepare for pence of interest to the Foundation once
manage their money and access are still there for our members too. a year.
financial services continues to do so the world of work.
16
2020
what a year it was...
17
January 16 March 23 March 24 April 1
The World Health Boris Johnson told us The 2020 Tokyo Yorkshire Building Society
Organization is “you must stay at home, to Summer Olympics Charitable Foundation
notified of the novel protect the NHS during the were postponed launched a £100,000
COVID-19 in China. coronavirus pandemic”. until 2021. Coronavirus Response Fund
to support smaller charities
April 5
The Queen gave a
rare public
address and said
“We will be with
our friends again.
We will be with
June 30 June 30 May 15 May 13 our families again.
Our EYH partnership came to an 37,307 borrowers End Youth We made our We will meet
end – it raised more than £1.1m supported so far Homelessness (EYH) Money Minds again.”
and helped 557 young people with a mortgage bond launched, lessons accessible
and 114 dependent children payment holiday. which raised almost online.
into their own rented homes. £80,000.
July 4
Pub pints are
poured and
couples finally
said "I do" as
lockdown
restrictions are
eased across
England.
August 11 October 5 November 16 December 24
YBS Savings ‘Staying Safe Online’ and Age UK is our new charity As a thank you to our
mobile app was ‘Protecting Yourself Against partner – we’ll provide colleagues going above
launched. Fraud’ online tutorials went advice, support and care and beyond in 2020 we
live, filmed at home by YBS when older people need gave everyone Christmas
colleagues. it most. Eve off work.
18 Directors for election 19
We’ve all had to adapt over the
Supporting last year, from juggling home
schooling with work, to the many Your
As the Board of a building
society, the directors are here
our restrictions in our daily lives.
Board to represent you. There are a
colleagues Throughout this time we’ve had
two consistent aims; protecting
number of executive directors
who work full time for the
so they’re here the health and wellbeing of our acting Society, like Mike Regnier your
Chief Executive, and then
colleagues and continuing to for you
to support you provide the essential services
independent non executive
directors that aren’t employed
our members need. by the Society. Each brings a
variety of skills and experience.
• Our contact centres and most of our
branches have remained open throughout, You can find out about the specialist committees that focus on key areas such as risk,
so we’ve been there if you needed us. I am truly humbled to governance, remuneration and audit, and the directors that attend these in the full
be your CEO at such report and accounts. For a copy visit ybs.co.uk/annualreport, email agm@ybs.co.uk
• We trained colleagues from across the a unique time in our or contact us. If you're visiting our branches for an essential transaction copies will be
business to help out in the areas where available from 29 March 2021.
we’ve needed it most, such as our contact long history, and so This year you can vote for nine directors at the AGM, including a new Independent Non
centre – they’ve been taking calls to answer
any questions you may have. proud of everything our Executive Director, Mark Parsons.
colleagues have done
• Working with BUPA and Unmind, we’ve to support our members Mark Parsons
shared lots of helpful resources and tips
Independent Non Executive Director
with our colleagues from podcasts on and each other.
Joined the Board in 2020
mental wellbeing and managing stress to
keeping active at home. Mike Regnier
I am fortunate to have had a 35 year career in large retail
• We increased investment in our remote financial services companies. In that time I held executive
secure log in software, which meant responsibilities for finance, mortgage and savings products,
more of us could work from home - our branches and telephone centres, Human Resources, IT
colleagues connected virtually, working investment and risk management.
together for you. I am proud that I began my executive career at a building
society and was latterly Chief Executive of Coventry
• We now offer unlimited dependents’ and Building Society. I’m delighted to have now joined the
Yorkshire Building Society Board, where I believe I can
carers’ leave for those colleagues with
apply this broad experience to support and guide the
caring responsibilities due to changing why Society into the future.
circumstances.
vote A building society is privileged to be owned by its
for me? members, and we have a duty to ensure its run in your
• Any colleague shielding, unwell or needing best interests. Since joining the Board last October I’ve
to self-isolate that couldn’t work from home been pleased that, both in day-to-day actions and our
also qualified for paid sick leave. We’re strategy, the Society is focused on this duty. I am intent
also proud that we didn’t have to furlough on this continuing.
anyone and everyone remained on full pay.20 Directors for re-election Directors for re-election 21
Neeta Atkar John Heaps
Independent Non Executive Director Chairman
Joined the Board in 2017 Joined the Board in 2014
At a time when COVID-19 has so badly impacted all our lives,
I’m proud to be part of Yorkshire Building Society and the importance of my principal role as your Chairman to
it’s a privilege to be a member of the Board. My 30 years’ ensure the safety and soundness of our Society, could not
experience working in the financial services industry, in be greater.
risk management and as a regulator - and being a member I do this in various ways, including the development and
myself allows me to constructively challenge and help management of your Board, ensuring it is made up of
oversee the strategy of your Society. hugely capable people, diverse in skills as well as gender
and ethnicity. During these difficult times it’s also critical
For all of us, 2020 was a challenging year. So I’m particularly
that the Board works to develop and oversee the execution
proud and impressed by how well colleagues have
of an effective strategic plan, that addresses both our
continued to provide fantastic support to our members
why whilst also dealing with their own personal circumstances.
why fundamental Purpose, as well as the challenges of COVID-19
vote Their commitment to your Society has been unwavering. vote and the increasingly digital world in which we operate. I am
pleased to say that the Society has risen superbly to these
for me? The year ahead will continue to be challenging, so my focus
for me? challenges.
will be to ensure that we continue to support our members, Looking forward, my principal focus will be to ensure we
colleagues and community. have the people and the strategy to meet and overcome
whatever we have to face and to continue to provide Real
Help with Real Life for all our members and customers.
Guy Bainbridge Alison Hutchinson
Independent Non Executive Director Senior Independent Non Executive Director & Vice Chair
Joined the Board in 2019 Joined the Board in 2015
Since joining the Board, my focus has been to ensure your
Since joining the Board I’ve been constantly impressed
Society remains relevant, competitive and grounded in what
by the passion shared by all Board members and senior
matters most to you, our members.
management for our Society. In 2020 with the COVID-19
pandemic this has been more evident than ever, with the One of my responsibilities is ensuring the colleague voice
focus on our purpose, and the wellbeing of our current and is heard by the Board to better inform decisions. That
future members and colleagues. I am now also spending responsibility has been a real privilege, especially this year.
time making sure we have a strong strategy for the post- To hear how well the executives and our colleagues have
pandemic world in which many pre-existing trends have responded to the many challenges as a result of COVID-19,
accelerated, and new ones emerged. ensuring we look after our members, colleagues and the
communities in which we operate.
As Chair of the Audit Committee I’ll continue to use my
why financial services experience to assess and oversee our why Looking forward we’ll continually review how technology
vote controls. These are particularly important for the safety of vote can improve the way we make it even easier for our members
to engage with us, whilst not losing the personal service we
for me? members’ savings and the safety of business interactions for me? all value tremendously. I value your trust in me to represent
that members and customers have with the Society. I’ll use
your views at the Board and hope you’ll support me to
my auditing experience to help the Society maintain its
continue in this role, so I can draw from over 30 years of
financial soundness and the strong quality of financial and
experience across financial services, retail, technology and
non-financial reporting.
the charity sector to best serve you.22 Directors for re-election Directors for re-election 23
Alasdair Lenman Mike Regnier
Chief Finance Officer Chief Executive
Joined the Board in 2017 Joined the Board in 2014
2020 was an unprecedented year, of course. During the
I’ve been the CFO of your Society for three years. Our work COVID-19 crisis we remained focused on two priorities –
on risk management has delivered a stable platform to looking after the health and wellbeing of our colleagues and
enable us to navigate the challenges of 2020 successfully. providing continuity of service to our members. The way our
colleagues responded to this was nothing short of amazing
My other focus over the last 12 months has been to develop
and is another example of why I am immensely proud to work
and improve our mortgage lending criteria, so that we can for Yorkshire Building Society.
help more people to find a place to call home and begin to
As events like this demonstrate, we face an uncertain future
improve our margin performance, so that we can increase,
and it’s more important than ever that we focus on meeting
wherever possible, the value we return to members. our members’ expectations.
Your Society’s management team have built a plan that will, Working with some of the UK’s largest financial services firms,
over the next few years, make us both much easier to do I’ve learnt how to apply technology to improve the quality
why business with and even more efficient operationally. I would why and consistency of what we do behind the scenes, so we
vote love to have the opportunity to implement this. vote can provide the best possible service to customers however
for me? As I said last year, if re-elected, I will continue to work to for me? they choose to deal with us. I’ve also seen how to run an
efficient organisation which will ensure that your Society is
deliver sustainable benefits for our members, by driving
strong commercial outcomes and highly effective sustainable for future generations.
risk management. I’m passionate about creating an inclusive working environment
and a culture where all of our colleagues feel valued and
supported, so everyone can contribute to providing the best
value and service that we can to all of our customers.
Guy Parsons Stephen White
Independent Non Executive Director Chief Operating Officer
Joined the Board in 2013 Joined the Board in 2016
Being part of a values-led organisation that has its members
An early career in a building society branch taught me about
at its core is really important to me. I’ve worked for large
the financial challenges affecting customers day-to-day.
and small businesses and it’s clear to me that the ones that
Coupled with my international experience at board level,
succeed consistently focus on doing the right thing for their I have a unique perspective on balancing the pressures of
customers. The Society has been doing this for over 150 being competitive and ensuring the needs of members and
years and despite the economic uncertainty caused by the customers are met through our service and our range of
COVID-19 pandemic, we continue to focus on helping people mortgage and savings accounts.
shape better financial futures for themselves.
Being an organisation focused on our members drives
Despite current low interest rates we need to support our my passion for the Society. I’m proud that we’ve reduced
why loyal savers and give them the best value. At the same time why processing times for mortgages and maintained savings rates
vote we need to support our younger members and customers
who are trying to buy their own home.
vote which were higher than average in our sector in 2020.
for me? I’ll draw on my commercial expertise to offer support and
for me? Looking ahead, I hope my contribution helps protect and
enhance the Society for the future. I’m committed to seeing
advice to the Society’s executive team, as they evolve and our digital strategy come to life and will continue to put our
develop our strategy in this challenging marketplace, whilst members first and build a business we can all be proud of.
maintaining our clear focus on our members.24 Remuneration report 25
remuneration is competitive while remaining Our executive directors are highly skilled and
summary commensurate with our mutual status.
Have there been any changes to the
experienced; they’re critical to delivering the new
challenging phase of our business transformation
directors’ Remuneration Policy following the
Committee’s review?
and new business strategy. As Chair of the
Remuneration Committee, I strongly believe the
Remuneration Within the context of the current environment,
change proposed is right for the Society and
recommend members vote for its approval at the
Report plus the strong financial performance and
ongoing commitment to enhance member value,
the Committee has conducted its annual review
2021 AGM.
How have executive directors’ salaries
of all aspects of executive director remuneration changed in 2020?
and believes changes need to be made. A 2020 pay settlement of 2.6% was agreed for
Guy Parsons, Chairman of the colleagues to reflect the vital role they played
Remuneration Committee, On bonus, we plan to increase the focus on
delivering critical services to customers and in
explains our approach to long-term value creation in addition to the
our financial performance. Executive directors did
achievement of profitability and customer
rewarding directors and satisfaction, which is the focus of the current
not receive a pay increase in 2020.
colleagues. bonus scheme. This means continuing to protect Will executive directors receive a
the Society’s financial strength and stability, bonus for 2020?
Photo taken pre March 2020 at Victoria Quarter, Leeds. whilst also delivering strategic change, and
The Society’s bonus scheme applied in 2020,
protecting and enhancing the interests of our
‘Building Together’, is linked to the core business
members and colleagues in a way that reflects our
What are the Directors’ Remuneration our members alongside strong, sustainable objectives of financial performance, customer
long-term performance. vision, purpose and culture.
Report and the Remuneration Policy? experience and risk management. The scheme is
As a member, you have a say in how the directors The changes to the bonus we are proposing are: the same for all colleagues, ensuring everyone
Every year your Society publishes its
Remuneration Report. The 2020 report shows are paid because you have the opportunity to input • Increasing the maximum bonus opportunity is working towards the same business outcomes.
In 2020, executive directors had the opportunity
executive directors’ remuneration awarded in on this report through an advisory vote at the AGM. for executive directors through a new bonus
2020 (and 2019 for comparison). Every three We take your views seriously and we’ll review the plan, tied to the longer-term strategic goals to earn a bonus of up to 50% of base salary. In
years, or sooner if there’s a policy change, the results to consider any appropriate action. of the Society. line with our Remuneration Policy for executive
directors, a business controls overlay process is
Remuneration Policy for the executive directors
is shared with members. At the 2021 Annual How does the Society approach • Performance targets are broad and linked to also carried out to ensure the Society hasn’t been
enhanced member value, ESG (Environment,
General Meeting (AGM), both the Directors’ remuneration and specifically manage Social and Corporate Governance) and exposed to unnecessary risk; this forms part of
Remuneration Report and the Remuneration executive directors’ remuneration? Diversity priorities. our ‘sustainability review’.
Policy will be subject to an advisory vote.
This is due to a proposed change within the
The Society seeks to ensure reward and benefit • Performance measures and targets will be For 2020, the executive directors’ were set
stretching objectives, played out in the context
arrangements are fully aligned in what we do set each year, taking account of multi-year
Remuneration Policy for executive directors. every day in providing real help for the real lives performance and overall, protecting member of a challenging, and unpredictable trading and
2020 has been a very challenging year for the of our members. We seek colleague opinion on interests. economic environment due to the pandemic.
In determining bonus awards the Committee
Society, our members and colleagues due to the our remuneration framework and ensure our
policy is gender neutral and offers a fair outcome
• There will be no automatic participation in carried out a comprehensive review of individual
difficult environment created by the COVID-19 the scheme and a pre-grant performance
pandemic. Throughout, we’ve focused on to colleagues in its design and practice. Retaining assessment will enable the Committee to performance and the Society as a whole. The
safeguarding the wellbeing of our colleagues and a skilled and committed senior management team apply judgement in setting the maximum Society’s Risk and Audit Committees also
continuing to deliver excellent customer service. is critical to the Society achieving our objectives bonus opportunity on a yearly basis, based on provided input in relation to our financial and
The Summary Financial Statement on pages 12 to and delivering long term value for members. achievement of the previous year’s performance non-financial performance, including the member
13 shows the Society has been able to continue and the financial stability of the Society. and customer experience we’ve delivered in
The Society manages executive directors’ pay via
2020. The remuneration of colleagues generally
its strong financial performance, meaning we’re
well-placed to deliver improvements in member
the Remuneration Committee (the Committee), • Payment of bonus will also remain subject was also taken into consideration.
which is made up of three non executive to the established business controls overlay
value over the long-term. directors. The Remuneration Committee has process and Committee discretion. It is within this context that the Committee
This is an important time for the Society. We’re specific responsibility for making sure we have • Compulsory deferral, malus and clawback will believes the Society has been able to continue
its strong financial performance meaning we are
embarking on an ambitious transformation the right policies and processes in place for our continue to apply. This further increases the link
journey over the next few years that aims to most senior roles, the Committee is guided by between long-term performance and bonus well-placed to deliver improvements in member
deliver better service and improved value to the Society’s Remuneration Policy ensuring outcomes in line with regulatory expectations. value over the long-term in a sustainable and26 27
27
balanced way. They have approved a bonus delivers variable pay in a manner that prevents How much did our non executive directors earn in 2020?
payment for executive directors, with an eligible undue risk taking whilst achieving the level of
As referenced earlier in these pages, the non-executive directors agreed to not take an increase in
executive director achieving, on average, sustainable performance.
fees for 2020 and therefore they remain at the same level as 2019.
76.42% of their maximum opportunity. For 2020
Non executive directors do not participate in any
performance year, 99.06% of eligible colleagues Non executive director 2020 2020 Total
bonus scheme. Basic Fees Committee £000
will receive a bonus, on average 71.7% of their £000 Fees £000
maximum bonus opportunity. You can find more
information on the Society’s 2020 results that Were non executive director fees John Heaps (Chairman) 197 0 197
have influenced the recommended 2020 bonus changed in 2020? Neeta Atkar 52 30 82
outturn on pages 12 to 13. The Chairman and non executive director fees Alison Hutchinson 57 20 77
In line with regulation, all bonuses payable are reviewed annually. However, at the time of (Vice Chair from 01/10/2020)
to executive directors designated as ‘Senior review, the COVID-19 pandemic was impacting Gordon Ireland 52 18 70
Managers’ are subject to deferral. This applies to the UK economy as a whole, including Financial
Mark Pain 55 7 62
colleagues whose total remuneration is greater Services. As a result, the non executive directors (Vice Chair – retired 30/09/2020)
than £500,000, or where their bonus equates requested that no increase be proposed for their
Guy Bainbridge 52 30 82
to at least 33% of total remuneration in a given fees for 2020 and fees remained as they were
year. This is known as the 'de-minimis threshold'. for 2019. Guy Parsons 52 19 71
Under these circumstances, bonuses will be paid Catharine French 9 1 10
over a longer period and delivered in part via (Member of Board and Remuneration
a Share Equivalent Instrument (SEI) rather than For the full Directors’ Remuneration Committee 01/04/2020 - 10/05/2020)
cash. In addition to regulatory requirements, Report which includes more information Mark Parsons 10 4 14
the Society’s Remuneration Policy requires all on the Policy and bonus payments please (Joined 20/10/2020)
bonuses be deferred for the senior management go to ybs.co.uk/rewardpolicy
team. Bonus deferral ensures that the Society
How much did the executive directors earn in 2020? Remuneration Policy
The table below shows the remuneration of the Society’s executive directors for the years ended The Remuneration Policy is subject to an advisory vote at the 2021 AGM. Key elements of the policy
31 December 2020 and 2019. This is audited information. are outlined below, with details of the Society’s full Remuneration Policy available in the Annual
Report and Accounts online at ybs.co.uk/annualreport
Executive directors’ remuneration
Remuneration Purpose and link Operation Opportunity
Fixed Remuneration Variable Remuneration element to strategy
Executive Base** Taxable Pension Total Bonus* Total Total Base salary Reflects the contribution of Base pay is typically reviewed n/a
director Salary Benefits Allowance FIXED £000 VARIABLE Remuneration executive directors in their role annually in line with the range of
£000 £000 £000 Remuneration Remuneration £000 as defined by the combination increases for all colleagues, and
£000 £000 of: determined with reference to:
2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 • Skills, knowledge and • Role, experience and
experience individual performance;
Mike • Performance • Affordability – the economic
Regnier - 591 583 15 15 94 93 700 691 226 280 226 280 926 971 • Demonstrating the Society’s environment and overall
CEO purpose, priorities and financial state of the Society;
Alasdair behaviours. • Comparison to the external
Lenman - 359 356 31 43 57 57 447 456 137 177 137 177 584 633 market, supported by
CFO reference to the Society’s
grading structure, our Career
Stephen Framework.
White - 433 429 31 31 69 69 533 529 165 186 165 186 698 715
COO Continued over page
* The bonus figures illustrated represent the full amount of bonus awarded in respect of the 2020 performance year. Mike,
Alasdair and Stephen will only receive 20% of this in cash in 2021, with the remainder delivered over seven years. Full details
regarding how bonuses are paid including deferred elements paid in line with regulatory requirements are available within the
full Directors’ Remuneration Report available at ybs.co.uk/annualreport.
** The executive directors’ base salaries last increased in May 2019. The 2020 number shows as higher based on a full 12
months of payment (rather than 8 months at the new rate in 2019).28 29
27
Remuneration Purpose and link Operation Opportunity Appointing new executive directors
element to strategy
New hires Bonus buy out
Bonus Rewards annual performance. • Key measures within Under ‘Building Together’
(‘Building ‘Building Together’ Bonus is the Corporate Plan have executive directors When agreeing the components of a remuneration The Committee may make awards on hiring an
Together’ and driven by : to be achieved for an ‘on have the opportunity package for the appointment of executive directors, external candidate to the Board to compensate
• Financial performance (Profit to earn an on target
‘Leading for target’ bonus pay-out, and
bonus of 30% of base
the Committee will apply the following principless: them for the forfeiture of any award entered into
Value’) Before Tax) considerably exceeded for with a previous employer (proof will be required).
• Customer Experience (Net maximum pay out. salary. The maximum
executive directors bonus
• T he packages will be sufficient to recruit
individuals of the required calibre to lead the In determining any such ‘buy out’, the Committee
Promotor Score) • The profit figures utilised opportunity is 50% of will consider all the relevant factors including
for pay out may be adjusted business and effectively execute the strategy for
• Individual performance base salary. members; the likelihood of the awards vesting should
(individual balanced scorecard at the discretion of the
•
Remuneration Committee in Under ‘Leading for Value’ the candidate have remained in their previous
objectives). The Committee will look to align the
line with approved principles maximum achievement employment, the form in which they were awarded
The new proposed bonus against all performance remuneration package offered with the Society’s and the time over which they would have vested.
scheme; ‘Leading for Value’ to ensure a true and fair view
of performance is applied. criteria could result in a broader remuneration policy; and, The buy-out will vest no faster than any awards
Bonus is driven by :
• Delivery of key strategic • Bonuses for executive
directors will be subject to the
bonus of
• 75% of base salary for •
The Committee will ensure that the level of pay
is necessary but not excessive.
they replace nor the value exceed the aggregate
amount of unvested variable remuneration.
milestones the Chief Executive
relevant regulatory disclosures.
• Enhancement of member value • The Committee reserves • 50% of base salary for Bonus buy outs will be liable to forfeiture or
• Environmental, social and other executive ‘clawback’ in the event of early departure and are
the right to apply a malus
governance (ESG) metrics.
adjustment (reduce bonus directors. executed in line with Regulation.
partly or fully, for current
and previous years which
Retention payments
have not yet been paid) and to
apply clawback (recover bonus The approach to rewarding retention payments is considered on an exceptional basis and will be agreed
payments already made) as by the Remuneration Committee and subject to the relevant regulations, deferral, malus and clawback and
applicable. Remuneration Committee discretion.
• Bonus pay outs are subject to
clawback for up to a maximum
of ten years.
Leaver arrangements and loss of office
• In addition to the above, for Notice period The standard notice period is 12 months from the Society and 12 months from the
the ‘Leading for Value’
scheme, the committee will
executive directors.
carry out a pre-grant In normal circumstances, executive directors will be required to work their notice
assessment before period. In the event executive directors are not required to fulfil their notice
determining individual period, they will receive a payment in lieu of notice, or they may be placed on
eligibility. The outcome of garden leave.
this assessment will determine
participation and maximum Termination Typically, termination payments will consist of basic salary and other contractual
opportunity for individuals payment benefits for the notice period, the emphasis being to not reward failure.
(subject to the overall scheme
maxima as set out in the Annual bonus Subject to Remuneration Committee discretion and the Society’s risk overlay
‘opportunity’ column). process, executive directors who resign from the Society’s will retain eligibility to
any deferred payments earned in previous years.
Benefits Executive directors receive All colleagues, including Benefits provided to
benefits to ensure their executive directors, have access executive directors
total package is in line with to ‘My Benefits’, a flexible include car benefits,
Chairman and non executive directors’ remuneration
market practice and enable benefits platform enabling private medical
the attraction and retention colleagues to choose the most insurance, life cover and
Operation Opportunity
of executive directors of the appropriate benefits for them. insured sick pay.
required calibre. Chairman fees Reviewed and approved by the Remuneration Fee levels take into account
Committee on an annual basis (the Chairman does time commitment for the
not participate in discussing this item, if a member of role and practice at other
Retirement The Society’s pension Executive directors are eligible From April 2021, all
the Committee). organisations.
benefits arrangements support the to participate in the Society’s executive directors
recruitment and retention of defined contribution pension receive a contribution Non executive Reviewed and approved by the Board on an annual
executive directors through scheme. in line with the wider basis.
the provision of competitive Where contributions exceed colleague group equal to director fees
retirement benefits. the annual or lifetime a maximum of 11% of • Non executive directors receive a basic fee.
allowance, executive directors
may be permitted to take a
base pay.
•
An additional supplement is paid for serving on
or chairing a Board Committee.
•
cash supplement instead of
contributions to the plan. Non executive directors do not participate in
any performance pay or pension arrangement.30 31
Notice of Find out more
• For a copy of the full 2020 Annual Report and Accounts, visit ybs.co.uk/annualreport,
Meeting email agm@ybs.co.uk or contact us from 23 March 2021. If you are visiting our branches
for an essential transaction, copies will be available from 29 March 2021.
• Find out more about your directors on pages 19 to 23.
How to vote
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
The Annual General Meeting (AGM) of Yorkshire Building Society will be held when you complete the enclosed voting form or vote online. Your proxy does not have to be a
at 2.30pm on Tuesday 27 April 2021 at Yorkshire Building Society, Yorkshire member of the Society.
House, Yorkshire Drive, Bradford BD5 8LJ for the following purposes: If you appoint anyone other than the Chairman of the meeting as your proxy, they will
unfortunately not be permitted to attend the AGM in person. In these circumstances, your
appointment will be deemed to be the Chairman of the meeting. This will ensure that your vote
still counts.
Completed voting forms must be received by the Society’s scrutineers by 5pm on Friday 23 April
Ordinary resolutions Election and re-election of directors 2021. For more information on how to vote, see the enclosed letter and voting form.
1. To receive the Directors’ Report, the 5. To elect Mark Alistair Parsons If you have any queries, please call or email using the details on the enclosed letter.
Annual Accounts, the Annual Business 6. To re-elect Neeta Avnash Kaur Atkar
Statement and the Auditor’s Report for
7. To re-elect Guy Lawrence Tarn Bainbridge
the year ended 31 December 2020.
8. To re-elect John Robert Heaps
A Summary Financial Statement is
included on pages 12 to 13.
9. To re-elect Alison Elizabeth Hutchinson the event
10. To re-elect Alasdair Bruce Lenman
Along with many other building societies we’ve
2. To approve the re-appointment of 11. To re-elect Guy Paul Cuthbert Parsons
PricewaterhouseCoopers LLP as auditor of had to make some changes to this year’s AGM.
12. To re-elect Michael Charles Regnier
the Society to hold office until the conclusion As we continue to face the challenge of the
13. To re-elect Stephen Cameron White
of the next Annual General Meeting. COVID-19 pandemic, unfortunately you won’t
To comply with legislation, the Society’s Having formally evaluated their performance, be able to attend the AGM in person this year.
members have to appoint an auditor the Board considers that all the directors
Members and guests who travel to the meeting
each year. seeking re-election continue to be effective
and that they demonstrate the necessary will not be admitted.
3. To approve the Directors’ Remuneration commitment to the role. We’re recording the meeting so you’ll
Report for the year ended 31 December
2020.
be able to watch it the following day from the
By order of the Board comfort of your own home. The recording will
4. To approve the Directors' Remuneration Simon Waite, Group Secretary
be available until the end of May 2021.
Policy. 23 February 2021.
Resolutions 3 and 4 are advisory votes
as explained in the Summary Directors' Just go to
Remuneration Report on pages 24 to 29, ybs.co.uk/2021meeting
which also sets out a summary of the
Directors' Remuneration Policy changes. from Wednesday 28 April 2021.
There is a full version of the Directors'
Remuneration Report in the 2020 Annual
Report and Accounts.a year of
community
spirit
mer weather
Due to the war
d the time
in spring, I foun
my garden…
to work hard in
any hours in
Despite 2020 being a testing year, Spending so m
t to chat to so
our online member community; My Voice, the garden, I go
ople.
showed resilience and drew some personal many lovely pe
positives from last year.
The biggest positive for many was the
health and wellbeing of themselves and
their loved ones.
I’ve always appreciated my
Many enjoyed the slower pace of life and nearest and dearest, but have had
being able to spend more time at home and a revitalisation of it over 2020.
some used the time to learn and develop
I have also re-found the love of
new skills and take up new hobbies.
home life, a good book…
i.e. the little things.
g from home
I’ve found workin
ging, but life
has been challen I’ve had the chance to learn
co mmute has
without the daily new skills and realise what
I love
I’v e spent less
been a blessing. doing in 2020. I am writing a
n tim e to utilise
money and take novel and planning to pub lish it,
saving.
different ways of e don e
something I wouldn’t hav
ma l yea r.
if 2020 had been a nor
References to ‘YBS Group’ or ‘Yorkshire Group’ refer to Yorkshire Building Society, the trading names under which it operates (Chelsea Building Society,
the Chelsea, Norwich & Peterborough Building Society, N&P and Egg) and its subsidiary companies.
Yorkshire Building Society Charitable Foundation is a Registered Charity (No: 1069082) and a Registered Company (No:03545437). Registered Office:
Yorkshire House, Yorkshire Drive, Bradford BD5 8LJ.
Small Change Big Difference® is a registered trademark of Yorkshire Building Society.
End Youth Homelessness (EYH) is a national movement of local charities working together to end youth homelessness in the UK. EYH trades through its
designated Administrator, Centrepoint (charity number 292411).
Age UK is a charitable company limited by guarantee and registered in England and Wales (registered charity number 1128267). Registered address:
Tavis House, 1-6 Tavistock Square, London WC1H 9NA.
Yorkshire Building Society is a member of the Building Societies Association and is authorised by the Prudential Regulation Authority and regulated by
the Financial Conduct Authority and the Prudential Regulation Authority. Yorkshire Building Society is entered in the Financial Services Register and its
registration number is 106085. Head Office: Yorkshire House, Yorkshire Drive, Bradford BD5 8LJ. ybs.co.uk
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