UNITED IT FEELS GOOD BEING ON THE SAME TEAM - ANNUAL REVIEW 2019 - Yorkshire Building ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
UNITED
IT FEELS GOOD BEING
ON THE SAME TEAM
ANNUAL REVIEW 2019
2 3
The world is changing but our purpose
is the same
For the past 155 years our purpose has been I make sure
to make a real difference to people’s lives, by we’re a well run
helping them with the financial tools they need
to secure a home, supporting their financial organisation which
resilience through savings and creating acts in your best
value for our members. This is our purpose at
Yorkshire Building Society and we call it Real interests.
Help with Real Life. You can see how we’re
doing so far on the following pages.
As a building society we put our members at almost entirely in the UK we expect the direct
the centre of what we do. It’s important that impact on the Society is likely to be low. Your
our objectives serve your interests. Which Society is in good shape, we’ve got capital
is why we focus on offering consistently behind us and we’re always ready to protect
competitive mortgage and savings rates, ourselves from any unexpected changes.
products that meet your needs and
maintaining a high level of service. Your Board represents you
One of my responsibilities is ensuring
I’m pleased to let you know 2019 your Society’s safety and soundness. I
was a good year for your Society make sure we’re a well-run organisation,
In a competitive market place we’re in which acts in your interests. Your Board
a strong financial position despite the combines a mixture of skills and experience
uncertainty in the wider economy, and made needed to successfully run a major financial
excellent progress against our plan. organisation. You can find out about who your
This puts us in a good position going forwards. Board members are on pages 20-24.
On pages 6 to 11, your Chief Executive, We work to the highest standards of corporate
Mike Regnier, reviews how your Society governance and will continue to do so. This
has done in 2019. supports the long-term success of the Society
and ensures we’re always doing the best for
Looking to the future
you – our members.
The UK’s exit from the European Union has
Victoria Gate, Leeds created political and economic uncertainty John Heaps, Chairman
since the 2016 vote to leave. As we operate 26 February 2020
A welcome You’re a member - not just a customer
from your Whether you’re a saver or a borrower,
Chairman you’re a member of Yorkshire Building
Society. We’re owned by you, which means
we act in your interests. We’ll continue
to help you through challenging and
uncertain environments and support you
to achieve your life goals.
4 5
Place to Financial
call home wellbeing
We’re here to help people to We’re here to help people
have a place to call home. towards greater financial
This includes people choosing us to be wellbeing.
their mortgage provider, people renting
Whether they’re customers choosing to
from our customers who are buy-to-
build their savings pot with us, directly
let landlords, people living in housing
or through our partners, or people
association accommodation we have
who have benefited from financial
A place called home
funded, or even young people receiving
our support through our partnership with Financial Wellbeing literacy and employability support via
our Money Minds and Career Minds
End Youth Homelessness.
community programmes.
49,776 84,008
people into people with
greater financial 7,322
a home People
2,005 in 2019 206 wellbeing supported
People Homeless
1,254 in 2019 with financial
in social young people literacy
housing People
supported with
employability
75,432
1
3,271 44,294 skills
Renters Homeowners New customers building
their savings pot
1
Includes all new savers who have opened instant and limited access accounts, or have started saving directly from their salary
in 2019. Excludes fixed-term accounts.
6 Annual review | 7
I’m happy to report that we’ve had a
good year, making excellent progress
on delivering on our purpose of
providing Real Help with Real Life
for our members.
In 2019 we generated £185m in We were set up to help
core profit, similar to 2018, and members achieve the things
£167m in profit before tax, £193m they want in life
in 2018. This helps to support
We continue to do this today to help
your Society’s long-term financial
our members with the challenges
sustainability. Alongside this
they face. With the Bank Rate set by
we've continued to create value
the Bank of England at a near record
for members, giving £95m back to
low this has meant low rates for
members through the difference in
savers, which has been the case for
our savings rates, compared to the
several years. Average house prices in
lower market average. England and Wales climbed from three
In 2019 we also donated £1m and a half times the average full time
to local communities through workers salary in 1997, to over seven
charitable giving and colleague times the average earnings in 20183,
volunteering, and worked hard to which means buying a first home, or a
reduce our environmental impact. larger home for a growing family, has
become increasingly difficult.
I’m particularly pleased this is all
against a backdrop of positive The way people live and work
external feedback. Our Net
is changing
Promoter ScoreTM which measures
Busy lives and advances in
how satisfied our customers are
technology mean greater demand
with the services we provide and
and opportunity to transact in a more
how likely they'd be to recommend
accessible way, but we also know that
us, has risen 10 points to +512.
many of our members still value face-
I’m proud of this as it shows that
to-face services.
members really value the service
our colleagues provide. We want to help you with these very
real difficulties and to achieve your
Mike Regnier – We’re delighted that our members
and industry professionals continue
financial goals. This is why our purpose
is to provide Real Help with Real Life,
your Chief Executive, to recognise our hard work, as
shown by the number and calibre of
by delivering three strategic ambitions
– helping people to have a place to call
reviews 2019 awards we won in 2019, including
Best Overall Mortgage Provider
and Best Building Society Savings
home, helping them towards greater
financial wellbeing and delivering
value to our members.
Provider in the Moneynet Personal
Victoria Quarter, Leeds Finance Awards.
2
KPMG Nunwood Customer Voice Programme. January-December 2019. Based on 14,566 completed
interviews with customers. Net Promoter Score and NPS are trademarks of Satmetrix Systems, Inc Bains &
Company Inc., and Fred Reichheld.
3
Office for National Statistics. Housing affordability in England and Wales 2018 (2019).
8 9
We’ve been helping more Investing in our digital capabilities is an
WE KEPT OUR FOCUS people have a place to call home essential part of our future
on our five strategic priorities, which enable We introduced a number of changes to help
us to deliver our purpose As well as supporting members who want our intermediary lender,
first time buyers, including extending our to use our online services, it will make our Accord Mortgages Ltd.
maximum mortgage term to 40 years. We also
Help supported older borrowers who may be looking
business more effective and speed up our This has reduced mortgage
Help ensures we focus on providing processes. This will give our colleagues more application to offer times to
to downsize or remortgage to help younger
targeted help for more members with the time to help you, whether you choose to as little as 24 hours and vastly
generations, by raising our maximum lending
real financial challenges they face. interact with us online, in our contact centre or reduced the amount of paper
age to 80.
face-to-face in our branches or agencies. we use.
Digitalise In 2019 we launched an overpayments
We’re also ensuring we Digitalise our We’ve made some solid progress on this We’re focusing on our
calculator to support those wanting to pay off
business to become more agile, efficient priority in 2019, including investing in robotics digital agenda in 2020 and
their mortgage quicker, changed our mortgage
and effective. switching policy to make it faster and easier and and automation to increase the efficiency of acknowledge we still have a
introduced a 15 year fixed-rate mortgage to give some of our processes. We also introduced lot more to do, especially given the
Unleash greater future certainty for borrowers. We also a new online platform for brokers through speed of change in the wider market.
Through our Unleash priority, we’re raised £244,000 for End Youth Homelessness,
working to support every one of our enabling 206 vulnerable young homeless people
colleagues to maximise their full potential. to have a safe place to call home.
Expand We’re expanding to make the most of new opportunities
Expand our reach, physically and digitally,
so we can help more people.
and potential partnerships
Best First We want to reach more people and make We’ve been expanding our network where
Protect Time Buyer sure we’re supporting both new and existing we believe a new agency could provide good
To make sure we’re able to serve existing
and future members for years to come, we Mortgage members and customers. opportunities and we’ve turned eight of our
existing branches into agencies in 2019. This
Protect your Society and our stakeholders Provider at has enabled us to continue to provide face-to-
We’re committed to continuing
by making sure the organisation is
financially and environmentally
the Moneynet to offer a national network
face service in a more cost-effective way.
sustainable, with robust controls to Awards of face-to-face service in a
minimise and mitigate against risk. cost-effective way.
For the last 60 years, we’ve been doing this
by partnering with agency proprietors –
And helping towards greater financial wellbeing trusted local business owners who work
To help our savers, we paid rates on average whilst rewarding them for saving with us. with us to provide our services
0.34%4 higher than the market average. We We helped 135,000 employees in over 100 from their business premises.
launched a competitive child’s regular saver organisations to save direct from their salary.
account and a tiered easy access account to help
In the community, our colleagues volunteered
savers withdraw their money in an emergency,
to deliver financial education to 7,000 young
people around the UK through our Money
Minds programme. I was proud to work with
Best Building Society colleagues at our Strand branch in London to
Savings Provider at give a session to pupils at Grafton Primary
School in Islington, where I saw first hand the
the Moneynet Awards difference an introduction to financial literacy
makes to young people.
Y BS Group average savings rate compared to rest of market average rates based on savings stock from CACI’s Current Account
4
and Savings Database (CSDB). Data period January - November 2019.
10 11
Our people are our greatest asset, Playing our part in local Three million customers trust us to they need it and pay our bills, was 13.8%,
they play a vital role in everything communities finance their homes and look after also above the minimum requirement. Our
leverage ratio, which demonstrates our ability
we do A key part of our role in society is to provide their savings
to cope with unexpected events, was 5.8%.
In return, we make sure that they feel careers and development for our colleagues We want to help as many people as we can
respected, valued and proud to work for and financial services to our members, but for years to come, and to do this, we must We continued to keep a close eye on costs,
Yorkshire Building Society. Our ambition is we believe we can achieve much more by be financially sustainable. In 2020, we’ll be reducing management expenses – the money
to be a leading employer and unleash the also being active in our local communities. continuing to keep costs down and maintain which we use to run your Society – to £290m
our financial strength. This will enable us to from £311m in 2018, and resulting in a cost
potential of every colleague. That’s why
Our branch and agency network in 243 cities, carry on delivering value for money for our to core income ratio of 60% in 2019. All of
we’re developing a culture of supporting and
towns and villages, alongside our office members, whilst investing in better products our profit is retained for financial strength or
engaging all colleagues as well as prioritising
sites in Bradford, Leeds and Peterborough and services. reinvested in your Society to provide better
their wellbeing and promoting diversity
give us the opportunity and scale to make a products, rates and services for our members.
and inclusion. Like all organisations, we have a duty to
significant impact.
make sure we are minimising our impact on
We've continued to develop programmes
the planet. We’ve worked hard to reduce our Controlling our costs will remain
to support our colleagues' physical, mental carbon emissions, the waste produced by our
and financial wellbeing. We also launched an
We’re really proud of the a focus, to ensure we're able to
positive impact we’re making office sites and face-to-face network and the
online portal for colleagues to choose flexible amount of paper we use. We’ll continue with deliver value for money for you.
benefits that support their personal needs. thanks to our members and
these initiatives in the coming year to make
colleagues who are passionate sure we remain sustainable and responsible.
about helping their You can find out more about how you can help We don’t just consider the financial figures,
Included in the 2019 communities to thrive. the environment and save money on pages we look at a number of key performance
indicators to give an overall and wider
16-17.
Working Families Top measure of how we’re doing. Some of these
In 2019, 51% of colleagues took part are summarised on the following pages and
30 UK employers for in volunteering opportunities, donating
We remain financially strong
should provide you with reassurance that
the third year running over 14,500 hours.
Our financial performance is closely
monitored by your Board.
your Society is in safe hands.
Finally I’d like to thank all of our colleagues
Our Common Equity Tier 1 ratio of 16.6% is
and business partners for the role
well above the minimum requirement and
they played in delivering such a strong
ensures we’re protected from losses. Our
performance in 2019.
liquidity ratio, which measures our ability to
lend mortgages, return savers’ money when
Mike Regnier | Chief Executive
26 February 2020
12 | Performance at a glance Performance at a glance | 13
Savings Accounts Opened Statutory Profit Net Promoter ScoreTM
243,000 197,000 in 2018
£ 167m
£193M in 2018
+51
+41 in 2018
6
Helping thousands of members Profit we earned from our This measures how willing our
save for their future. ongoing business operations, customers are to recommend us
excluding taxes. to others.
Average Savings Rate5 Core Operating Profit Mortgage Balances
1.09
0.34% above the market
% £ 185m
£181M in 2018
Grown by
3.5%
4.7% in 2018
average of 0.75%
The profit we earned excluding
We use the interest from our
This equates to more taxes, one-time charges and
mortgages to give back to
than £95m of benefit infrequent events.
savers and invest for the future.
given back to members.
Cost to Core Income Ratio Colleague Engagement Score7 Community Investment
Contribution
60%
63% in 2018
7.4
OUT OF 10
£ 1m
£1.4M in 2018
The lower this ratio the less Compared to industry average
score of 7.6. Our contribution to local
we’re spending to generate communities through charitable
every pound of our income. Reflects how engaged our
colleagues feel working here. giving and volunteering.
Liquidity Ratio Colleague Volunteering Carbon Footprint Reduction8
Reduced by
13.8
13.9% in 2018
% 14,535 16,923 in 2018
hrs
17% in 2019
Reduced by 16%
in 2018
Measures our ability to lend Hours volunteered by
to borrowers, give money back our colleagues.
to savers when they want it How much we’ve reduced our
and to pay our bills. carbon emissions year on year.
5
YBS Group average savings rate compared to rest of market average rates based on savings stock from CACI’s Current Account and 7
Peakon colleague survey conducted October 2019. Score calculated from four separate questions.
Savings Database (CSDB). Data period January - November 2019. 8
All YBS Carbon Emission data has been verified by Ricardo AEA limited.
6
KPMG Nunwood Customer Voice Programme. January - December 2019. Based on 14,566 completed interviews with customers. Net
Promoter Score and NPS are trademarks of Satmetrix Systems, Inc Bains & Company Inc., and Fred Reichheld.
14 15
Summary Financial Statement
Group financial position at end of year 2019 2018
£m £m
Assets
Liquid assets 5,602 5,505
Details of your Society’s financial performance in 2019. Loans to customers 37,984 36,702
Derivative financial instruments 368 564
Fixed and other assets 324 284
This financial statement is a summary of information in the audited Annual Report and Accounts, Total assets 44,278 43,055
the Directors’ Report and the Annual Business Statement, all of which will be available to
Liabilities
members and depositors free of charge at every office of Yorkshire Building Society, from
Shares 30,677 29,559
23 March 2020. The information is also available online at ybs.co.uk/annualreport . The auditors' Borrowings 9,924 10,140
report in relation to the full financial statements was not qualified in any respect. Derivative financial instruments 231 98
Other liabilities 153 139
Summary Directors’ Report Subscribed capital - 6
The information contained in the Chairman’s welcome and Chief Executive’s review on pages 2 to Subordinated liabilities 626 585
13 addresses the requirements of the Summary Directors’ Report. Reserves 2,667 2,528
The directors consider that the Group has adequate resources to continue in operational Total members’ interests, equity and liabilities 44,278 43,055
existence for the foreseeable future. Accordingly, the going concern basis has continued to be
Summary of key financial ratios 2019 2018
adopted in preparing the Annual Report and Accounts. % %
Approved by the Board of Directors on 26 February 2020:
Gross capital as a percentage of shares and borrowings 8.11 7.86
John Heaps - Chairman The gross capital ratio is the relationship between the Group’s capital and
its liabilities to investors. Gross capital represents the aggregate of general
Mark Pain - Vice Chairman reserve, cash flow hedge reserve, fair value through comprehensive income
Mike Regnier - Chief Executive reserve, subordinated liabilities and subscribed capital.
Liquid assets as a percentage of shares and borrowings (liquidity ratio) 13.8 13.9
2019 2018 The liquid asset ratio measures those assets available to meet requests by
Group results for the year £m £m savers to withdraw their money, to fund mortgage advances and to fund
general business activities. It expresses cash and assets easily converted
Net interest income 464.6 471.7 into cash as a percentage of the Group’s liabilities to investors.
Net gain/(loss) from financial instruments held at fair value (22.0) 20.1 Profit for the year as a percentage of mean total assets 0.30 0.35
Net realised profits 6.3 8.0 This ratio expresses profit or loss, after tax, as a percentage of average total assets.
Other income and charges 8.5 10.4
Management expenses as a percentage of mean total assets 0.66 0.73
Total income 457.4 510.2 The management expense ratio measures how cost effective the Group is.
Administrative expenses1 (289.6) (311.2) It is calculated by comparing the management expenses (administrative
expenses opposite) for the year with average total assets.
Provisions2 (0.6) (6.5)
Profit before taxation 167.2 192.5 Independent auditors' statement on the
Summary Financial Statement to the
We also read the other information contained
in this Annual Review and consider the
to the full Annual Accounts. Our report on the
Society’s full Annual Accounts describes the
Taxation (38.3) (42.7) 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
material inconsistencies with the Summary the Directors’ Report.
Profit for the year 128.9 149.8 Statement of Yorkshire Building Society (the
Financial Statement. The other information
‘Society’) set out on pages 14 to 15, which
comprises only the Chairman’s welcome, the Opinion
comprises the Group results for the year, the
1
Includes administration expenses, depreciation and amortisation. Chief Executive’s review and the Summary In our opinion the Summary Financial
Group financial position as at 31 December
Directors' Remuneration Report. Statement is consistent with the full Annual
2019 and the summary of key financial ratios.
This statement, including the opinion, has Accounts, the Annual Business Statement and
2
‘Provisions’ encompasses provisions for impairment of loans and advances, restructuring costs, onerous lease
Respective responsibilities of directors been prepared for and only for the Society’s the Directors' Report of Yorkshire Building
costs and customer redress. and auditors members as a body in accordance with Society for the year ended 31 December
Section 76 of the Building Societies Act 2019 and complies with the applicable
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 26 February 2020.
16 17
Living greener Quick habits to change
and saving money There are any number of ways to be more eco-friendly and it’s a myth that it will
cost you more cash, in fact most of them could save you money in the long run.
• Unplug your mobile phone's charger when the
battery is fully charged.
The UK became the first major economy to commit to reach zero carbon • Turn off devices on standby.
emissions by 2050. There’s a long way to go to reach this target but there
• It sounds obvious, but turn the light off when you leave a room.
are plenty of changes we can make ourselves.
• Switching to energy saving light bulbs not only uses around a
quarter of the electricity than an ordinary lightbulb, but they
Maybe you’ve already also last 10 times longer.
got your refillable
The average number of • The tumble dryer is one of the most expensive
water bottle and you’re
plastic carrier bags a appliances to run in the home, so make sure
a recycling pro but you’re drying your clothes outside when you can.
person uses has fallen
10
bags
from 140 in 2014 to just
10 bags in 2018/20199,
what else could you be
doing to live greener
• Making a cuppa? Only boil as much water as you need. Over a year
boiling a full kettle just twice a day costs around £28.9311.
without taking a hit on
thanks to the 5p charge. • Save up to £60 a month by only buying food and drink
your wallet?
that you actually need. You’ll also be reducing your
food waste. Food waste generates 19m tonnes
of greenhouse gases over its lifetime12.
More investment for better returns
• Keep hold of your hard-earned heat. Insulating your home is by
far the best way to save heat in the winter, keep cool in the
summer and save money on your energy bills.
• Be smart about your heating. Smart thermostats and home
heating systems connect your heating to the internet. Did you know We’re doing
This could save you a cosy £75 per year10. we’re carbon our bit too.
• Efficient white goods in the long run will save you neutral? Yorkshire Building
energy and money, the upfront cost should pay Society has been
off so freshen up your freezer. carbon neutral
since 2016.
9
UK Government Statistics gov.uk/government/publications/carrier-bag-charge-summary-of-data-in-england/single-use-plastic- 11
Confused About Energy confusedaboutenergy.co.uk/index.php/energy-saving-tips/electrical-appliances/64-kettle
carrier-bags-charge-data-in-england-for-2018-to-2019 12
Love Food, Hate Waste lovefoodhatewaste.com/article/spoiled-rotten
10
Energy Saving Trust energysavingtrust.org.uk/blog/seven-steps-saving-energy-home
18 19
Moving with the
digital times Quiet
In an increasingly digitalised
world, we’re improving our service
to make life easier for you.
Love web chat... it’s just so much
easier to quickly deal with most
other queries.
Hour
a new way to
help our customers
Webchat Got great help from Billy today.
Helpful and good humoured.
I gather this is a new service; given
This online service helps customers looking to my experience I’d say long may In May 2019 we launched a trial of 'Quiet Hour' screens turned off and rooms were
take out new savings and mortgage products, or it continue. – a quieter time to help customers who may be available for quiet conversation.
with any general enquiries they may have. It’s affected by conditions such as autism, epilepsy,
operated by a team of trained representatives Had a good experience with this dementia, mental health issues, visual or We’re the first financial services
and it is fast – with an average answer time of today mostly because the person at hearing impairment, or mobility concerns. provider to offer quiet hours on
12 seconds. the other end was knowledgeable such a scale, and the reaction to it has been
and provided prompt answers. overwhelmingly positive from customers and
23
In the first seven months of introducing the
charity support groups.
new service we completed 8,000 webchats,
YBS internal feedback from customers
using the web chat service. branches and agencies
with lots of positive feedback – 95% rating the now offer the quiet hour. We were thrilled to win an award for our
service as excellent or good. We'll be rolling it out to all our quiet hour initiative - the Customer Service
branches and agencies very soon. and Treating Customers Fairly category at the
Mortgage Finance Gazette 2020 awards. This
Coming Soon... Managing our impact on the
environment and reducing costs Eight branches took part in the trial, which
is testament to the commitment of our branch
colleagues who understand their customers
our new savings app involved an hour on a Wednesday near the end of and can offer this service to benefit those who
One way we can do this is by providing
the day when lights were dimmed, large display need it.
communications to members in a digital
One of our most exciting digital
format where we can. You can help us by
investments is our new app, which we’ll
providing your up-to-date email address over
hopefully be launching during 2020. We
know it’s not always convenient to call
the phone, in any branch or agency and by Your Board
us, pop into a branch or even log onto our
registering your account(s) online at working for you
ybs.co.uk/register if you
website – the app will help you check your
haven’t already done so. There are ten non executive directors who
savings account and manage your money
Once you’ve registered directors you can are independent and not
on the go.
you can update your vote for at this year’s employed by the Society. All
At launch the app will be accessible AGM. your directors bring a variety
email address easily if
through setting up a passcode, or using All the directors are of skills and experience.
it ever changes.
your biometric data and will be available up for re-election and You can find out about the
on both iOS and android phones and this period of stability specialist committees and
tablets. Once it’s launched we’ll in terms of our Board directors that attend these
continue to add new features. membership has helped in the Annual Report and
us to remain focused on our Accounts, available at
strategy. ybs.co.uk/annualreport or in
We have a number any branch or agency.
of executive directors Find out more about your
who work full time for Board, and who represents
the Society, and you on the following pages.20 | Directors for re-election Directors for re-election | 21
John Heaps Guy Bainbridge
Chairman Independent Non Executive Director
Joined the Board in 2014 Joined the Board in 2019
My principal responsibility as your Chairman is to ensure the Since joining the Board at the start of last year, I’ve been
long term safety and soundness of your Society. This means impressed by the passion shared by all Board members and
ensuring a sustainable future for both existing as well as senior management for our Society. In particular the focus
future customers and members. on its current and future members and colleagues. I’ve spent
I work to develop a Board that comprises highly capable a lot of time since joining making sure our purpose remains
people who are diverse in their skills as well as gender relevant and helping develop a strong strategy to achieve it.
and ethnicity. It is extremely important to me that the As Chair of the Audit Committee I’ll use my banking industry
Board works collectively to develop and oversee the experience to assess and oversee our controls. These are
implementation of a strategy that recognises our roots as a very important for the safety of members’ savings and the
building society, as well as our purpose to provide Real Help safety of business interactions members and customers
with Real Life. have with the Society. I’ll use my auditing experience to help
the Society maintain its financial soundness and the strong
Looking forward I am confident that keeping our members
quality of financial reporting.
and customers at the heart of all we do will ensure our
continued success in the digital and highly competitive
world in which we operate.
Neeta Atkar Alison Hutchinson
Independent Non Executive Director Independent Non Executive Director
Joined the Board in 2017 Joined the Board in 2015
I’m proud to be part of Yorkshire Building Society and it’s a Since joining the Board, my role has been to ensure your
privilege to be a member of the Board. Given my 30 years’ Society remains relevant, competitive and grounded in
experience working in the financial services industry, in what matters most to you, our members. I both support and
risk management and as a regulator - and being a member challenge the senior management by drawing on over 30
myself - I bring invaluable experience. It allows me to years of experience working as a leader in financial services,
constructively challenge and help oversee the strategy of technology and consumer facing businesses. I’m passionate
your Society. about embracing this turbulent environment to ensure we
Your Society should be proud of its colleagues and the can continue to serve both current and future generations of
way they consistently and continuously provide fantastic members.
service to our members and customers. The year ahead I would be privileged to continue to serve on your Board. I
continues to be challenging, so my focus will be to ensure will continue to focus on our wider role within society and
that we continue to provide brilliant service and suitable ensuring we’re doing what we can to limit the impact on the
products for all members and customers. environment and support our communities alongside our
core business.22 | Directors for re-election Directors for re-election | 23
Gordon Ireland Mark Pain
Senior Independent Non Executive Director
Independent Non Executive Director
& Vice Chairman
Joined the Board in 2015
Joined the Board in 2013
My role as an independent Non Executive Director on the With a background in financial and risk management,
Board is to contribute to the development of your Society’s business transformation and growth, across a number of
ongoing strategy and ensure we provide value to our different companies and sectors, I believe I have the skills
members, customers and all our stakeholders including our and experience to continue to help your Society navigate its
colleagues. way through the challenging operating environment that we
My history of being a chartered accountant and working for are currently facing.
36 years at PricewaterhouseCoopers, including 24 years 2020 will continue to be challenging for the Society, with
as a partner, means I have great knowledge of the financial political and economic uncertainty adding to increased
sector. My auditing experience allows me to ensure your competitive pressure in the mortgage market and continuing
Society remains compliant and puts the interests of the low interest rates. I will do everything I can to help support
members first. your Society to remain safe, secure and sustainable.
Since joining the Board in 2015 I feel as a building society
we’ve made great strides and I’d be privileged to be
re-elected.
Alasdair Lenman Guy Parsons
Chief Finance Officer Independent Non Executive Director
Joined the Board in 2017 Joined the Board in 2013
I’ve been the CFO of your Society for two years and I would I’m really proud to represent an organisation which plays
very much like the opportunity to continue this role. My such an important part in helping people shape better
focus over the last 12 months has been to ensure that we financial futures for themselves. With current low interest
navigate everything that political uncertainty and regulatory rates, we need to support our loyal savers and give them the
change can throw at us and still build our strength in terms best value. At the same time, support our younger members
of capital, liquidity and profitability. and customers who are trying to buy their own home.
Since joining the Board, I’ve enjoyed nurturing a strong and I’ll draw on my commercial expertise to strengthen our
stable Society. If re-elected, I will continue to work with the customer services, offer support and advice to the Society’s
Board to deliver sustainable benefits for our members, by executive team, to make sure that everything is delivered
driving strong commercial outcomes and highly effective effectively and efficiently.
risk management.24 | Directors for re-election 25
Mike Regnier
Notice of Meeting
Chief Executive The Annual General Meeting (AGM) of Yorkshire Building Society will be held at
Joined the Board in 2014 2.30pm on Tuesday 28 April 2020 at The Met Hotel, King Street, Leeds LS1 2HQ
for the following purposes:
I’m extremely proud to work for Yorkshire Building Society. As
we face an increasingly uncertain future and a more competitive Ordinary resolutions Re-election of directors
environment, it’s more important than ever to meet our
members’ expectations and provide solutions to their needs. 1. To receive the Directors’ Report, the 5. To re-elect Neeta Avnash Kaur Atkar
Annual Accounts, the Annual Business 6. To re-elect Guy Lawrence Tarn Bainbridge
Continuing to provide the face-to-face service that many of our
Statement and the Auditor’s Report for 7. To re-elect John Robert Heaps
members’ value is something I’m committed to. Working with
the year ended 31 December 2019. 8. To re-elect Alison Elizabeth Hutchinson
some of the UK’s largest financial services firms, I’ve learnt how
to apply technology to improve the quality and consistency A Summary Financial Statement is 9. To re-elect Gordon Roland Ireland
of what we do behind the scenes, so we can provide the best included on pages 14 to 15. 10. To re-elect Alasdair Bruce Lenman
possible service to customers however they choose to deal 11. To re-elect Mark Andrew Pain
2. To approve the re-appointment of
with us. I’ve also seen how to run an efficient organisation
PricewaterhouseCoopers LLP as auditor of the 12. To re-elect Guy Paul Cuthbert Parsons
which will ensure that your Society remains a sustainable
business for future generations. Society to hold office until the conclusion of the 13. To re-elect Michael Charles Regnier
next Annual General Meeting. 14. To re-elect Stephen Cameron White
I’m passionate about creating an inclusive working
environment and a culture where all of our colleagues feel To comply with legislation, the Society’s members
have to appoint an auditor each year. Having formally evaluated their performance,
valued and supported, so everyone can contribute to providing
the Board considers that all the directors
the best value and service that we can to all of our customers. 3. To approve the Directors’ Remuneration seeking re-election continue to be effective
Report for the year ended 31 December 2019. and that they demonstrate the necessary
commitment to the role.
4. To approve the Directors' Remuneration Policy.
Resolutions 3 and 4 are advisory votes By order of the Board
as explained in the Summary Directors' Simon Waite, Group Secretary
Stephen White Remuneration Report on pages 26 to 31, which 26 February 2020.
Chief Operating Officer also sets out a summary of the Directors'
Joined the Board in 2016 Remuneration Policy changes.
There is a full version of the Directors'
Remuneration Report in the 2019 Annual
An early career in a building society branch taught me about Report and Accounts.
the financial challenges affecting customers day-to-day.
Coupled with my international experience at board level,
I have a unique perspective on balancing the pressures of
being competitive and ensuring the needs of members and Find out more
customers are met through our service and wide range of • For a copy of the full 2019 Annual Report and Accounts, call into a branch or agency from
mortgage and savings accounts. 23 March 2020, visit ybs.co.uk/annualreport or contact us.
Being an organisation focused on our members drives • Find out more about your directors on pages 20 to 24.
my passion for the Society. I’m proud that we’ve reduced
processing times for mortgages and maintained savings
rates which are higher than average in our sector.
How to vote
Looking ahead, I hope my legacy is one that protects and
Voting by post or online means that you are appointing someone else (known as your proxy) to
enhances the Society for the future. I’m committed to seeing
attend the AGM and vote on your behalf. You can tell your proxy how to vote on each resolution
our digital strategy come to life and will continue to put our
when you complete the enclosed voting form or vote online. Your proxy does not have to be a
members first and build a business we can all be proud of.
member of the Society.
Completed voting forms must be received by the Society’s scrutineers by 5pm on Friday
24 April 2020. For more information on how to vote, see the enclosed letter and voting form.
If you have any queries, please call or email using the details on the enclosed letter.26 Remuneration report | 27
15
How does the Society approach directors will increase from 50% to 100% of
remuneration and specifically manage base salary. Any payments under the scheme
will continue to be subject to achieving
directors’ remuneration?
stretching financial and non-financial
How colleagues are rewarded and motivated is measures, as well as personal objectives linked
summary a key part in delivering our business strategy;
providing real help with real life for our
to the Society’s key transformation activities
and milestones. Any payments will also be
directors’ members, customers and colleagues. Our aim
is a working environment where colleagues
subject to regulatory underpins including risk
adjustment, deferral, malus and clawback.
Remuneration feel engaged and committed to the Society’s
journey, ensuring they feel valued and
Further details regarding the Building Together
bonus scheme are available online at
Report respected to give their best.
Our approach to remuneration focuses on
ybs.co.uk/annualreport
Executive directors will not receive a pay
more than just base pay. It ensures reward and increase in 2020.
benefit arrangements are fully integrated in
Guy Parsons, Chair of the what we do every day. To attract and retain Our executive directors are highly skilled and
experienced, they’re critical to delivering the
Remuneration Committee, the talent that the Society requires, the
Committee seeks to balance the need for next phase of our business transformation
explains our approach to total remuneration to be competitive in the and new business strategy. As Chair of the
rewarding directors and wider financial services sector, and remain Remuneration Committee, I strongly believe
colleagues. commensurate with our mutual status. that the change proposed is right for the
Society and recommend that members vote for
The Society manages executive directors’ pay its approval at the 2020 AGM.
Victoria Quarter, Leeds
via the Committee, which is made up of three
non executive directors. The Committee is All other aspects of the Remuneration Policy
What are the Directors’ Remuneration Following our annual review of market guided by the Society’s Remuneration Policy remain unchanged.
Report and the Remuneration Policy? practices, we recognised the need to align and is in place to support our colleagues in
better the levels of total remuneration for working together for the benefit of the Society
How have executive directors’ salaries
Every year your Society publishes a changed in 2019?
our executive directors. Subsequently, and and our members.
Remuneration Report. The 2019 report
underpinned by the remuneration principles Executive directors’ base salaries are reviewed
shows directors' remuneration received in Have there been any changes to the
approved at the 2019 AGM, the Remuneration each May at the annual pay review, at the same
2019 (and 2018 for comparison). Every three
Committee (the Committee) has decided to Remuneration Policy following the time as all other colleagues. The Committee
years, or sooner if there’s a policy change, the
Remuneration Policy for the executive directors
increase the maximum variable remuneration Committee’s review? sets the pay for the executive directors. The
opportunity for executive directors. We are 2019 awards for directors’ ranged from 2.2%
is shared with members. At the 2020 Annual After careful consideration the Committee
proposing a revised Directors’ Remuneration to 4.7%, the approach was in line with the
General Meeting (AGM), both the Directors’ has decided to increase the maximum bonus
Policy for approval at the AGM in April 2020. wider colleague group whose awards ranged
Remuneration Report and the Remuneration earning potential for executive directors.
Details of the Directors’ Remuneration Policy from 0.5% to 20.2%.
Policy will be subject to an advisory vote. This is Under the Building Together bonus scheme
are on page 30 of this booklet and the full
due to a change within the Remuneration Policy the maximum bonus opportunity for executive
Remuneration Policy is available online at
for executive directors.
ybs.co.uk/rewardpolicy
We're currently at an important stage in the
As a member, you have a say in how the
Society’s transformation and are working
directors are paid, because you have the
closely with executive directors to deliver our
opportunity to vote on this report through
new vision and business strategy. The new
strategy will require significant transformation an advisory vote at the AGM. We take your
across all areas of the organisation to deliver views seriously and we’ll review the results to
a strong, sustainable performance and consider any appropriate action.
importantly value for you, our members. We
regularly review our Remuneration Policy to
reflect our culture and ensure the successful
delivery of the business strategy.28 29
Individual increases are based on personal delivered in a sustainable and balanced way. How much did the executive directors earn in 2019?
performance, a comparison to similar roles They have approved a bonus payment for
The table below shows the remuneration of the Society’s executive directors for the years ended 31
in the wider financial services market and executive directors, with an eligible executive
December 2019 and 2018. This is audited information.
affordability. In 2019, additional pay awards director achieving, on average, 91.6% of their
were available for the wider colleague group maximum opportunity. For 2019 performance
to recognise high performance and respond year, 99.9% of eligible colleagues will receive
Executive directors’ remuneration - year ended 31 December 2019
to market movements. As a result, in 2019, the a bonus, with all eligible colleagues on Fixed Remuneration
average pay award for all colleagues was 3.0% average receiving 95.4% of their maximum
Executive director Job Title Base Taxable Pension Bonus* Total
(including all executive directors). bonus opportunity. You can find more Salary Benefits Allowance £000 £000
information on the Society’s 2019 results £000 £000 £000
The average pay award for all colleagues of
that have influenced the recommended 2019 Mike Regnier CEO 583 15 93 280 971
3.0% is higher than the agreed pay award of
bonus outturn on pages 14 to 15.
2.7%. This was achieved by distributing the Alasdair Lenman** CFO 356 43 57 177 633
overall pay budget appropriately between In line with regulation, all bonuses payable
Stephen White COO 429 31 69 186 715
colleagues who are already paid higher or to executive directors designated as ‘Senior
above the market average for their roles, to Managers’ are subject to deferral. This applies
colleagues who were paid a lower salary in to colleagues whose total remuneration
Executive directors’ remuneration - year ended 31 December 2018
relation to the market average. is greater than £500,000, or where their
bonus equates to at least 33% of total Fixed Remuneration
Will executive directors receive a remuneration in a given year. This is known
Executive director Job Title Base Taxable Pension Bonus* Total
bonus for 2019? as the 'de-minimis threshold'. Under these Salary Benefits Allowance £000 £000
circumstances, bonuses will be paid over £000 £000 £000
The Society’s bonus scheme 'Building
Together' applied in 2019, and is anchored a longer period and delivered in part via a Mike Regnier CEO 560 14 90 199 863
to the core business objectives of financial Share Equivalent Instrument (SEI) rather than
Alasdair Lenman** CFO 350 43 56 143 592
performance, customer experience and risk cash. In addition to regulatory requirements,
management. The scheme is the same for all the Society’s Remuneration Policy requires Stephen White COO 418 31 67 149 665
colleagues, ensuring everyone is working all bonuses be deferred for all members of
the senior management team. Bonus deferral *The bonus figures illustrated represent the full amount of bonus awarded in respect of the 2019 performance year. Mike, Alasdair
towards the same business outcomes. In 2019 and Stephen will only receive 20% of this in cash in 2019, with the remainder delivered over seven years. Full details regarding how
executive directors had the opportunity to ensures that the Society delivers variable pay bonuses are paid are available in the full Directors' Remuneration Report at ybs.co.uk/annualreport
earn a bonus up to 50% of base salary. In line in a manner that prevents undue risk taking **In September 2018, Alasdair assumed the responsibilities of the Chief People Officer and was temporarily receiving an additional
whilst achieving the level of sustainable non-pensionable supplement of 10% of his salary for this. This uplift ceased in April 2019 and was in line with supplements for the
with our Remuneration Policy for executive wider colleague group.
directors, a risk overlay process is also carried performance. Full details of this are outlined
in the full Directors’ Remuneration Report The presentation of the executive directors’ remuneration table reflects the full amount executive
out to ensure the Society hasn’t been exposed
directors earned in relation to the 2019 performance year. The figures include deferred elements, which
to unnecessary risk; this forms part of our available at ybs.co.uk/rewardpolicy
will be paid in line with regulatory deferral requirements outlined in the 2019 Annual Report
‘sustainability review’. and Accounts, available at ybs.co.uk/annualreport
Non executive directors do not participate in
For 2019, the executive directors were any bonus scheme.
set stretching objectives in the context How much did our non executive directors’ earn in 2019?
of a challenging trading and economic Were non executive director fees
environment. In determining bonus awards changed in 2019? Non executive director 2018 2018 Total 2019 2019 Total
Basic Fees Committee £000 Basic Fees Committee £000
the Committee carried out a comprehensive Non executive directors’ basic fees were £000 Fees £000 £000 Fees £000
review of individual performance and the increased by 2.2% in July 2019. This took into
John Heaps (Chairman) 191 0 191 197 0 197
Society as a whole. The Society’s Group Risk account external market data, the skills and
and Audit Committees also provided input the time commitment required for the role as Neeta Atkar 50 29 79 52 30 82
in relation to our financial and non-financial well as wider colleague salary increases. Alison Hutchinson 50 15 65 52 22 74
performance, including the member and
customer experience we’ve delivered in 2019. Gordon Ireland 50 17 67 52 18 70
The remuneration of the wider colleague Mark Pain (Vice Chairman) 71 29 100 73 30 103
population was also taken into consideration.
Guy Bainbridge - - - 52 12 65
It is within this context that the Committee
Guy Parsons 50 17 67 52 18 70
believe a good performance has been30 31
Remuneration Policy
Appointing new executive directors
The Remuneration Policy is subject to an advisory vote at the 2020 AGM. Key elements of the policy
are outlined below, with details of the Society’s full Remuneration Policy available in the Annual New hires Bonus buy out
Report and Accounts online at ybs.co.uk/annualreport
When agreeing the components of a remuneration The Committee may make awards on hiring an
Element and Operation Opportunity package for the appointment of executive directors, external candidate to the Board to compensate
purpose the Committee will apply the following principles: them for the forfeiture of any award entered into
with a previous employer. In determining any
Base salary Base pay is typically reviewed annually in line n/a • T he packages will be sufficient to recruit
individuals of the required calibre to lead the such ‘buy out’, the Committee will consider all
Reflects the with the range of increases for all colleagues, and
determined with reference to: business and effectively execute the strategy for the relevant factors including the likelihood of
contribution of
• Role, experience and individual performance members the awards vesting should the candidate have
executive directors in
•
their role as defined • Affordability – the economic environment and remained in their previous employment, the form
The Committee will look to align the in which they were awarded and the time over
by the combination of: overall financial state of the Society remuneration package offered with the Society's
• Skills, knowledge • Comparison to the external market, supported by which they would have vested.
broader remuneration policy and,
•
and experience reference to the Society’s grading structure, our Bonus buy outs will be liable to forfeiture or ‘claw
• Performance Career Framework. The Committee will ensure that the level of pay back’ in the event of early departure and are
• Demonstrating the is necessary but not excessive. executed in line with regulation.
Society’s purpose,
priorities and
behaviour.
Bonus (‘Building • Key measures within the Corporate Plan have to • Executive directors have the Leaver arrangements and loss of office
Together’) be achieved for an ‘on target’ bonus pay-out, and opportunity to earn an on target
Rewards annual considerably exceeded for maximum pay out. bonus of 60% of base salary. Notice period The standard notice period is 12 months from the Society and 12 months from the
performance. Bonus • The profit figures utilised for pay out may be The maximum executive directors executive directors.
is driven by three key adjusted at the discretion of the Remuneration bonus opportunity is 100% of
base salary.
In normal circumstances, executive directors will be required to work their notice
factors: Committee in line with approved principles to ensure
a true and fair view of performance is applied. period. In the event executive directors are not required to fulfil their notice
• Financial performance period, they will receive a payment in lieu of notice, or they may be placed on
currently measured via • Bonuses for executive directors will be subject to the
relevant regulatory disclosures. garden leave.
Profit Before Tax
• Customer Experience • The Committee reserves the right to apply a malus
currently measured via adjustment (reduce bonus partly or fully, for current Termination Typically, termination payments will consist of basic salary and other contractual
the Society’s Net and previous years which have not yet been paid) payment benefits for the notice period, the emphasis being to not reward failure.
Promotor Score and to apply clawback (recover bonus payments
• Individual already made) as applicable.
performance • Bonus pay outs are subject to clawback for up to a Annual bonus Subject to Committee discretion and the Society's risk overlay process, executive
measured via an maximum of ten years. directors who resign from the Society will retain eligibility to any deferred
executive director’s payments earned in previous years.
performance against
their individual
balanced scorecard.
Chairman and non executive directors’ remuneration
Benefits All colleagues including executive directors have Benefits provided to executive
Executive directors access to ‘My Benefits’, a flexible benefits platform directors include car benefits,
enabling colleagues to choose the most appropriate private medical insurance, life cover Operation Opportunity
receive benefits to
ensure their total benefits for them. and insured sick pay.
package is in line with
Chairman fees Normally reviewed and approved by the Fee levels take into account
market practice and Remuneration Committee on an annual basis (the time commitment for the
enable the attraction Chairman does not participate in discussing this role and practice at other
and retention of item, if a member of the Committee). organisations.
executive directors of
the required calibre. Non executive Normally reviewed and approved by the Executive
director fees Committee and the Chairman on an annual basis.
Retirement Executive directors are eligible to participate in the Current executive directors receive
Society’s defined contribution pension scheme. • Non executive directors receive a basic fee.
•
benefits a contribution (or cash allowance)
• Where contributions exceed the annual or lifetime equal to a maximum of 16% of base An additional supplement is paid for serving on
The Society’s pension
arrangements support allowance, executive directors may be permitted to salary. or chairing a Board Committee.
the recruitment and
retention of executive
take a cash supplement instead of contributions to
the plan.
Executive directors appointed
after 1 January 2019 will receive a •
Non executive directors do not participate in
any performance pay or pension arrangement.
directors through the contribution in line with the wider
provision of competitive colleague group equal to a maximum
retirement benefits. of 11% of salary.You can also read
