2016 Interim Results

Yorkshire Building Society has today announced a robust first half performance for 2016, with core operating profit of £62.5m, profit before tax of £99.9m and assets totalling £39.6bn.

Remaining true to its mutual values, the UK’s second-largest building society offered savers better than market average rates and launched mortgages with some of the lowest rates available to UK borrowers, supporting more than 3,000 people to buy their first home. In highly competitive markets its savings balances grew to £29.4bn (31 December 2015: £27.9bn) and mortgage balances grew to £34.0bn (31 December 2015: £33.3bn).

The Society also retained its status as one of the UK’s most trusted financial services providers, consistently ranking in the top three for customer trust1 and achieved its highest ever Net Promoter Score® of +332 compared to the industry average of +83.

2016 interim results key highlights

  • Robust financial performance, maintaining its position as a leading mortgages and savings provider: statutory profit before tax of £99.9m (30 June 2015: £111.2m) and core operating profit of £62.5m (30 June 2015: £115.9m).
  • Further improved liquidity position: securely above regulatory requirements with balances increasing to £4.7bn (31 December 2015: £4.4bn).
  • Mortgage and savings balances growth: mortgage balances of £34.0bn (31 December 2015: £33.3bn) and savings balances of £29.4bn (31 December 2015: £27.9bn).
  • Further strengthened capital position: common equity tier 1 capital of 14.6% (31 December 2015: 14.5%) and maintained a leverage ratio of 5.0% (31 December 2015: 5.0%).
  • Supported borrowers with over 700 mortgage best buys, more than any other lender4.
  • Named Business of the Year at the Third Sector Business Charity Awards.
  • Continued to make a positive impact on communities: raised over £960,000 for Marie Curie5 and made a donation of £740,000 to the Yorkshire Air Ambulance based on the level of deposits in affinity savings accounts.
 

Chris Pilling, Yorkshire Building Society Chief Executive, said:

I'm pleased to report a robust financial performance during what remains a highly competitive and challenging market in line with our financial plans.

We have continued to offer good long-term value to our 3.3m customers at the same time as achieving healthy levels of profit which maintain our financial strength and sustainability.

As a member-owned organisation, providing outstanding customer service is a key priority and I am delighted that we have achieved record Net Promoter Scores® and that our customers consistently rate us as an organisation they can trust.

In the first half of the year, against a backdrop of an unpredictable economic environment and competitive trading conditions, we have remained true to our mutual ethos, focusing on our core mortgages and savings business to help people buy the homes they want and to save for their futures.

With market-leading mortgages we helped more than 3,000 people take the first step on the housing ladder and supported many more to own a home of their choice.

Our savings rates have been on average 1.40% compared to the market average of 1.00%. Continuing to offer long-term value to our savers is a key priority. However, it is important that we also maintain rates that ensure financial sustainability and therefore are not out of line with the market.

Despite the challenges the Society and other financial services providers may face as a result of economic and political uncertainty, we remain in a strong position to continue investing in, and growing our business on behalf of our members.

2016 interim results highlights

Delivered sustainable financial performance and an award-winning customer experience

  • Increased total asset base to £39.6bn (December 2015: £38.2bn).
  • Achieved gross lending of £3.5bn (June 2015: £3.0bn) and gross lending market share of 2.85%6, with net lending of £521m (June 2015: £630m).
  • Achieved a six-month average Net Promoter Score of +327 compared to an industry average of +88, and highest ever Net Promoter Score of +33 in May and June.
  • Provided over 700 best buy mortgage products, more than any other lender9.
  • Continued to help borrowers make their money go further with one in 10 direct mortgages taken on offset products.
  • Delivered value to our members by providing an average savings rate of 1.40% against the industry average of 1.00%10.
  • More than 78,000 accounts opened by savers.
  • Asset quality remains strong, with the value of loans in arrears by more than three months further reduced to 0.77% (December 2015: 0.89%), lower than the industry average.
  • Introduced an online mortgage appointment booking tool allowing customers to book an appointment direct into an adviser’s diary.
  • Diversified our funding base to support mortgage lending by issuing £400m of 10 year senior unsecured notes in April 2016, demonstrating market confidence in the Group.
  • Recognised for our excellent product range and outstanding customer service with a total of thirteen industry awards, including Best First Time Buyer Mortgages11, Best Fixed Rate Mortgage Provider12 and Best Building Society Mortgage Provider13.
 

Made a positive impact on our colleagues and communities

  • Launched our new first-line manager development programme, designed to support our leaders in developing their teams.
  • Contributed more than 8,500 hours of colleague volunteering support to charities, schools and community groups.
  • Raised £967,000 since June 2014 (£144,000 Jan-Jun 2016) for Marie Curie, funding more than 48,000 hours of nursing care14.
  • Donated £157,000 to charities and local good causes through the Charity Choices initiative of the Yorkshire Building Society Charitable Foundation, which is largely funded by members through the Small Change Big Difference® scheme.
  • Won three awards for our community and charity work, including Employee Engagement Initiative of the Year at the Third Sector Business Charity Awards, in addition to our Business of the Year win.

Notes

1 YBS Brand Tracker, conducted by YouGov

2 KPMG Nunwood Customer Voice Programme, +29 (12 month score, January to December 2015, based on interviews with 28,329 customers), +33 (June 2016) average +32 (6 month score, January to June 2015, based on interviews with 15,518 customers)

3 KPMG Nunwood Consulting – KPMG Nunwood Customer Experience Excellence Centre Top 100 UK Brands 2015

4 Presswatch Financial from Kantar Media

5 Since June 2014, start of the Hour of Need campaign (£144,000 2016 YTD)

6 As at 31 May 2016

7 KPMG Nunwood Customer Voice Programme, +29 (12 month score, January to December 2015, based on interviews with 28,329 customers), +32 (6 month score, January to June 2015, based on interviews with 15,518 customers)

8 KPMG Nunwood Consulting – KPMG Nunwood Customer Experience Excellence Centre Top 100 UK Brands 2015

9 Presswatch Financial from Kantar Media

10 Based upon CACI savings market data as at April 2016.

11 Moneywise Awards 2016

12 Moneyfacts Awards 2016

13 Moneyfacts Awards 2016

14 Every £20 raised during the Group’s Hour of Need campaign provides one hour of Marie Curie nursing care

REF: PR35-16