2017 Interim Results

Yorkshire Building Society has today announced a solid performance during the first half of 2017 as it continues to focus on delivering excellent customer service in its core mortgages and savings businesses.

Despite intensely competitive market conditions, the Society increased core operating profit by 35% to £84.2m (30 June 2016: £62.5m) and reported a healthy profit before tax of £92.3m (30 June 2016: £99.9m). In the first half of the year, the Society offered borrowers some of the lowest mortgage rates in the UK market, helping more than 3,100 first-time buyers become homeowners, and continued to protect savers by offering rates which consistently beat the market average.

The Society continued to strengthen liquidity and capital positions, with liquidity securely above regulatory requirements at £5.0bn (31 December 2016: £4.7bn), total capital ratio increasing to 18.0% (31 December 2016: 17.3%) and leverage ratio rising to 5.3% (31 December 2016: 5.1%).

Continuing to strive for excellence in the service it delivers to customers, the Society achieved a Net Promoter Score® of +42, higher than the previous year[1] and comparing favourably with the industry average of +6.[2] The Yorkshire retained its status as one of the UK’s most trusted financial services providers, consistently ranking in the top three for customer trust[3].
 

 

2017 interim results key highlights:

  • Solid financial performance, maintaining its position as one of the strongest mortgages and savings providers: core operating profit of £84.2m (30 June 2016: £62.5m) and statutory profit before tax of £92.3m (30 June 2016: £99.9m).
  • Further improved liquidity position: securely above regulatory requirements with balances increasing to £5.0bn (31 December 2016: £4.7bn).
  • Strengthened capital position: total capital ratio increased to 18.0% (31 December 2016: 17.3%) and leverage ratio rose to 5.3% (31 December 2016: 5.1%).
  • Supported first-time buyers and homeowners: helped 3,112 first-time buyers get on to the housing ladder.
  • Stable mortgage and savings balances: mortgage balances of £34.0bn (31 December 2016: £34.1bn) and savings balances of £28.9bn (31 December 2016: £29.1bn).
  • Delivered savings rates which beat the market: offered an average rate of 1.03% versus a market average of 0.75% (2016: 1.36% v 0.98%).[4]
  • Continued to make a positive impact on communities: raised more than £130,000 in the first six months of our fundraising campaign to help End Youth Homelessness.

Mike Regnier, Chief Executive of Yorkshire Building Society, said:

In the context of a challenging and highly competitive market, I’m pleased to report Yorkshire Building Society has continued to deliver a healthy and robust financial performance. In line with our plans we’ve taken a disciplined and measured approach, focusing on our core businesses of mortgages and savings.

Our priority is to deliver long-term value for money and excellent customer service. We have strengthened our financial security through improved capital, leverage and liquidity positions and delivered a solid level of profit for a business of our size, which will be retained or reinvested in services. It’s pleasing to see we have once again improved our service to achieve a Net Promoter Score of +42,[5] compared with the market average of +6.[6]

We’re focusing on the financial services which matter the most to our members – buying a home of their own and saving for their futures. Our market-leading mortgages have helped more than 3,100 people to become homeowners for the very first time, and enabled thousands more to buy the home of their choice or remortgage an existing property.

We’re here to deliver value for our members and we’re delighted that we have continued to beat the market by offering savings rates which pay 0.28% [7] more than the average, even in the context of last year’s Bank Rate cut.

The brand and branch network changes announced in January have begun to be implemented through the first half of the year. As a result, we expect to see increased long-term value and cost reductions realised in the medium to long term.

We were proud to announce earlier this year that our members and colleagues chose to support End Youth Homelessness as our charity partner. The aim is to raise £750,000 over the next three years and enable 700 homeless young people to live independently in a safe place they can call home. I am delighted to report that in the first six months of this partnership, we have raised more than £130,000 and the first beneficiaries of the scheme have moved into their own homes. This is a fantastic achievement in such a short space of time and we are all excited about what the future holds for this partnership.

2017 interim results highlights

Delivered solid financial performance and an award-winning customer experience

  • Achieved gross lending of £3.4bn (June 2016: £3.5bn) and gross lending market share of 2.6%[8] and net lending of -£2m (June 2016: £521m), with full-year net lending expected to be positive.
  • Continued to help more people to become homeowners, with 40.5% of all house purchase mortgages to first-time buyers.
  • Helped borrowers to make their money go further by providing more than a quarter of all offset mortgages in the UK market.
  • Delivered value to our members by providing an average savings rate of 1.03% against the industry average of 0.75%.[9]
  • A total of 80,664 accounts opened by savers, with 15,111 mortgages completed.
  • Increased total asset base to £39.8bn (December 2016: £39.6bn).
  • Asset quality remains strong, with the value of loans in arrears by more than three months further reduced to 0.58% (December 2016: 0.68%) and lower than the industry average[10].
  • Diversified our funding base to support mortgage lending by successfully issuing a EUR 500m six-year covered bond in April 2017, demonstrating market confidence in the Society.  
  • Recognised for our excellent product range and outstanding customer service with a total of 12 industry awards, including an international Process Network Excellence Award for improvements to the way we help bereaved customers,[11] Best lender for First-Time Buyers[12] and Best Building Society Mortgage Provider.[13]

 

 

 

Made a positive impact on our colleagues and communities

  • Expanded our recruitment for our apprenticeship scheme, offering a further 24 places in 2017.
  • Recognised as a Best Workplace in the Great Place to Work® national annual assessment of colleague trust and engagement.[14]
  • Contributed more than 8,271 hours of colleague volunteering support to charities, schools and community groups.
  • Raised £130,000 in the first six months of our campaign to help End Youth Homelessness.
  • Donated £72,500 through the Yorkshire Building Society Charitable Foundation to 95 charities and good causes, mostly nominated by customers and colleagues and largely funded by customers through the Small Change Big Difference® scheme.

 

 

[1]  KPMG Nunwood Customer Voice Programme, YBS Group average +42 (6 month score, January to June 2017).

 

[2]  Nunwood Customer Experience Excellence Annual Study average Net Promoter Score of +6 for the UK financial services sector, correct as at September 2016.

 

[3]  YBS Brand Tracker, conducted by YouGov.

 

[4]  Based upon CACI savings market data as at April 2017.

 

[5]  KPMG Nunwood Customer Voice Programme, YBS Group average +42 (6 month score, January to June 2017).

 

[6]  Nunwood Customer Experience Excellence Annual Study average Net Promoter Score of +6 for the UK financial services sector, correct as at September 2016.

 

[7]  Based upon CACI savings market data as at April 2017.

 

[8]  Based upon CACI mortgage market data as at April 2017.

 

[9]  Based upon CACI savings market data as at April 2017.

 

[10] Council of Mortgage Lenders (CML), retail mortgages more than three months in arrears to March 31, 2017.

 

[11] Winner of Best Process Improvement Project Under 90 Days in the Process Network Excellence Awards 2017.

 

[12] Winner of Best Lender for First-Time Buyers in the Moneywise Mortgage Awards 2017.

 

[13] Winner of Best Building Society Mortgage Provider in the 2017 Moneyfacts Awards.

 

[14] Yorkshire Building Society was ranked 28th best Large Workplace www.greatplacetowork.co.uk/best-workplaces