2019 Interim Results

Yorkshire Building Society has made a strong start to 2019 as it helps people to secure a place called home and build financial resilience in a sustainable way.

In a challenging market, the member-owned mutual achieved a pre-tax profit of £76.5m (June 2018: £88.6m) in the six months to 30 June and delivered its core operating profit of £97.5m (June 2018: £86.3m), [1] whilst maintaining steady levels of mortgages and savings growth.

The Society enabled thousands of people to buy their own homes, helping people to buy their first property or move home 8,393 times (June 2018: 7,713) through £4.0bn in gross lending (June 2018: £4.0bn).

The Society helped people build financial resilience and give them a safe home for their money, opening 84,529 new savings accounts and increasing savings balances to £30.3bn (December 2018: £29.6bn).

As part of its commitment to help improve the UK’s financial health, the Society continued to work with employers and communities to deliver financial wellbeing and education. As well as continuing to offer direct-from salary savings schemes to build better financial resilience across Britain’s workforce, Society colleagues also delivered financial education sessions through its Money Minds scheme to 3,310 young people across the country (June 2018: 1,598).

Customer satisfaction remained a key priority for the Society, demonstrated by a 24% increase in its Net Promoter Score to +51 (December 2018: +41).[2] The Society continued to enhance its digital capabilities, improving the navigation on its website, launching a new web chat platform for direct mortgages and savings customers, and simplifying processes to remove paper. It continued to offer savings rates which were typically 0.37% higher than the market average (December 2018: 0.37%).[3]

2019 interim results key highlights:

• Created sustainable profit: Core operating profit of £97.5m (June 2018: £86.3m) and profit before tax of £76.5m (June 2018: £88.6m).
• Improved members’ value for money: Reduced management expenses to £141.6m (June 2018: £158.0m) and decreased cost to income ratio to 59% (June 2018: 64%).[4]
• Maintained financial strength and security: Common Equity Tier 1 ratio at 16.1% (December 2018: 16.3%).[5] Liquid assets of £4.7bn (December 2018: £5.5bn), remaining comfortably above regulatory requirements.
• Helped people to buy homes: Advanced 3,464 mortgages to first time buyers (June 2018: 2,787) and completed 21,981 mortgages (June 2018: 20,058). Increased total mortgage balances to £37.9bn (December 2018: £36.7bn), achieved gross lending of £4.0bn (June 2018: £4.0bn) and net lending of £1.1bn (June 2018: £0.4bn).
• Rewarded savers: Delivered rates which consistently beat the market average by 0.37% [3] (December 2018: 0.37%) and increased savings balances to £30.3bn (December 2018: £29.6bn).
• Supported homeless young people: Raised £113,000 for our charity partner End Youth Homelessness. This takes the total to £660,000 since the campaign’s launch at the beginning of 2017, helping 290 young people move into a home of their own.
• Helped to build financial wellbeing through education: Delivered financial education to 3,310 young people and adults (June 2018: 1,598), with colleagues holding 78 sessions across the UK.

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

2019 interim results summary

Delivered good financial performance and an award-winning customer experience

• Increased mortgage balances through gross lending of £4.0bn (June 2018: £4.0bn) and net lending of £1.1bn (June 2018: £0.4bn).
• Increased savings balances to £30.3bn (December 2018: £29.6bn) and provided an average savings rate of 1.12% against the industry average of 0.75%.[3]
• Increased our total asset base to £43.5bn (December 2018: £43.1bn).
• Maintained strong asset quality, with the value of loans in arrears by more than three months at 0.40% (December 2018: 0.38%) and lower than the industry average.[6]
• Diversified our funding base to support mortgage lending through issuing a successful £275m five-year Senior Non-Preferred note, demonstrating market confidence in the Society.
• Recognised for our excellent product range and outstanding customer and colleague experience, with a total of 12 industry awards including Best Mortgage Lender at the Mortgage Strategy Awards 2019, Best Building Society Savings Provider at Moneynet Personal Finance Awards and First-Time Mortgage Buyers' Choice Award at the Moneyfacts Consumer Money Awards 2019.

 

Made a positive impact on our colleagues and communities

• Won three national awards for inclusivity and diversity, including Diversity Steering Group of The Year, Employee of The Year and Chief Executive of The Year at National Centre for Diversity Grand Awards 2019.
• Raised £113,000 towards our campaign to help End Youth Homelessness, bringing our fundraising total for the charity to date to £660,000.
• Delivered financial education to 3,310 young people and adults, with colleagues holding 78 sessions across the UK.
• Contributed more than 5,645 hours of volunteering, with colleagues sharing their skills with charities, schools and groups in their communities.
• The Yorkshire Building Society Charitable Foundation donated £111,246 to 117 charities nominated by customers and colleagues and largely funded by customers through the Small Change Big Difference® scheme.

 

ENDS W29-19

Notes to Editors

About Yorkshire Building Society

Yorkshire Building Society has assets of £43.5 billion and has more than 3 million customers.

The YBS Group includes Yorkshire Building Society and Chelsea Building Society, and its subsidiary companies including Accord Mortgages Limited. 

For more information on Yorkshire Building Society visit www.ybs.co.uk

For further media information please contact:

Press Office on 0345 1200 890

[1] Core operating profit is calculated by removing one-off items to reflect underlying profitability. The main item behind the difference between the two figures in the first six months of 2019 is a fair value volatility loss of £24.2m, reflecting changes in market rates on some of our assets and liabilities. These have been removed from core operating profit as they are mostly timing differences which will reverse over time as financial instruments approach maturity.

[2] KPMG Nunwood Customer Voice Programme, January to June 2019. Based on 10,412 completed interviews with customers. Net Promoter, Net Promoter Score and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.

[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), covering 87% of the retail savings market (based on stock value). Data period January to April 2019.

[4] Calculated on a core total income basis. The cost to income measure does not include volatility from fair value gains or losses that occur in financial markets and typically reverse in future periods.

[5] This ratio has fallen slightly due to risk weighted assets from additional mortgage lending having a greater relative increase than common equity tier 1 capital, for which the increase from profits has been reduced by the fair value volatility loss of £24.2m.

[6] Council of Mortgage Lenders (CML), retail mortgages more than three months in arrears to March 31, 2019.

* The Cost Income measure does not include volatility from fair value gains / losses that occur in financial markets and typically reverse in future periods.