Achievement, Good News, Good News Featured

Beverley Building Society balances strong profits with member value

We're today announcing a positive set of annual results, which reflect its intention to continue investing in enhancing the personal service our members value so highly.

 

2018 saw the Society continue a positive five-year trend of solid pre-tax profit – enabling us to retain strong reserves for our members’ benefit while returning value directly to our savers and investing in developing the Society so that it can continue to look after members’ financial interests for many years to come.

 

Pre-tax profits exceeded expectations at £473k, enabling us to maintain strong reserves to further protect our savers' financial security.  Significant strategic investments, including our new Beverley Online portal, new branding and a reward for all our savers as we passed on the full benefit of the Bank of England base rate increase, meant that profits were down from last year’s levels (2017: £680k).

 

We walked our members through its positive performance at its recent AGM, which also saw new Chairman Stuart Purdy being officially welcomed on board and the Society’s new branding – with the new strapline ‘Building Better Futures’ revealed.

 

Of this year’s positive financial outcomes, Chief Executive Karl Elliott said: “Being a mutual, for us, is about performing well enough to sustain strong reserves for our members’ peace of mind, while having enough left over to invest in the ongoing development of the business, to maintain the straightforward, good value products and outstanding service they value so highly.

 

“I am pleased to say that we have continued to do just that – while being one of the only financial institutions to reflect the Bank of England’s Base Rate rise across all our accounts in the Autumn."

 

Highlights of our 2018 results:

Supporting our East Yorkshire community
  • Almost 85% of our savers and 60% of borrowers continue to be based in the East Yorkshire region;
  • Members visiting our branch voted to select ‘Charities of the Month’ from across the local region, with 12 winners, as diverse as the PetRespect animal charity and the Daisy Appeal, each receiving £250 during the year;
  • Contributing to local community life, we supported popular local venues and events, including East Riding Theatre, Driffield Agricultural Show, Beverley RUFC and the Beverley Food Festival;
  • We awarded a total of £1,500 to help sustain vital transport service Beverley Community Lift;
  • And, with members’ help, we raised over £1,000 for Yorkshire Air Ambulance through our Tour de Yorkshire cycling challenge;
  • We also contribute to the economic vitality of the East Yorkshire region as a major employer with a commitment to using local suppliers wherever possible.
Strong platform for investment in growth
  • The Society’s assets increased by 3% in 2018, to £191.4m, up from £185.5m in 2017;
  • Our total capital ratio (as a percentage of risk weighted assets (RWA) has increased consistently over the past five years, to 17.1% in 2018 compared to 16.1% in 2017 and 13.0% back in 2014. This is significantly above the minimum capital our regulator requires us to hold, at 9.48% and is an important measure of the Society’s strength;
  • Our liquidity – the cash we use to meet our savings customers’ needs and to lend on mortgages – increased to £40.9m in 2018, from £35.2m in 2017;
  • Our investments in new branding, our online mortgage broker portal and passing on benefits to our savers, resulted in a reduction in our Net Interest Margin to 1.26% from 1.30% in 2017;
  • Increased staff costs were also a factor in this year’s results, our Chief Executive having been in post for a full year during the 2018 financial year. We continue to monitor costs carefully, and to have one of the lowest cost/mean assets ratios in the sector, at 0.98 per cent or 98p in every £100 during 2018;
  • Our policy is not to pay staff bonuses and, as a mutual, we do not pay shareholders’ dividends either, meaning our profit is invested fully back into our reserves for members’ benefit and to improve the Society’s capital – a key measure of our financial strength;
Rewarding our savers
  • Our decision to pass on the full Bank of England Base Rate increase to our members, resulted in inflows of £5.6m into savers’ balances during the year, taking our retail savings and deposits to £178.2m from £172.6m the previous year
  • Our average savings rate increased by 0.30%, to 1.03% from 0.73%;
  • Having repaid our last tranche of subordinated debt during the year, the Society is now entirely funded by savers’ deposits.
Helping homeowners
  • We continued to meet people’s homeownership needs in line with our mutual purpose, by lending £22.2m to borrowers during 2018, up 9%from £20.3m the previous year. Overall lending was up by £0.1m, to £149.4m in 2018, compared to £149.3m the previous year. This positive increase resulted from our personalised approach to underwriting and meeting people’s niche borrowing needs – something we plan to build on in the coming year and beyond with our renewed focus on areas including self-build, self-employed, later-life and inter-family mortgages;
  • As a result of our exceptional service offering, we continued to retain over 80 per cent of mortgages reaching the end of their original offer;
  • In 2018, our mortgage impairment charge increased to £78k from £73k in 2017, primarily as a result of charges made on properties in possession. There were no new properties in possession during 2018, and the Society continues to take all necessary steps to help borrowers experiencing genuine difficulties, while minimising losses to the Society.
Karl added: "'Building Better Futures’ is the strapline featured in our new branding, which we have unveiled this week. It signals our intent to remain true to our mutual purpose by continuing to return value to our members; providing face to face support and a genuine listening ear in an increasingly automated era to help people achieve their financial aspirations, and looking for new ways in which to contribute to the vitality and economic vibrancy of the communities where our members live and work.”

 

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