Leeds Building Society to move head office after delivering 'robust profits'

Reporting its annual results, chief executive Richard Fearon said the society had a delivered on its purpose to help people save and buy the home they want, while achieving a "resilient level of profit" and completing significant stages in its "future-proofing investment programme". In a statement, the mutual said: "Business priorities during the tumultuous year were to safely maintain service for members and intermediaries, preserve financial strength and security, and keep members and colleagues closely informed throughout. "Richard welcomed the positive response from members and colleagues - with high satisfaction scores and record engagement of 93% and 86% respectively (91% and 82% 2019) - as an indicator of confidence in the Society and its people at a unique and testing time." “If proof was needed of how colleagues live our mutual values, this remarkable global emergency has brought out the very best in them and how they serve our members,” he said. “I could not be more grateful for how our people have risen to overcome every challenge so the society was able to deliver a strong performance in a most complex year. “The strength and security of our business was the foundation we could build on to respond to the immediate pressures the pandemic caused, while retaining our longer term view and continuing progress towards our strategic goals.” The mutual achieved profit before tax of £80.7m for 2020, compared with £88.0m the year before, which enabled the business to further increase capital and reserves to £1.35bn, from £1.3bn the year before. The statement added: "The society began the year with very strong liquidity and, in navigating a cautious and steady course through the pandemic, chose to reduce excess liquidity while retaining a secure position well above regulatory requirements. Having tempered levels of growth and tightened risk appetite, appropriate provision charges (£14.6m; £2.8m 2019) were made to reflect tougher economic conditions ahead. "It also booked a fair value measurement reduction of £16.8m (£19.7m 2019) against its legacy equity release portfolio and other mortgage assets, due to continued market rate volatility. The fair value charge, made under International Financial Reporting Standards (IFRS), is an accounting adjustment which will typically unwind in future periods." A robust housing market recovery in the second half of the year, combined with low cost of funds, had a positive impact on Net Interest Margin, the mutual said. "The society stuck to its successful strategy to meet the needs of customers less well-served by the wider market, whether later life borrowers, affordable housing purchasers or first time buyers, 8,000 of whom it helped onto the property ladder in 2020. "Support for the housing market continued, with a sustained presence in Shared Ownership lending during 2020, including at 95% LTV (loan to value). The Society’s strength in this specialist sector earned it the title of Best Shared Ownership Mortgage Lender in 2020’s What Mortgage Awards, for the fifth year running." "Market savings rates continued to deteriorate in 2020, as two Bank of England cuts took Base Rate to a new historic low and external economic factors exacerbated market volatility. Leeds Building Society worked hard all year to keep its variable rates as high as possible for as long as possible and continued to pay above the market average – using the most recent data, this equates to an annual benefit to its savings members of almost £83m." Like many businesses, the society quickly switched to "widespread dispersed working", while ensuring multiple specialist teams could still collaborate effectively, Leeds Building Society said/ "During the pandemic the society waived arrears fees and suspended repossessions, and continues to work closely with members at risk of financial difficulty to agree a solution to best suit their circumstances. Its arrears ratio rose slightly during 2020 to 0.62% (0.54% 2019)." "All Leeds Building Society premises were made COVID-secure and branches remained open as far as possible for members to access essential financial services. The business took the decision thar no colleagues would be furloughed and redeployed resources to meet evolving demands during the year, such as rising call volumes from members concerned about financial difficulties." "The successful launch of Mortgage Hub, an online platform to simplify applications end to end, immediately boosted service levels, which faced repeated pressure as the housing market stalled during the spring lockdown, then rebounded in summer and performed strongly for the rest of 2020. The statement added: "Mortgage Hub is the most visible of ongoing IT systems upgrades, while the society’s other key investment to drive efficiency – and further lessen its environmental impact – is the relocation of its head office in Leeds city centre. "The move to Sovereign Street is on schedule to start shortly, to bring together teams currently spread across three sites, offer more flexible space to support new working patterns, and reduce the society’s environmental impact. “When I reported our interim results last August, I spoke of being both humbled and immensely proud of how colleagues had responded in the early months of the pandemic,” said Mr Fearon. “Leeds Building Society was created by founders who believed they could achieve more by working together and 2020 proved how mutual support and co-operation truly make a difference to all of us. “Our success in a tumultuous year means I’m looking forward with confidence to what we can deliver for our members and colleagues in 2021.”