Leeds Building Society has published its annual results which showed a strong performance in 2020, despite the challenges posed by the pandemic.
The strong results are down to its colleagues’ “mutual values” which ensured robust profits.
Leeds Building Society outlined that their business priorities during 2020 were to safely maintain service for members and intermediaries, preserve financial strength and security, and keep members and colleagues closely informed throughout.
Profit before tax of £80.7m for 2020, which is down from £88m in 2019, however there was an increase of capital and reserves to £1.35bn compared to the £1.3bn recorded in 2019.
Chief executive Richard Fearon (pictured) welcomed the high satisfaction scores and record engagement from members and colleagues of 93% and 86% respectively, which he says is an indicator of confidence in the society and its people.
He said: “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.
“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.”
Having tempered levels of growth and a tightened risk appetite, appropriate provision charges of £14.6m were made to reflect tougher economic conditions ahead.
It also booked a fair value measurement reduction of £16.8m 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.
The UK’s fifth-largest mutual retains a keen focus on efficiency with a cost to income ratio of 51.0% and a cost to mean asset ratio of 0.48% in 2020 compared to 53.5% and 0.50% respectively in 2019.
The society also revealed that it helped 8,000 first-time buyers onto the property ladder in 2020.
The mortgage payment deferral process was supported by the society’s robotic process automation expertise, benefitting members who sought this help in relation to more than 27,500 mortgages.
The society said that most borrowers returned to making monthly repayments at the end of their deferral period, however its arrears ratio rose slightly during 2020 to 0.62% compared to 0.54% 2019.
The business took the decision 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.
2020 saw the launch of Mortgage Hub, the society’s online platform to simplify applications end-to-end, which immediately boosted service levels according to the results.
In April, Dementia UK succeeded Samaritans as the society’s national charity partner after a successful two-year relationship which exceeded initial targets by raising £315,000.
The new partnership got off to a strong start with £150,000 raised by the end of 2020.
Fearon added: “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.
“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.”