Record membership numbers at Leeds Building Society

Leeds Building Society has today announced the retirement of its seventh CEO, as it recorded the highest membership numbers in its 140-year history.

Its total assets increased to £19.5bn for the six months to 30 June, up 13% since June 2017, which it said reflected lending growth and higher liquidity. Membership now stands at more than 809,000 – the highest in its history – up from 778,000 members in June 2017. Net lending in the first half of 2018 dropped to £0.5bn from £1bn in the same period last year, which outgoing chief executive Peter Hill said was expected as the mutual had recorded many years of double-digit growth and they expected this to slow. 

The UK’s fifth largest building society, publishing its half-year report, also announced that Hill will retire in February 2019. Subject to regulatory approval, Hill will handover to Richard Fearon, who is currently the Society’s Chief Commercial Officer.

During the six month period, the mutual issued over 20,000 mortgages, including 5,800 first time buyers, with new residential mortgage lending of £1.8bn, down from £2.1bn to June 2017.  But its pre-tax profits dropped to £60.1m  from £63.2m in June 2017. The mutual said this was due to a one-off charge of £6.9m resulting from a decision to dispose of its Irish mortgages

The listed firm attracted over 42,000 new savers, increasing retail savings balances to £13.9bn from £12.5bn. Speaking to TheBusinessDesk.com this morning, Hill said of the interest rate rise yesterday: “The short to medium term outlook is framed with uncertainty. Our own forecast are perhaps less optimistic than the Bank of England but there is lots of positivity around employments levels.” 

Hill said: “Our strategy to deliver sustainable growth and service improvements is focused on the long term benefits to all our members, whether borrowers or savers. We believe our success in attracting thousands more members is testament to this approach. In a competitive market and uncertain economic climate, they see the value in our products, services and our status as a member-owned business which is here for them for life.

“We were founded to help people save and have the home they want and we focus on understanding the needs of our members, particularly in under-served segments.

“Refining and enhancing our lending criteria and processes complements our product offering to attract more borrowers, which has helped drive growth in line with our strategy.”

Earlier this year. Leeds Building Society announced its move to new head office after outgrowing its current location, its base for more than 80 years. It is readying to move its headquarters from Albion Street in the city to Sovereign Street.

“Growth in our workforce, particularly in recent years, means we have 900 colleagues spread across three sites in Leeds so bringing them together on one bigger site will save money, improve efficiency and offer opportunities to reduce our environmental impact,” said Hill. 

“While branches remain important to us, we know more and more of our members use multiple channels to contact and do business with us, including online, and we’ve made significant investment earlier this year to successfully upgrade our IT platform to support further service improvements across all channels.”

Hill added: “Competition in our core markets has been intensifying and we expect this to continue into next year, placing downward pressure on our net interest margin.

“The implications of the UK’s departure from the EU are still unclear, both for businesses and consumers, while political instability at home and abroad is not helping to calm ongoing economic uncertainty.

“Our strategic approach to investing in sustainable growth means we’re well-placed to withstand economic shocks and carry on looking after our members’ interests so they can share in the benefits of our security and success.”

Chief executive changes  

Peter Hill, who was appointed CEO in August 2011, plans to retire in February 2019, once the FY18 results for the society are announced.

Richard Fearon

Fearon, who is currently the Society’s Chief Commercial Officer, becomes Deputy CEO with immediate effect. Before joining the Society, Fearon spent 10 years with Lloyds Banking Group, where he held a number of senior roles in both the mortgage and savings businesses. He started his career at management consultants Oliver Wyman & Company.

Leeds Building Society Chairman, Robin Ashton, said: “Peter has provided outstanding vision and leadership over the past seven years, during which time the Society’s total assets and profits have more than doubled.

“I would like to thank Peter for his huge contribution to our success and wish him well for the next stage in his life. Richard has been Chief Commercial Officer for two and half years. He was recruited with succession in mind and has proved to be an extremely able Executive Director.

“I know Richard will lead the business and our colleagues to future success, particularly as we continue to develop a Society capable of thriving in the digital age.”

Hill added: “It has been a great privilege to be the custodian of the Society as only the seventh CEO in over 140 years. I’m delighted Richard was chosen by the Board as my successor – he has really demonstrated his value to the Society since joining the Executive team and has the experience and capability to lead the business through the next stage of its development.”