Total assets rose to £3.8bn despite a planned contraction of the balance sheet in 2019 as the savings franchise remained strong with three per cent growth in 2020.
The society saw a reduction in net interest income and net interest margin compression as it held savings rates for branch customers for over six months in the ultra-low interest rate environment. It also saw a fall in fee income driven by very low levels of activity in the first half of the year and its decision to exit estate agency in the summer.
Chief executive officer, David Marlow, said: “2020 was not the year we were expecting, but once we understood the significance of the threat of the virus, we acted quickly on our three key priorities: to ensure the wellbeing of our colleagues; to protect and serve our members; and to support our communities.
“In everything we have done in 2020, we have sought to be true to our mutual ethos. In fact, the challenges of the pandemic have enabled us to demonstrate the real benefits of mutuality to our members. Over the years, we have built up a significant capital surplus and the board was unanimous that we should deploy some of this capital to support our members and communities in a time of crisis.”
The society implemented a task team focused on the health, safety and wellbeing of its members and colleagues, keeping branches open throughout the first lockdown.
More than 3,000 members used the mortgage payment holiday facility during the year. The society also provided funding to The Trussell Trust foodbank network, The SilverLine phone-befriending service, BookTrust and its long-term charity partner Framework.
Lettings and home sales
Its strategic alliance with the Belvoir Group allowed access to discounted home selling and lettings services for members. However, the mutual closed some branches at the end of 2020 ‘as part of the decision regarding estate agency and a review of the branch network,’ but completed five refurbishments of other branches at the end of the year – with more planned.
The society also launched its first savings app and will relaunch its saving brand Beehive money at the end of the year. More than 35,000 members are saving into Lifetime Isas to save for a first home or pension.
The society has less than 50 accounts three months or more in arrears, but expects an increase in arrears over the next year so has recorded an increased impairment charge of £2.9m.
Marlow said: “We believe that the actions we have taken, achieved without taking government subsidy, have been the right thing to do and in the best interests of our members. 2020 was a unique opportunity for us to demonstrate the benefits of being a member of a mutual organisation and we trust that this is appreciated by all our members.”
He added: “We also plan to invest in our mortgage capability to ensure we are a more relevant and efficient lender. With interest rates set to remain low and potentially even go negative, we expect margins to remain compressed, but we nonetheless expect to stabilise our margin in 2021, striking the right balance between historically low lending rates and offering our savers a fair return.”