In association with
DARLINGTON BUILDING SOCIETY
As award-winning Darlington Building Society reports another strong performance, with solid financial results and milestone investment, PETER BARRON talks to chief executive Andrew Craddock…
AFTER four eventful decades in the financial sector, Darlington Building Society chief executive, Andrew Craddock, still feels a deep sense of satisfaction when a plan comes together.
And, despite it being another turbulent year for Britain’s economy, he can look back on 2023 as a milestone year in the Society’s illustrious 168-year history.
It was the year that major investment in online banking, coupled with a continued commitment to the branch network, coincided with another solid financial performance, with an increased profit and a balanced approach to mortgages and savings.
And, to cap it all, the Society was named Building Society of the Year at the prestigious MoneyAge Mortgage Awards at The Waldorf Hilton, in London, at the end of last month.
“It was the way so many threads came together that I’ll remember most about 2023,” says Mr Craddock (pictured below), who has overseen significant growth since taking over as CEO in 2018.
“Over the last five years, we have committed to a strategic investment programme, aimed at improving our services to members and enhancing the working environment for our colleagues, and it was gratifying to see those investments flowing through in 2023.
“It means members can do things they could never do before, including opening accounts online, and it’s great to see that all our service metrics have gone up as a result of the decisions we have taken.
“To be given national recognition as Building Society of the Year at the MoneyAge Mortgage Awards is testament to the hard work of our staff on behalf of members, and I couldn’t be more proud of what they’ve achieved.”
The Society’s annual general meeting takes place in the magnificent setting of Auckland Castle, in Bishop Auckland, on April 29, when members will have the opportunity to cast their votes, as well as hearing about the Society’s continued progress and plans for the year ahead.
The financial highlights include an increase in its core operating profit before tax to £3m – a 35 per cent increase from £2.2m in 2022.
“We could have gone for a higher profit but, as a mutual, we want to take a very balanced approach rather than make as much money as possible,” says Mr Craddock. “We need to make enough profit to be able to invest in the business, but we also want to look after our borrowers and savers, as well as supporting our colleagues and the local community.”
Year-on-year net interest income rose by £3.5m (21 per cent) and could have increased by more, but the Society was committed to paying more than the market average on its savings products range.
Over the course of 2023, the Society paid an average rate on savings products of 3.31 per cent against an average market interest rate of 2.47 per cent. This means that over the course of 2023, members were £6m better off than if they had savings accounts paying the market average rate offered by the largest banks.
Equally, the Society did as much as possible in a challenging environment to protect borrowers. In the face of high interest rates, with high inflation impacting on the cost-of-living and affordability, the Society maintained its mortgage Standard Variable rate below the market average throughout the year.
Total assets have increased by 10.9 per cent to a record £923m, compared to £833m at the end of 2022. That growth cements the Society’s position as the 19th largest building society in the UK, with capital also increasing from £51m to £54m.
That robust foundation has enabled the Society to continue to invest in the key areas of people, IT, and the branch network. Year-on-year costs have increased by £2.8m – 21 per cent year-on-year – but Mr Craddock and members of the board are happy that the investment has paid dividends in terms of member service and staff satisfaction.
Additional roles have been created, and experienced industry professionals recruited, to manage the larger scale and more sophisticated business, while ensuring first-class, personal levels of service for members.
The Society reached an important milestone in 2023 when it launched a new online banking platform, including digital account opening, and a new digital platform for mortgage intermediaries.
And that focus on technological enhancements will continue in 2024, according to Deputy CEO, Chris Hunter, who has overseen the strategic change programme.
“Our technology will go on evolving, including the online account opening processes and digital bond maturities, so that we adapt to members’ needs. However, we also recognise that our point of difference is that we still fundamentally believe in human contact, and that still comes first,” insists Mr Hunter.
That’s why the Society’s investment in the branch network remains a priority, with new branches being opened in enhanced locations in Darlington and Bishop Auckland last year, as well as the roofs being replaced on the Stockton and Northallerton branches.
The new High Row branch in Darlington was opened by Gareth Davies, the exchequer secretary for HM Treasury, alongside veteran market trader, Robin Blair, who has served on his family’s fruit and veg stall at Darlington’s historic covered market for more than 70 years.
A few months earlier, the Bishop Auckland branch was opened by local Paralympian, Lyndon Longhorne, who has become a record-breaking swimmer despite contracting meningitis as a baby and losing his left leg below the knee, right leg above the knee, right hand, and left-hand finger-tips.
“Our branches are about maintaining that personal contact with people, so we wanted to honour important local personalities by asking them to play a part in those opening ceremonies,” explains Mr Craddock.
The Society’s sustained support for the High Street bucks a trend of branch closures by the big banks. A recent report by Which? revealed that 5,791 bank branches have closed since 2015, but Darlington Building Society has maintained its presence in Darlington, Bishop Auckland, Stockton, Middlesbrough, Redcar, Barnard Castle, Yarm, Guisborough, and Northallerton.
“Of course, it’s right that we modernise and invest in the latest technology that gives our members choice. But, whether it’s savings or mortgages, there’s still a human being involved in the process to offer guidance and provide that personal touch,” adds Mr Craddock.
During the cost-of-living crisis, the Society has invested more resources in providing support staff to help members who may be having difficulties in paying their mortgage. It also signed up to the Government’s voluntary Mortgage Charter to provide homeowners with greater flexibility on repayments.
At the same time, robust underwriting safeguards have been kept in place to ensure borrowers can afford their mortgage, rather than get themselves into financial trouble.
Since it was founded in 1856, Darlington Building Society has stayed true to its core values, and it continues to play a significant role in the local communities it serves. In 2017, the Society launched its 5% Pledge – committing to donate at least five per cent of its profit after tax to local and regional good causes.
Since then, more than £818,000 has been donated to local charities and grass roots organisations making a difference to local people and, in 2023, the Society gave out grants totalling more than £158,000 to 42 local organisations.
Savers, borrowers, staff, and local communities, it’s all part of a healthy balance to be found at Darlington Building Society.
AN OUTSTANDING PLACE TO WORK
In 2023, Darlington Building Society participated in the Best Companies Colleague Engagement Survey for the eighth successive year.
A total of 93 per cent of staff completed the survey – the highest rate achieved in the eight years – underlining extremely healthy levels of engagement.
The Society earned a two-star accreditation for the fourth consecutive year, continuing the nationally respected assessment that it is an ‘outstanding’ company to work for.
Indeed, in quarter four of 2023, the latest survey showed the company was the highest ranked building society in the country, as well as the fourth ranked financial services company, and the 41st ranked mid-sized company.
The Society remains committed to the Real Living Wage Foundation, paying all staff above the minimum specified wage. It also continues to benchmark the salaries and benefits package for all roles to ensure they remain competitive and fair.
AND FINALLY...A FOND FAREWELL
THIS year marks the end of Jack Cullen’s tenure as chair of Darlington Building Society after serving almost 10 years as a non-executive director.
Jack, who was appointed chair in 2018, is due to retire from the board in December, and says: “It has been a huge privilege to work with all my colleagues at the Society and to support them as they have navigated some challenging times, and I am pleased to be leaving the Society in such robust health.”
CEO Andrew Craddock paid tribute to Jack saying: “Jack’s passion for Darlington Building Society has shone through, and his guidance has been invaluable. Under his leadership, the Society has progressed beyond expectations, and he leaves us with strong foundations for further growth.”
• To find out more about Darlington Building Society, go to:
darlington.co.uk
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