There are less risks staying in the EU, says Yorkshire Building Society chief

15 August 2015.
Yorkshire Building Society, Huddersfield.15 August 2015.
Yorkshire Building Society, Huddersfield.
15 August 2015. Yorkshire Building Society, Huddersfield.
STAYING in the European Union presents fewer risks to the UK than exiting, according to the chief executive of Yorkshire Building Society.

However, Chris Pilling said that the mutual, which is the UK’s second largest building society, will manage those risks if the British public vote to leave the EU later this year.

Mr Pilling made the comments as Yorkshire Building Society revealed that it had achieved a record core operating profit and improved its capital position last year.

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When asked about the risks associated with Britain’s EU referendum, Mr Pilling said: “We know what risks we face today in the EU, but the potential economic risks of leaving the EU are greater.

“We have extra regulatory costs with being part of the EU, but this is not as significant an issue as the wider concerns about what could happen to the economy if we leave the EU.

“That does worry us, because it will concern our members, who own the society, but we will tread carefully and analyse those risks.”

Earlier this week, Leeds Building Society’s chief executive Peter Hill said that the uncertainty around Britain’s future membership of the EU, combined with global economic instability, represented the biggest threat to Britain’s prosperity.

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Mr Hill, who is also chairman of the Council of Mortgage Lenders, said voters should focus on the long-term view rather than “short-term soundbites”. The EU referendum will be held on June 23. Yesterday, Yorkshire Building Society said that it achieved a strong financial performance in 2015, with a record core operating profit of £185m, compared with £179m the year before.

Profit before tax was £173m, which is down from £188m recorded in 2014. Last year, the society increased its total assets to £38.2bn, from £37.6bn the year before. Mr Pilling said the group had achieved a strong set of results in a challenging and competitive year in the financial services industry.

He added: “Interest rates have remained at historically low levels for mortgages and savings customers and competition within the market has become even more intense.

“As a result, during the year we proactively reduced our lending and funding targets to reflect our commitment to long-term financial sustainability whilst continuing to offer extremely attractive mortgage and savings products.

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“This included launching our lowest ever fixed rate mortgage and helping customers save for their futures with the opening of 166,000 new savings accounts.

“Our significant investment programme, which we launched in 2012, is aimed at further enhancing our systems, products and branch and head office sites and will deliver sustainable benefits for our customers and our people.

“To date, we have refurbished 73 branches, streamlined a series of key processes to make life easier for customers and made improvements to our digital channels giving quicker and simpler access to our services.”

Last month, Yorkshire Building Society announced that it was to rebrand the Chelsea and Barnsley mutuals and close 22 branches as part of an overhaul. Yorkshire Building Society said the closures largely fall where branches are less than a mile apart.

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Mr Pilling said he did not expect the competitive environment to become any less intense this year. But he said the mutual was well placed to face these challenges, and make the most of the opportunities in the year ahead.

Mr Pilling said that the society would focus on its mutual values to maintain the right balance between delivering financial strength and security, providing an excellent service to members and investing in the business.

YORKSHIRE Building Society improved its capital position last year, as its Common Equity Tier 1 capital ratio rose to 14.5 per cent, from 13.8 per cent the year before.

It also completed three public bond issues as part of its wholesale funding strategy.

It helped 6,300 customers take the first step on the property ladder; 37 per cent of house purchase loans last year were to first-time buyers