Yorkshire BS planning £160m spending drive

After a string of acquisitions in recent years, the mutual said its focus will now be on growing its own business.

The UK’s second-biggest building society will invest £60m this year under the five-year plan.

It will plough the cash into branch openings, back office systems, staff development, and improving products and services through internet and mobile technology. It could also launch current accounts across the group, expanding into everyday transactions alongside its core of home loans and savings.

The Yorkshire posted core operating profits of £137.2m in 2012, a 16 per cent fall from £163.2m in 2011, as merger costs and one-offs weighed.

“It (the profits fall) does not unduly concern us as it would a major bank,” said chief executive Chris Pilling. “That’s the second-highest core operating profit we’ve ever had.

“Our challenge is to make sure we grow sustainably.”

Statutory pre-tax profits were boosted by a debt buyback, and grew 21 per cent to £157.1m.

New mortgage lending increased 12 per cent to £4.6bn – boosting market share from 2.9 to 3.2 per cent. A record 340,000 savings accounts were opened during the year. Customers increased six per cent to 3.5 million, which the mutual said showed it is a “trusted alternative” to scandal-hit UK banks.

The Yorkshire has snapped up Barnsley, Chelsea and Norwich & Peterborough (N&P) building societies in recent years, also buying the Egg mortgage and savings book in 2011. Its focus will now be on “consolidating”.

At the moment it only offers current accounts through N&P. These grew by 24 per cent during 2012, although it does not quantify how many current accounts it has.

Mr Pilling said the Yorkshire has not yet made the “transformational decision” whether to launch current accounts across the group yet, but it is on the “list to do”.

“If we do want to develop a current account proposition across the group that will require a different level of systems integration,” he said.

The building society opened four new branches in 2012 to take its total to 228, and plans to open another four this year, as well as adding to its 96 agencies.

“We know we do best when we provide the service in towns and cities where banks are pulling out completely or paring back their service,” said Mr Pilling, the former chief executive of internet and phone bank First Direct, owned by HSBC.

He declined to say how many more staff it will recruit under the investment plan. Its workforce grew by 200 to 4,100 during the year.

The Yorkshire is still in “design phase” with its internet and mobile expansion.

“We’ve got some opportunity to take our technology to the whole group,” said Mr Pilling. “We can be more efficient and do things faster, cheaper and better.”

The Yorkshire increased its new commercial property lending by 82 per cent to £60m.

“There’s a need because the numbers are growing, and we have an appetite to fulfill that need but on a prudent and selective basis,” said Mr Pilling.

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