C M Y K www.leedsbuildingsociety.co.uk LEEDS YELLOW 105 Albion Street, Leeds LS1 5AS Tel: 0113 225 7777 Annual Repor t PMS ??? PMS ??? JOB LOCATION: PRINERGY 3 DISCLAIMER Approver The accuracy and the & Accounts content of this file is the responsibility of the Approver. Please authorise approval only if you wish to proceed to print. Communisis PMS cannot accept liability for errors once the file has been printed. Printer This colour bar is produced manually all end user s must check final separations to verify 2012 colours before LDS00013 (03/13) LDS00043-R+A-COVER.indd 1 22/02/2013 13:24 Financial Highlights Where to find us For the year ended 31 December 2012 Aberdeen Harrogate Street Lane Norwich 68 Carden Place, Aberdeen AB10 1UL 12 Oxford Street, Harrogate HG1 1PU 69 Street Lane, Roundhay, Leeds LS8 1AP 6/7 Guildhall Hill, Norwich NR2 1JG Tel: 01224 642641 Tel: 01423 546510 Tel: 0113 225 8720 Tel: 01603 626978 Banbury Huddersfield Wetherby Nottingham 19 High Street, Banbury OX16 5EE 8 Cherry Tree Centre, Market Street, 2 Horsefair Centre, Wetherby LS22 6FL 23 Listergate, Nottingham NG1 7DE Tel: 01295 277912 Huddersfield HD1 2ET Tel: 01937 585768 Tel: 0115 947 2841 Barkingside Tel: 01484 530842 Yeadon Peterborough 84 High Street, Barkingside IG6 2DJ Hull 59 High Street, Yeadon LS19 7SP 2 Queen Street, Peterborough PE1 1PA £10.3 billion Tel: 020 8550 7678 78 Paragon Street, Hull HU1 3PW Tel: 0113 250 6313 Tel: 01733 896565 Barnsley Tel: 01482 224892 Reading total ASSETS 2 Peel Square, Barnsley S70 1YA Kendal 10 Cross Street, Reading RG1 1SN Tel: 01226 770773 83 Stricklandgate, Kendal LA9 4RA Leicester Tel: 0118 957 5192 Belfast Tel: 01539 724460 13 Halford Street, Leicester LE1 1JA Ripon 19–21 Cornmarket, Belfast BT1 4DB Tel: 0116 251 6748 17 Market Place North, Ripon HG4 1BW Tel: 028 9024 2277 London (Kingsway) Tel: 01765 600300 Birmingham Leeds Area Branches 41 Kingsway, London WC2B 6TP Sale 33–35 Corporation Street, Head Office Tel: 020 7240 2808 26 School Road, Sale, Cheshire M33 7XF Birmingham B2 4LS 105 Albion Street, Leeds LS1 5AS Manchester Tel: 0161 973 0093 Tel: 0121 643 6722 Tel: 0113 225 7555 47 Cross Street, Manchester M2 4JF Sheffield Bradford Adel Tel: 0161 832 0346 14 Pinstone Street, Sheffield S1 2HN Broadway House, Bank Street, Tel: 0114 272 2230 475 Otley Road, Adel, Leeds LS16 7NR million Bradford BD1 1HJ Tel: 0113 225 8500 Southampton £52.4 Tel: 01274 391401 Armley North East Area Branches 41 London Road, Southampton SO15 2AD PRE-tax PROFITS Braintree Tel: 023 8022 6699 45/47 Town Street, Armley, Leeds LS12 1XD Blyth 61 High Street, Braintree CM7 1JX Tel: 0113 225 8510 Stevenage Tel: 01376 553063 18 Church Street, Blyth NE24 1BG Beeston Tel: 01670 354725 52 Queensway, Stevenage SG1 1EE Brecon Tel: 01438 741822 665 Dewsbury Road, Beeston, Chester–le–Street 12a The Bulwark, Brecon, Powys LD3 7AD Leeds LS11 5LF Swansea Tel: 01874 611525 144 Front Street, Chester–le–Street Tel: 0113 225 8520 County Durham DH3 3AY 16 Union Street, Swansea SA1 3EH Bristol Boston Spa Tel: 0191 389 1794 Tel: 01792 472503 Wine Street, Bristol BS1 2HP 181a High Street, Boston Spa, Watford Tel: 0117 922 6772 Durham Wetherby LS23 6AA 9 North Road, Durham DH1 4SH 67 The Parade, High Street, Cardiff Tel: 01937 843190 Tel: 0191 384 0561 Watford WD17 1LJ 5 St John Street, Cardiff CF10 1GJ Chapel Allerton Tel: 01923 240589 Tel: 029 2037 2730 Morpeth billion 3 Stainbeck Corner, Chapel Allerton, 34 Bridge Street, Morpeth NE61 1NL York £7.7 Leeds LS7 3PG Cheltenham Tel: 01670 514083 49 York Road, Acomb, York YO24 4LN MEMBER savings BALANCES 12 Winchcombe Street, Cheltenham Tel: 0113 225 8550 Tel: 01904 335500 Newcastle GL52 2LX Crossgates Tel: 01242 222911 142 Northumberland Street, 57 Station Road, Crossgates, Newcastle NE1 7DQ Derby Leeds LS15 8DT Tel: 0191 232 2801 Overseas Branches 8 St James Street, Derby DE1 1RL Tel: 0113 225 8560 Tel: 01332 344644 North Shields Dublin Garforth 23 West Percy Street, North Shields Ground Floor, 7 Upper Fitzwilliam Street Dewsbury 38 Main Street, Garforth LS25 1AA NE29 0AH Dublin 2 17 Foundry Street, Dewsbury WF13 1QH Tel: 0113 286 3757 Tel: 0191 296 0222 Tel: 00353 16788824 Tel: 01924 469206 Harehills Road Silverlink Gibraltar Doncaster 13 Harehills Road, Leeds LS8 5HR Mercantile House, Kingfisher Way, Silverlink For customers in Gibraltar and Spain 8 Frenchgate, Doncaster DN1 1QQ Tel: 0113 225 8610 Business Park, Wallsend NE28 9NY First Floor, Heritage House, billion Tel: 01302 730485 Headingley Tel: 0191 295 9500 235 Main Street, Gibraltar £1.65 Epsom 18 Arndale Centre, Otley Road, South Shields Tel: (00350) 20050602 NEW MORTGAGE LENDING 13 High Street, Epsom KT19 8DA Headingley, Leeds LS6 2UE 42 Fowler Street, South Shields NE33 1PG Tel: 01372 728695 Tel: 0113 225 8620 Tel: 0191 427 1122 Glasgow Horsforth South Tyneside District Hospital 182 Hope Street, Glasgow G2 2UE 80 Town Street, Horsforth, Leeds LS18 4AP South Shields NE34 0PL Tel: 0141 331 4525 Tel: 0113 258 1668 Tel: 0191 497 5336 Gloucester Moortown Wallsend 43 Northgate Street, Gloucester GL1 2AN 4/5 Harrogate Parade, Moortown, 64/66 High Street West, Wallsend Tel: 01452 520163 Leeds LS17 6PX NE28 8HX Tel: 0113 225 8680 Halifax Tel: 0191 262 4751 31 Commercial Street, Morley Whitley Bay Halifax HX1 1BE 23 Windsor Court, Morley LS27 9BG 104 Park View, Whitley Bay NE26 3QL £614 million Tel: 01422 362359 Tel: 0113 253 7444 Tel: 0191 251 1376 capital AND RESERVES Or call our UK-based call centre, with calls answered personally by a member of staff, from 8am-8pm, seven days a week on 08450 505 065 We may monitor and/or record your telephone conversations with the Society to ensure consistent service levels (including staff training). Or go online – whenever and wherever it suits you! www.leedsbuildingsociety.co.uk LDS00043-R+A-COVER.indd 2 22/02/2013 13:24 Contents Chairman’s Statement 2 Chief Executive’s Review 4 Business Review 8 Risk Management Report 16 Board of Directors 22 Directors’ Report 24 Corporate Governance Report 26 Directors’ Remuneration Report 30 Directors’ Responsibilities 35 Five Year Review 36 Independent Auditor’s Report 37 Income Statements 38 Statements of Comprehensive Income 39 Statements of Financial Position 40 Statements of Changes in Members’ Interest 41 Statements of Cash Flows 42 Notes to the Accounts 43 Annual Business Statement 89 Glossary of Terms 92 Board of Directors Robin A. Smith, TD, LLB, DL David Fisher Kim L. Rebecchi, BA (Hons), FCIB (Chairman) (Sales and Marketing Director) Philip A. Jenks Robert W. Stott Ian Robertson, CA, CCMI Robin S. P. Litten, BA (Hons), ACMA (Vice Chairman) (Finance Director) Karen R. Wint, ACIB Peter A. Hill, ACIB (Operations Director) Leslie M. Platts, BA, FCA (Chief Executive) Abhai Rajguru, BSc (Hons), Robin J. Ashton, BA, ACA Chief Risk Officer FCMA, CGMA Philippa A. Brown & Secretary Andrew J. Greenwood, LLB Annual Report & Accounts 2012 1 LDS00043-R+A-2012-1.indd 1 28/02/2013 13:38 “ ...we have achieved an excellent performance in our core markets, increased capital and reserves, and total assets Chairman’s Statement now exceed 10bn.” For the year ended 31 December 2012 In my final year as Chairman, I am proud to report that Leeds Building Society has made by the Government to ensure that mutuals are able to thrive. delivered another very strong set of financial results. Despite the demanding market The Bank of England introduced the ‘Funding for Lending’ conditions, which have prevailed since the onset of the financial crisis in 2007, scheme to stimulate lending to consumers and businesses, we have achieved an excellent performance in our core markets, increased capital and we were one of the first institutions to sign up. Whilst this initiative supported our mortgage volume aspirations, and reserves, and total assets now exceed £10bn. retail savings remain the core of our funding requirements, and will continue to be so, as we grow the business over the Whilst we do not expect the economic environment to improve This is explained more fully in the Chief Executive’s Review on coming years. significantly over the short to medium term, our resilient page 4. We continue to maintain strong relationships with all of our profitability, strong funding, liquidity, and cost control mean The Society’s vision is “to be Britain’s most successful building key stakeholders, including our members, regulators, the Bank that we are confident the Society will continue to deliver good society”. of England, media and industry trade bodies. The credit ratings results for its current and future members throughout 2013 agencies, Moody’s and Fitch, both continued to assign long Most successful means: and beyond. term ‘A’ ratings to the Society citing our resilient profitability, • Delivering the best value for members, driven by a good interest margin and strong cost control. ECONOMIC BACKGROUND • Achieving the best business and financial results and, Economic conditions remain challenging. In the early part of • Creating the best environment for our colleagues. BOARD COMPOSITION AND CORPORATE 2012, the eurozone was in difficulties and, whilst European GOVERNANCE The members of the Executive team have been challenged to sentiment improved in the second half of the year, the This will be my last Chairman’s statement, as I will retire at the achieve these goals and their rewards are directly linked to the underlying issues are not yet fully resolved. This is undoubtedly Annual General Meeting (AGM) in March. In line with best level of success. impacting confidence and, as Europe is also the UK’s largest practice, recommended by the UK Corporate Governance export market, it is making the rebalancing of the UK economy Code, we maintain a high level of skill and expertise on the harder to achieve.