Established 1849

Includes summary financial statement for year ended 30 November 2018

growing closer One of the most significant events of the year was the introduction of the General Data Protection Regulation, a complex project which we worked efficiently and diligently to comply with. Membership and branches Chairman’s summary 4 As a mutual we place great importance on the 170 Years of “The Old Freehold” 5 satisfaction and support of our members and work All In 6 to meet their needs. Community matters 8 The demand for our face-to-face services saw us Savings & Mortgages 10 open new premises at a time when other financial Introducing our Board 12 service providers have closed branches. We are Summary Financial Statement 14 facing increasing demand for complementary Directors’ Remuneration Report 18 online services and are making good progress with this project which will remain a focus in the coming year. Supporting home ownership Looking back By employing an expert, manual approach to underwriting we understand the personal at 2018 circumstances behind each mortgage A welcome from Richard Norrington, application enabling us to be innovative with Chief Executive our mortgage lending. We introduced new products specifically designed With a backdrop of continuing economic for borrowers aged 50 plus, offering no maximum uncertainty, we began our financial year positively age restriction at the end of the mortgage deal. with a commitment to our face-to-face services, Borrowing in later life brings with it a set of unique opening two new premises in the existing branch needs as well as changing sources of income towns of and Woodbridge. and lifestyle which our underwriters take The economic outlook into consideration. We witnessed another increase in the of We identified and addressed a gap in our range England’s Base Rate - the second successive for 75% Loan To Value products and responded annual upturn. There is, inevitably, much to demand for a limited tranche of five year speculation about how the Base Rate may be fixed deals. affected by Brexit and this is something we will be closely monitoring. We improved our offering for those either building, or remortgaging, a property using The Autumn Budget was positive news for would- Modern Methods of Construction and can now be first time buyers, with initiatives including the also help shared ownership homeowners looking abolition of stamp duty for shared ownership to remortgage. properties up to £500,000 backdated to November 2017.

2 Fit for the future Along with the Board I am mindful of the need Key results to ensure we have the appropriate senior staff in place to lead the Society through the coming Mortgage years. We have made two internal promotions, assets welcoming Rebecca Newman to our Executive team as General Manager Legal and HR (formerly £536m Society Secretary and Legal Counsel) and Ian (2017: £521m) Brighton to our Board as Operations Director (formerly General Manager Operations). In addition, as highlighted in our 2017 Review, Trevor Retail savings Slater joined the Society as Finance Director in balances January 2018. £572m It is also prudent to ensure our Board has the skills (2017: £567m) needed to ensure the long-running sustainability of the Society. I am delighted to welcome Fiona Profit before tax Ryder as Non-Executive Director, bringing over 25 years’ experience across the broadcasting, digital £3.3m and commercial sectors. (2017: £3.1m) We implemented a new tool to measure employee satisfaction and engagement, enabling us to Management monitor initiatives and invite suggestions on how expenses to improve as an employer. We consecutively increased our quarterly engagement score and £9.3m implemented several suggestions. (2017: £8.9m) We pledged our support for the Women In Finance charter, to achieve a greater level of Total regulatory gender diversity. capital £37m As we now enter our 170th year it gives me great (2017: £34m) satisfaction to report that the Society is in a strong position, well placed to continue our success into 2019.

Richard Norrington Chief Executive

3 Chairman’s summary The Society remains committed to providing Underpinning our Board oversight is our Enterprise long term sustainable value to members through Risk Management Framework (ERMF), core to our competitively priced products. decision-making and incorporating the control structures and mechanisms to safeguard against Our business model remains very straightforward threats, especially from fraud and cyber attack. and we performed strongly by continuing to attract This is, quite rightly, a crucial area of focus for and retain personal savings, and then using these our regulators. funds to lend responsibly to mortgage borrowers. Support from key mortgage intermediaries, The economic and political uncertainty associated particularly those on our Prestige Panel, were with Brexit continues and the UK political again at the heart of our success. landscape is changing. Whilst the Society’s business model means it is largely protected from We made several strategic investments including any direct adverse implications of Brexit, it could the opening of new premises, the testing of new be impacted by the wider economic changes. shared services, including Estate Agencies, and Although the Society’s simple operating model upgrading key components of our IT infrastructure. and high-quality loan book improves its resilience, We are committed to retaining a branch network these risks are nevertheless at the front of our but will ensure that it is one which is fit for purpose thoughts and additional business controls and in a rapidly changing market place where the monitoring are being put in place. introduction of Open Banking, and the rise of the In concluding this report I thank the Society’s FinTech’s, will lead to further changes. We are employees for their valued personal contributions. therefore investing in both technology and people Last year was difficult and demanding with many to ensure that we look after members’ interests and changes affecting the Society. With this level of maintain high standards of service. commitment, I am confident that although 2019 High quality member service is at the heart of our will be just as demanding we are well placed to business model. Our staff have again worked to continue to build the business for the future. the highest standards, consistently demonstrated in our satisfaction results and supported by a low level of complaints. Our Board structure, oversight controls and Alan Harris information are central to governance. A Board Chairman Effectiveness Review was conducted externally and highlighted the strength of our current governance but also gave ideas to further improve and modernise what we do.

4 170 years of “The Old Freehold” We were established in 1849 as the Ipswich Between 1866 and 1933 the Society built and Suffolk Freehold Land Society and the houses, developing over 50 estates in Ipswich and Ipswich & Suffolk Permanent Benefit Building across Suffolk including Felixstowe, Stowmarket, Society. In 2019 we celebrate 170 years of Lowestoft, Framlingham and Hadleigh. service as Suffolk’s only homegrown financial services provider.

The Ipswich & Suffolk Freehold Land Society (FLS) was part of a national movement to create ‘forty shilling freeholders’, giving the ordinary man the chance to buy enough land to gain the right to vote. The Society aimed to “improve the social position and promote the moral elevation of the unenfranchised population of this country”. People Ipswich branch counter, 1940s would be able to invest their savings with that money used to purchase areas of freehold land. This land During this time the Society operated from a single would be divided into plots of sufficient size to confer Ipswich town centre office. In 1979, to better serve on its owner the right to vote. our members, we opened our first satellite branch in Hadleigh. Further branches soon followed. At the first meeting on 4 December 1849 the Society enrolled 140 members with 150 shares taken. Within In 2016 the Society purchased the Grade II a week this had increased to 400 shares. listed ‘Parr’s Bank’ building in Ipswich, which was to be the new flagship premises. After a much In 1850, the Society acquired its first piece of land acclaimed refurbishment the building opened (98 acres). By 1858 the first come, first served as ‘Mutual House’, reflecting the long-standing model of allocating plots to members was replaced values of “the old Freehold”. by balloting. Members interested in a particular development would submit their ballot paper to the Our archive materials are on permanent loan Secretary; should their numbered ball be drawn out to Suffolk Records Office, where they can be they could proceed to purchase outright or through accessed for family and house history research. an Ipswich & Suffolk Permanent Benefit Building Visit www.suffolkarchives.co.uk to find out more Society mortgage.

Ballot box from 1858

5 Better for everyone

Being a member is more than being a customer; you’re part of something special. This is why we created All In.

Rather than aiming to please shareholders, as a Discover hidden treasures mutual business we’re here to serve your interests and Our events programme is primarily an opportunity to those of the community. All In strengthens the bond reward members with social activities, but our events between members and the Society, ensuring our also bring valuable footfall, funding and awareness members feel like owners of the business. We want of Suffolk organisations and attractions. It’s so easy to our members to get involved with us, to discover hidden overlook what is on our doorstep. treasures on special events and to benefit from offers with partner organisations. Enjoy partnership benefits All In occasionally includes discounts at a few local and Get involved nationally available businesses and organisations. These Have your say by voting online, by post or in person at are refreshed throughout the year, so don’t miss out. our AGM. We’re keen to hear your views on anything about the Society and All In is the perfect way to get to To keep up-to-date with events, discounts and other All know you better. In activities, visit your local branch or our website, or sign up to receive our monthly email, Freehold Post.

Your invite to our AGM and lead member event An Audience with Tracey After our AGM Tracey will take to the stage to entertain you with her MacLeod, following our Annual childhood memories of growing up in Ipswich, her continued love of General Meeting Suffolk and her successful career as a journalist, broadcaster and writer. We expect the evening to finish around 8.30pm. Wednesday 27 March at Trinity Park, Felixstowe Road, Please register your place(s) by contacting your local branch, emailing Ipswich IP3 8UH us at [email protected] or register via our website www.ibs.co.uk/ members-lounge. Members may register to bring one guest; guest Refreshments from 5.45pm. places may be subject to a ballot, depending on numbers. AGM starts at 6.30pm Tracey MacLeod is a versatile and experienced broadcaster and writer. For many years she was the presenter of the BBC’s flagship arts show, The Late Show, where she specialised in music subjects and has also hosted her own shows on radio stations including BBC 6 Music, LBC, GLR and BBC Radio 2. As a restaurant critic for The Independent she has won numerous awards and she is a regular guest judge on the hit BBC series MasterChef.

6 In 2018 our unique calendar of member events saw 946 places being filled, with 443 members enjoying experiences such as:

Orfordness lighthouse Wilkins Tiptree jam factory

“I realise that many like us felt very fortunate to have secured a place on this trip. Again thank you. Afterwards we discussed the ethos of the and what we liked about it; good old traditional values where the customer counts and feels welcomed and appreciated, not just a number or an invisible face that passes over their account book. It’s good to see in this day and age that a company cares whilst still keeping up to date and still being able to compete with the nationals.” D. G. & A. A. Sutton Hoo

Orwell Lady sunset champagne river AGM 2018 cruise to celebrate Suffolk Day

In addition hundreds of members attended our AGM, the biggest member event of the year. Find your Members’ Lounge online at www.ibs.co.uk/members-lounge

7 Community matters We’re proud to be Suffolk through and through, and we strongly believe that organisations should support and nurture their local communities for the good of their customers, employees and their families. Here’s a snapshot of how some of our staff have contributed in the past year. Shelley Curtis, Customer Experience Manager “I helped Inspire Suffolk by delivering a Money Management session to a group of students as part of their Summer Education Programme at Framlingham College. The students really engaged with the session, quite a surprise considering the hot weather and how close we were to the summer holidays, plus the promise of their pool party later in the day!”

Richard Norrington, CEO “I’m a firm believer in the Society’s community schemes, so it is only right that I get stuck in too! Our Senior Management Team joined me in the ActivLives ‘ActivGarden’. We kept busy doing groundwork, tree planting and general maintenance and it was fantastic to support some of the vital work ActivLives do in our community.”

Tom Jell, Customer Experience Manager “Mutual House branch chose to support Ipswich Housing Action Group (IHAG) as our Mutual Advantage charity. I have been so moved by what IHAG do to help the homeless that I joined the Board of Trustees. In 2018 we donated £1,830 to IHAG and welcomed them into the branch to speak with our members about homelessness.”

The Ipswich Building Society Charitable Foundation In 2005, the Society formed a Charitable Foundation to support local charities. Responsibility for grant making was subsequently transferred to Suffolk Community Foundation’s Suffolk Giving Fund in 2010. The Society makes an annual payment into the Fund; this year being £5,000, plus we are building up an Endowment Fund which is heading towards the £20,000 mark. With continued growth this will ensure stability of our grant-making into the future. The Society has become a long standing and very loyal partner of Suffolk Community Foundation, supporting education projects like Shine A Light, sponsoring the High Sheriff’s Awards each year and playing a key role across all branches in their Surviving Winter appeal. Above and beyond the regular financial support, the Society also contributes by offering ‘help in kind’, directly reaching out to smaller, grassroots charities and community organisations.

8 donated to charities through match funding employees’ own personal fundraisings volunteer hours donated

nd place raised through our philanthropic savings accounts Mutual awarded to our Hadleigh Show Advantage, which supports charities in each of our branch towns, stand, themed “quintessentially and We-Care (closed issue) supporting St Elizabeth Hospice, British” with the judges Suffolk Wildlife Trust and the East Anglian Air Ambulance. appreciating our free fun and games provided for children

hours steps, or 12 miles, walked by Mutual House, Ipswich and in the classroom delivering Woodbridge branch teams between the two premises to raise financial education in schools, money for Families in Need (FIND) colleges and prisons

pledges helping hand boxes created, one in each branch, to help made as part of our sign up to members access our services more easily including items the Women in Finance charter, such as magnification and visual aids, pen grips, large print committing to help improve gender documents and portable induction loops. diversity

employees events took advantage of our volunteer scheme, which enables them four hosted to mark Suffolk Day, hours per month to help a charity or community organisation held annually on the summer solstice (21 June)

Runners-up at the Hadleigh Show Latymer Trust sponsorship 9 Savings that Five minutes are up your with a Mortgage street Consultant We firmly believe in the value of face-to-face We’ve helped all types of people with service and a presence on the local high all types of mortgages, available either streets of Suffolk. through intermediaries or directly with one We know it can be hard to know who to trust with your of our Mortgage Consultants – such as money, which is why we offer simplicity and great Melanie Mihill. service and were delighted to open two new and “I’m here to help people at any stage of their journey, improved branches in Ipswich and Woodbridge town whether it’s their first mortgage or their last. I’m able to centres, to help improve the experience of our members give people a helping hand when buying a new home and the services that we offer. Our larger, flexible or remortgaging. premises mean we can host events and welcome even more people to join us. Over the last year I’ve spoken to first time buyers looking to get onto the property ladder with a shared ownership There was good news for savers during the year, with mortgage or a gifted deposit, buy to let borrowers the Bank of England increasing their Base Rate. During seeking to finance a small property portfolio and later 2018 we maintained options including children’s life borrowers who need to factor in changing sources accounts, ISAs, instant access and bonds through to of income and lifestyle. charity support accounts and regular savers. I’ve also helped people who are constructing their dream home with a self build mortgage, an increasingly popular option for borrowers starting new projects, conversions, renovations or knock down and rebuilds. The most enjoyable part of my day is helping people with one of their biggest financial decisions, either over the telephone or face-to-face in one of our branches.”

Melanie Mihill, Mortgage Consultant

10 How we helped linked pension coming in every month, so I thought I retiree Richard to was a pretty good bet. It’s difficult for people of my get the mortgage age to get a mortgage. But people are living longer, he wanted so what are we supposed to do?” Richard Lincoln is in his Having exhausted his other options, he turned to mid-60s and decided the internet and soon came across Ipswich Building to make a move across Society. “The Ipswich were excellent. They kept the Midlands, closer to me informed at all times, and Melanie Mihill, who his partner but in a place of his own. “I’ve always handled my application, was brilliant. I explained owned a property, and I value my independence,” what I wanted, then she took me through various he says. “And since I get a pension from the scenarios. They offered to lend me funds for 15 National Grid, I can afford a mortgage.” years and were the only people who would offer me a loan that was anything like what I needed.” However, when he began looking for the right mortgage, Richard soon found that his age counted Now happily settled in his new apartment, Richard against him. “I tried a few lenders who claimed is certainly pleased that he found us. “I’d give them that they cater for the more mature customer, but I nine out of ten!” he says. “They did everything that couldn’t get the offer I was looking for,” he recalls. “I they could and I’m thankful there was somebody out had cash to put down and a fairly substantial, index- there who would help.”

We help people who are buying a property, remortgaging or building their dream home Our mortgage consultants are fully trained to give advice, either over the telephone or in one of our nine branches throughout Suffolk. All applications are assessed by our expert underwriters based in Ipswich. Rather than relying on computer based scoring, by employing a manual approach we’re able to look at all applications individually and take personal circumstances into account.

• Residential • Shared ownership • First time buyers • Gifted deposit • Buy to let • Later life • Large loan • Expat • Self build • Self employed and contractors

Applicants must be aged 18 or over. Subject to status and valuation. Fees apply. We only offer a fully advised sales process on our own mortgages and there are no fees for our advice. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP THE REPAYMENTS ON YOUR MORTGAGE.

11 Introducing the Board of Directors Our Board’s focus is to ensure the long term sustainability an understanding of the risks in business, commercial for the benefit of our members. They formulate the leadership within a framework of prudent and effective strategy, review business performance, oversee the risk management controls and the ability to monitor identification and management of risks, adhere to laws performance and resources whilst providing support to and regulations and ensure that the required controls the Executive in developing the Society. are in place and are aligned to our strategy. The The Society is committed to diversity and currently has a results achieved by the Society over recent years are a 30% (2017: 25%) female representation on the whole testament to the Board’s effectiveness. Board and is therefore aligned with the recommendations The Non-Executive Directors are drawn from a wide of the Davies Report which, for diversity purposes, has set range of backgrounds to ensure that the Board has the a minimum target of 25% female representation. In 2018 appropriate skills, knowledge and experience to provide the Society signed up to the Woman in Finance Charter a robust level of challenge and debate. The role requires to signify its commitment to diversity.

Alan Harris MBA, FCII, Chairman As at November 2018 • Appointed to the Board in 2011 and appointed as Chairman Board Committees: Board December 2017 Risk and Compliance, • Chartered Insurer and a Fellow of the Chartered Institute Audit , Remuneration • Former Operations Director of NFU Mutual and ex Chief Executive and Chairman’s and of Avon Insurance Plc Nominations (Chairman). • Non-Executive Chairman of two Aegon companies, and Governor and Director of Prince Henry’s High School Academy Trust.

Valerie Dias FCCA, CCMI, Deputy Chairman • Appointed to the Board in March 2015 and appointed Deputy Board Committees: Board Chairman December 2017 Risk and Compliance, Audit • Fellow of the Chartered Institute of Certified Accountants (Chairman), Chairman’s • Former Chief Risk & Compliance Officer at Visa Europe and Nominations. • Non-Executive Director roles held at Hastings Insurance Services Limited and Aston Lark, Insurance Brokers; and Trustee at the Boards of the Chartered Management Institute (CMI) and of UFI (University for Industry).

Richard Norrington MA (Hons), Chief Executive Officer • Appointed to the Board in November 2016 Board Committees: • Former Regional Director at Clydesdale & Yorkshire Bank for the East Chairman’s and of England Nominations. • Extensive leadership experience in the financial services sector.

Ian Brighton CeMAP, CeRGI, CeRCC, CeRCH, AdvCeMAP, Operations Director • Appointed to the Board in May 2018 • Joined the Society in 1995 and appointed member of the Executive team since 2006 • Trustee of the Ipswich Building Society Charitable Foundation and the Ipswich Building Society Pension and Life Assurance Scheme.

12 Peter Elcock ACIB, DipFS, MBA, Non-Executive Director • Appointed to the Board in June 2015 Board Committees: Board • Executive Director and Chief Risk Officer at Charter Court Financial Risk and Compliance, Services Group plc (CCFS) Audit and Remuneration • Board member of all CCFS group companies. (Chairman).

Steve Liddell BSc, FCA, Non-Executive Director • Appointed to the Board in November 2017 Board Committees: Board • Partner at Mazars LLP Risk and Compliance, Audit • Fellow of the Institute of Chartered Accountants in England and Wales. and Remuneration.

Steve Reid MA, Non-Executive Director As at November 2018 • Appointed to the Board in November 2016. Board Committees: Board • Former Executive roles at the Woolwich Building Society, Barclays Risk and Compliance Bank PLC, latterly as CEO of Allied Irish Bank (UK). (Chairman) and • Non-Executive Director at Wyelands Bank. Remuneration.

Fiona Ryder FRSA, Non-Executive Director • Appointed to the Board in October 2018 Board Committees: Board • Executive Director at TCD Media Ltd and President of the Norfolk Risk and Compliance. Chamber of Commerce and Industry • Fellow of the Royal Society of Arts and Honorary Treasurer of Royal Television Society (East).

Trevor Slater ACMA, ACIB, Finance Director • Appointed to the Board in June 2018 (contracted from January 2018) • Chartered banker and chartered management accountant • Former senior roles in finance and risk at Yorkshire Bank and Clydesdale Bank.

Michelle Tennens FCIM, DipM, DipTh, Non-Executive Director (Senior Independent Director) • Appointed to the Board November 2006 Board Committees: Board • Senior Independent Director focusing on achieving a fair deal and Risk and Compliance, positive outcomes for our members Chairman’s and • Founding Director of redPepper Marketing Ltd and Director at Nominations. Tillwicks Close Management Ltd • Fellow of the Chartered Institute of Marketing.

At the 2019 Annual General Meeting Michelle Tennens will have held office for over nine years and will retire from the Board.

13 Summary Financial Statement Year Ended 30 November 2018

This financial statement is a summary of the different types of lending that the Society has to offer information in the audited Annual Accounts, has become more varied. Amongst the type of products the Directors’ Report and Annual Business that the Society offers are Self-Build, Shared Ownership, Expat and Later Life mortgages. Statement, all of which will be available to members and depositors free of charge on Looking ahead demand at every office of Ipswich Building The Directors are committed to ensuring the long-term Society from 20 February 2019. sustainability of the Society and has in place a three- year corporate plan which is dedicated to maintaining the Society as an independent mutual society. Over the next two years an enhanced savings proposition will be The Summary Financial developed which will include a digital offering for our Statement was approved members as well as the ability to offer improved services by the Board of Directors for face-to-face interactions with members. on the 8 February 2019. Mortgage assets The Society has increased mortgage lending by £15m. Whilst this is lower than the prior year, this reflects the Alan Harris Chairman management decision to optimise the use of regulatory Richard Norrington Chief Executive capital, with the lower level of growth and the high Trevor Slater Finance Director retention of profit enabling the potential early repayment Summary Directors’ Report of subordinated debt (subject to regulatory approval) towards the end of 2019. Offering simple and straightforward savings products to investing members and providing mortgages so that Arrears borrowing members can buy a home has been the There has been an increase in arrears cases over 12 Society’s main purpose for 169 years and continues months compared to the previous financial year and to be so. this is being monitored carefully. However, credit quality Business review indicators remain within plan. The Directors are pleased to end the year with a At 30 November 2018 there were 9 (2017: 5) mortgage profit before tax of £3.3m [£3.1m: 2017]. In addition, accounts where the arrears were the equivalent of 12 the size of the Society’s mortgage assets have increased months payments or more. The total amount of principal by £15m. outstanding in these cases was £830k (2017: £572k). The uncertainty around Brexit and other economic Retail savings balance factors has meant that the mortgage market has The Society is pleased to note that retail savings remained very competitive during the year and is balances have increased by £5m in the last year (2017: likely to do so into 2019. This year the Society has £26m). Whilst this increase is less than the previous refocused efforts on its strategic aim to offer carefully year’s increase this was a planned decision by the Board crafted products that are intended to meet the needs of to carefully balance savings inflow, and manage the customers who may otherwise find it difficult to obtain level of surplus funds on deposit with the Bank a mortgage from larger organisations. This means the of England.

14 Profit for the financial year The Society achieved a healthy profit before tax of £3.3m. This is an increase compared with last year’s £3.1m. Management expenses In 2018 there was an increase in management expenses, however these fell within the Society’s planned level. Costs have been very closely tracked throughout the year. Capital The Society’s total regulatory capital is £37m, an increase of £3m on the prior year. Community, economy and environment The Society continued its employee volunteering programme which allows all employees four hours per month to volunteer. In addition, our employees raised money for local charities through fundraising in branches or personal sponsorship. The Society offers matched funding for personal sponsorship of local charities and also supports charities through partnership affinity savings accounts. In 2018 the Society commissioned an environmental review from an external company. The purpose of the review was to enable the Society to prepare an environmental strategy. Each site (Head Office and branches) had a carbon footprint calculation carried out, which considered buildings, employee behaviour etc. The results of the review will be used by the Society to put in place an Environment Action Plan and Environmental Policy. Customer satisfaction Member satisfaction levels and Net Promoter Score remain extremely high at 98.6% (2017: 98.2%) and 83 (2017: 84) respectively. Net Promoter Score is a score showing how likely members are to recommend us to others. These results are based on 2,317 completed surveys for the financial year across a spectrum of activities including account opening and closing.

15 Summary Financial Statement Year Ended 30 November 2018 2018 2017 £000 £000 Results for the year Net interest receivable 12,663 12,486 Other income and charges (249) (423) Net income from financial instruments at fair value (127) 86 Administrative expenses (9,267) (8,850) Provision for impairment losses on loans and advances 206 (136) Release/(charge) for customer redress 59 (40) Profit for the year before taxation 3,285 3,123 Taxation (645) (708) Profit for the financial year 2,640 2,415

Other comprehensive income Actuarial gain/(loss) recognised in the pension scheme 183 (869) Movement in related deferred tax (31) 148 Movement in fair value of debt securities (21) 15 Movement in related deferred tax 4 (3) Revaluation gain on freehold property 1,322 - Movement in related deferred tax (225) - Total comprehensive income for the year 3,872 1,706

Financial position at end of year Assets Liquid assets 114,791 120,150 Derivative financial instruments 578 531 Mortgages 536,183 520,606 Fixed and other assets 6,333 5,009 Total assets 657,885 646,296

Liabilities and reserves Shares 520,426 511,6 55 Borrowings 96,294 95,192 Derivative financial liabilities 57 1 Other liabilities 1,718 1,514 Net pension liability 431 2,888 Subordinated liabilities 4,561 4,520 Reserves 34,398 30,526 Total liabilities and reserves 657,885 646,296

Summary of key financial ratios % % Gross capital as a percentage of shares and borrowings 6.18 5.68 Liquid assets as a percentage of shares and borrowings 18.61 19.80 Profit for the year as a percentage of mean total assets 0.41 0.33 Management expenses as a percentage of mean total assets 1.42 1.44 16 Notes to the Summary Financial Statement Statement and Directors’ Report and its conformity with the relevant For the year ended 30 November 2018 requirements of section 76 of the Building Societies Act 1986 and regulations made under it. 1. The gross capital ratio measures the proportion that the Society’s capital bears to the Society’s shares and borrowings. Basis for opinion Capital consists of the Society’s general reserves which are Our examination of the summary financial statement consisted the profits of the Society accumulated over the last 169 years, primarily of: together with an amount of capital raised in the form of allowable subordinated debt. Society capital provides a financial buffer. • Agreeing the amounts and disclosures included in the summary financial statement to the corresponding items within the full 2. The liquid assets ratio measures the proportion that the annual accounts, Annual Business Statement and Directors’ Society’s assets held in the form of cash, short term deposits Report of the Society for the year ended 30 November and Government securities bears to the Society’s shares and 2018, including consideration of whether, in our opinion, borrowings. As liquid assets are by their nature readily realisable, the information in the summary financial statement has been this assists the Society in its cash management and enables the summarised in a manner which is not consistent with the full Society to meet requests by investors for withdrawals from their annual accounts, the Annual Business Statement and Directors’ accounts, to make new mortgage loans to borrowers and to fund Report of the Society for that year; its general business activities. • Checking that the format and content of the summary financial 3. The ratio of profit for the year as a percentage of mean total statement is consistent with the requirements of section 76 of assets measures the proportion that the profit after taxation for the the Building Societies Act 1986 and regulations made under year bears to the average balance of the total assets during the it; and year. A reasonable level of profit must be generated each year by the Society to maintain its capital ratios, thereby protecting • Considering whether, in our opinion, information has been investors’ funds. omitted which although not required to be included under the relevant requirements of section 76 of the Building Societies Act 4. The ratio of management expenses as a percentage of mean 1986 and regulations made under it, is nevertheless necessary total assets measures the proportion that administrative expenses to include to ensure consistency with the full annual accounts, as reported in this document (which include depreciation and the Annual Business Statement and Directors’ Report of the amortisation) bear to the mean of total assets. Society for the year ended 30 November 2018 Independent auditor’s statement to the We also read the other information contained in the Review of the members and depositors of Ipswich Year document and consider the implications for our statement Building Society if we become aware of any apparent misstatements or material inconsistencies with the summary financial statement. We have examined the summary financial statement of Ipswich Building Society (‘the Society’) for the year ended 30 November Our report on the Society’s full annual accounts describes the 2018 set out on pages 14 to 17. basis of our opinions on those annual accounts, the Annual Business Statement and Directors’ Report. This auditor’s statement is made solely to the society’s members, as a body, and to the society’s depositors, as a body, in accordance Opinion on summary financial statement with section 76 of the Building Societies Act 1986. Our work has On the basis of the work performed, in our opinion the summary been undertaken so that we might state to the society’s members financial statement is consistent with the full annual accounts, the and depositors those matters we are required to state to them in Annual Business Statement and Directors’ Report of the Society such a statement and for no other purpose. To the fullest extent for the year ended 30 November 2018 and conforms with the permitted by law, we do not accept or assume responsibility to applicable requirements of section 76 of the Building Societies anyone other than the society and the society’s members as a Act 1986 and regulations made under it. body and the society’s depositors as a body, for our work, for this Simon Clark statement, or for the opinions we have formed. for and on behalf of KPMG LLP, Statutory Auditor Respective responsibilities of directors and auditor Chartered Accountants One Snowhill, Snowhill Queensway, The directors are responsible for preparing the summary financial Birmingham, B4 6GH statement within the Review of the Year document, in accordance 8 February 2019 with applicable United Kingdom law. Our responsibility is to report to you our opinion on the consistency of the summary financial statement within the Review of the Year document with the full annual accounts, Annual Business 17 Directors’ Remuneration Report Year ended 30 November 2018 set out below. The Society has no share option scheme and none of the Executive Directors has any beneficial interest in, The purpose of this Report is to inform members of the Society or any rights to subscribe to any instruments (or shares in or about our policy on the remuneration of Executive and Non- debentures of, any connected undertaking of the Society). Executive Directors. The Report explains how the Society regards the principles of the UK Corporate Governance Code Basic salary 2014 relating to remuneration, as far as they are applicable to Salaries are reviewed by benchmarking against jobs carrying a mutual organisation of our size. The Society has adopted a similar responsibilities, from external salary benchmarking Remuneration Policy, which complies with the relevant elements data from the building society sector and the financial services of the FCA’s Remuneration Code and the PRA’s Remuneration sector as a whole, as well as other UK and regional salary Policy. The remuneration of individual Directors is detailed in data. This encompasses consideration as to the responsibility note 6 of the accounts. and complexity of the role, market conditions and demands and the Society’s very high quality standards. The level and components of remuneration The Society’s approach is not to compromise on quality D.1. Executive Directors’ remuneration should be designed to standards and seek to secure the best and most appropriate promote the long term success of the company. Performance people for any particular role at a rate of remuneration related elements should be transparent, stretching and consistent with the Society’s financial, business and rigorously applied. member objectives. The Society’s policy is to reward Directors according to Notwithstanding the current very competitive market for high their expertise, experience and overall contribution to the quality financial services directors, during the year the Society successful performance of the Society and reflects their roles was delighted to appoint a new Finance Director. The role was and responsibilities within the Society. The Executive Directors’ externally advertised and the salary was set at a benchmarked benefit package is designed to motivate decision-making in the level in accordance with the comparison criteria above. long term interests of the Society and members as a whole. Three year performance-related pay A performance-related pay scheme operated during the scheme year for Executive Directors. This was carefully designed to A three year performance-related pay (PRP) scheme operated encourage achievement of targets that maintain the financial during the year for Executive Directors, which was designed strength and integrity of the Society, the embedding of the to encourage the achievement of targets central to the long Society’s risk management framework and to recognise term sustainability of the Society. The PRP currently allows performance factors that contributed to the Society’s overall a maximum of 20% of salary earned for achievement of all business and member objectives. targets set which are based on cost management, mortgage Non-Executive Directors growth and member and broker satisfaction metrics and which The level of fees payable to Non-Executive Directors is are subject firstly to meeting defined financial performance assessed using information from comparable organisations and risk management criteria. One third of this payment (building societies of a similar size). is deferred until the end of the three-year period to ensure consistent performance is delivered over the longer term. As Remuneration comprises a basic fee with a supplementary part of the process the Remuneration Committee sets targets payment for holding the position of Chairman of a Committee, and assesses whether any payment should be made prior to Deputy Chairman or Senior Independent Director. This fee recommendation for board approval. reflects the additional responsibilities and time commitments of these positions. Fees for Non-Executive Directors are not Pensions pensionable and Non-Executive Directors do not take part The Society makes a contribution of between 17.5% and 20% in any incentive scheme or receive any other benefits. Non- of salary for Executive Directors’ pension arrangements. For Executive Directors do not have employment contracts with Richard Norrington and Trevor Slater this is in the form of a the Society. cash equivalent payment. Executive Directors Benefits The remuneration of Executive Directors reflects their Executive Directors receive other taxable benefits including a responsibilities and roles within the Society. This year car allowance, travel and accommodation allowance when it comprised basic salary, participation in a three-year on Society business and a private health care scheme, which performance-related pay scheme and various benefits as covers the Directors and their families. The Society does not provide concessionary home loans to Directors. 18 Non-Executive Directors 2018 Fees 2017 Fees £000 £000 D W Bowden (retired 29 March 2017) N/A 10.4 V Dias (Deputy Chairman) 30.0 27.9 P Elcock 28.0 22.8 E S Evans (Retired 30 November 2017) N/A 41.6 A Harris (Chairman) 43.0 26.6 S J Reid 28.0 22.9 M A Tennens 26.0 24.8 S Liddell (appointed 30 November 2017) 24.0 N/A F Ryder (appointed 25 October 2018) 2.4 N/A Total 181.4 17 7.0 Performance related pay

Total Salary Deferred

Executive Directors Payable now Benefits Sub Total Pension Pension Entitlements 2018 £000 £000 £000 £000 £000 £000 £000 R Norrington (Chief Executive) 169.2 18.2 9.1 25.1 221.6 33.8 255.4 T Slater (Finance Director - Appointed 28 June 2018) 48.9 5.7 2.8 7. 8 65.2 8.6 73.8 I Brighton (Operations Director - Appointed 1 May 2018) 61.7 6.4 3.2 7.1 78.4 10.8 89.2 K F Blackburn (Resigned 25 January 2018) 21.4 – – 2.4 23.8 3.7 27. 5 Total 301.2 30.3 15.1 42.4 389.0 56.9 445.9 T Slater - Remuneration from 2 January 2018 to 27 June 2018* 57. 2 6.8 3.4 9.2 76.6 10.0 86.6 2017 P Winter (Retired 31 Dec 2016) 13.0 – – 1.5 14.5 2.6 17.1 R Norrington (Chief Executive) 166.1 22.3 11. 2 17. 5 217.1 48.0 265.1 K F Blackburn (Finance Director) 109.5 14.7 – 11.9 136.1 19.2 155.3 Total 288.6 37.0 11. 2 30.9 367. 7 69.8 4 37. 5 *Given that Mr Slater was employed by the Society as a Finance Director Designate prior to his appointment to the Board, his remuneration from 2 January 2018 to 27 June 2018 is also provided. Mr Norrington and Mr Slater have elected to receive cash payments in respect of pension entitlements. Benefits include health care, car allowance and travel allowance. Total Directors’ remuneration amounted to £627,300 (2017: £614,500). Contractual terms evidence, including external professional advice if The Executive Directors are employed on open-ended service appropriate, on comparative remuneration packages. contracts; they require 12 months notice to be given by the Society It also regularly reviews regulatory requirements as and six months notice by the individual. they apply to remuneration to ensure that the regulators’ guidance is followed and applied in practice. The procedure for determining remuneration Reports and minutes of the Committee’s meetings are D.2. There should be a formal and transparent procedure for circulated to all members of the Committee and the developing policy on Executive remuneration and for fixing the Chairman of the Committee reports at the Board meeting remuneration packages of individual Directors. No Director should following a Committee meeting. be involved in deciding his or her own remuneration. Annually the Executive Team together with the Chairman The Remuneration Committee consists of four Non-Executive are responsible for setting the Non-Executive Directors’ Directors under the Chairmanship of Peter Elcock. The Chief fees. The Board, with the exception of the Chairman, Executive attends by invitation only but takes no part in the discussion agrees the Chairman’s fee. of his own salary. The Committee is responsible for the remuneration policy of all Executive Directors and it makes recommendations to Peter Elcock the Board regarding remuneration and contractual arrangements. Chairman of the Remuneration Committee The Committee meets at least twice a year and reviews supporting 8 February 2019 19 Volunteering, donations and fundraising has helped: 4YP, ActivLives, Age UK Suffolk, Barley Players, Birchwood Primary School, Blossom Appeal - Ipswich Hospital, Britannia Primary School and Nursery Ipswich, Children in Need, Compassion, Dementia Action Alliance, East Anglian Air Ambulance, Families in Need (FIND), Fresh Start - New Beginnings, Friends of Ipswich Museums, Gainsborough Museum, Volunteer Centre, Heartbeat Suffolk, High Sheriff’s Volunteer of the Year Awards, Home Start, Inspire Suffolk, Ipswich Housing Action Group, Ipswich Round Table, Ipswich Scout groups, Ipswich Society, Ipswich Transport Museum, Just Talk, Latymer Charitable Trust, Macmillan Cancer Support, Marine Conservation Society, New Wolsey Theatre, Prince’s Trust, Reach (Haverhill), Riding for the Disabled (Woodbridge), Rotary Club of and District, Royal British Legion Poppy Appeal, Saxmundham Museum, Saxmundham Music Festival, SERV (Blood bikes), Shotley Drama Group, Somersham Ward Volunteer Group, St Elizabeth Hospice, Sudbury Ephemera Archive, Suffolk Befriending Scheme, Suffolk Community Foundation, Suffolk Law Centre, Suffolk Mind, Suffolk Wildlife Trust, Support Activities for Everyone (S.A.F.E), Surviving Winter, The Shelley Centre for Therapeutic Riding, The Smile of Arran, Twilight Road Races, Ufford Parish Council, Unscene Suffolk, Wipe Away Those Tears, Woodbridge Wheelchair Rugby.

Our branches Haverhill Saxmundham 103 High Street 16a High Street 10 High Street Aldeburgh Haverhill Saxmundham IP15 5AR CB9 8AR IP17 1DD Tel: 01728 453840 Tel: 01440 710720 Tel: 01728 603876

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Ipswich Building Society Head Office PO Box 547 Ipswich IP3 9WZ 0330 123 0723 [email protected] www.ibs.co.uk

Ipswich Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered on the Financial Services Register, Firm Registration Number (FRN) 104875.