Review of the Year 2019 Including summary financial statement for year ended 30 November 2019

1849 and Suffolk Permanent Benefit and Ipswich and Suffolk Freehold Land Society established 1969

‘Permanent Benefit’ cut from the name, resulting in Ipswich & Suffolk Building Society Took in Ipswich & District Building Society, resulting 1975 in Ipswich Building Society

2020 Turn to page 8 Suffolk Buildingto find Society? out more Savings and branches To satisfy the demand for our online service we have continued to work on this channel, which remains one of our primary focus areas for the coming year. Our bolstered IT team continues to ensure that our digital infrastructure is safe and secure and it is right that From the Chairman 4 we take the time to deliver the project correctly and Membership 5 thoroughly. Community Matters 6 We are increasingly aware of the importance of our Suffolk Building Society 8 physical branches not just to our members but to the Summary Financial Statement 10 wider communities we serve – in both and Directors’ Remuneration Report 14 we are now the last remaining financial services provider on the high street. Our Hadleigh branch, first opened in 1979, has been treated to a makeover fit for the 21st century and returned to its Looking back original ‘Suffolk Pink’ colouring. at 2019 To celebrate Suffolk Day this year, we launched a duo of savings accounts in support of the Rural Coffee A welcome from Richard Norrington, Chief Caravan, a local charity which focuses on tackling rural Executive isolation across our county. The accounts were popular In the space of just a year the political and economic with our members and with the Rural Coffee Caravan, landscape has changed dramatically. which benefitted from a charitable donation of £3,000. Despite avoiding the expected recession earlier in the Supporting home ownership year, the economy remains in a fragile state with the 2019 has been a challenging year for the mortgage slowest growth for almost a decade. industry. In the face of this our mortgage advances were more than in 2018, despite having a small reduction in We will continue to carefully monitor if, and indeed how, the overall size of our mortgage book due to a planned Brexit might affect the savings and mortgage markets high number of redemptions. This has enabled us to here in the UK, although generally we do not expect a focus on having a high quality, low risk mortgage book. significant impact on our business at this time. Over the year we made a wide range of enhancements Members at the heart to our range of mortgage products. We improved our I am delighted to report that our customer satisfaction products for expats purchasing UK property by being rate stands at a record 99.4% (2018: 98.6%) and our able to accept a range of foreign currency earnings and Net Promoter Score, an indicator of how likely members also deposits saved up in a foreign currency. are to recommend us, stands at 83 which is unchanged from last year. Supporting first time buyers to get a foot on the housing ladder is one of the reasons we were founded all those Strengthening our member proposition continues to be years ago. To that end, early in the year we brought in of great importance to us. In November we embarked some exclusive first time buyer mortgages for borrowers on a new partnership with the East of England Co-op, in our area and improved our shared ownership offering giving our members access to a range of exclusive – a part buy, part rent scheme that allows borrowers to offers and discounts for three months over the Christmas get on the housing ladder with a smaller deposit. period alongside our existing range of member offers.

2 Nurturing employees At the start of the year we welcomed Suffolk Mind to provide their ‘Your Emotional Needs Met’ training to our staff, helping Key results to raise awareness of mental health in the workplace and create an environment where people feel confident in their ability to talk about and deal with mental health problems. Alongside this, all managers across the Society are Mortgage undertaking a rigorous training programme to help them assets £523m confidently develop our staff and ensure that every one of our (2018: £536m) employees gets the support and recognition they deserve. A sustainable Society In October we were delighted to welcome Elaine Lenc to our Board with more than 35 years’ experience in financial Retail services. Trevor Slater, our Finance Director, has given notice savings of his resignation which will take effect in May 2020. We balances have begun a thorough and rigorous selection process to find £603m a replacement and undertake a comprehensive handover. (2018: £572m) Being increasingly aware of the threat climate change poses, we have put in place an Environmental Action Plan and set up a green working party amongst staff. We have also strengthened our risk and compliance team to Profit before ensure we have full oversight of all procedures and to help us tax £1.9m stay abreast of increasing regulatory requirements. (2018: £3.3m) On a final note, you will be aware of the Special Resolution proposing that we change our name to become known as Suffolk Building Society, and you can read more about our plans on page 8. We have been called Ipswich Building Society for about a quarter of our 170-year lifetime, and Management we feel the time is right to return to our roots as we look to expenses £9.9m broaden our wider appeal and cement our reputation as a (2018: £9.3m) strong, growing, fiercely independent building society.

Tier 1 capital 15.0% (2018: 14.4%) Richard Norrington Chief Executive

3 Chairman’s summary Our strength is our simplicity - we deliver what we This strong and stable structure has supported the promise as a focused regional building society, developing regulatory agenda which, among other embedded and participating in our communities and things, brings an increasing focus on the important dedicated to meeting the needs of our members. areas of operational resilience, stress testing and credit risk in this extended low interest environment. I report on another busy year where our simple business model has again helped us to deliver a Our governance and oversight are all about healthy profit, albeit reduced from the previous ensuring that the Society takes risks within year. This profitability allowed us to largely appetite and that these risks are understood and maintain savings rates in a market where rates effectively managed. This brings me to the outlook have generally been reducing, which has helped for the next year and the risks and issues we are us to build savings balances at a far higher rate currently considering. than 2018. During the year, the Society’s financial We anticipate another challenging environment position was such that we were able to repay early in 2020, although the December general election the Society’s subordinated debt (external support which delivered a decisive result in Parliament may obtained a number of years ago to increase our eliminate many of the uncertainties associated capital base). This has enabled us to significantly with Brexit. reduce future interest costs whilst maintaining a strong balance sheet. This situation and reduced activity in the housing market has seen lower overall house price inflation As a strong and committed mutual, delivering only and even, in some areas, a house price decline. for members informs our approach to managing Linking this with the depth of competition in both costs and risk. We carefully managed our mortgages and savings, we again anticipate strong operational cost base again this year, ensuring all price competition and a pressure on margins. development in IT and new technology is carefully thought through. This approach to costs and our low In such a time of change it is important to thank all risk business model naturally aligns to the interests of the Society’s employees for their valued personal of our members. and team contributions. During a demanding year our members, intermediaries and communities During the year we said goodbye to two have been well served thanks to their dedication experienced members of the Board, Michelle and support. Tennens and Valerie Dias, and in October we were delighted to welcome Elaine Lenc to the Board. Elaine’s wide experience in banking, IT, strategy and change management will be invaluable as we invest in the future of the Society. Alan Harris Governance and sound management remain key Chairman areas for our Regulators. The Board uses the outputs from the Society’s Enterprise Risk Management Framework (ERMF) to give oversight to its scrutiny of operations, finances and overall decision making.

4 Making membership more meaningful

We were founded 170 years ago as the Ipswich and Suffolk Permanent Benefit Building Society and the Freehold Land Society. While the world may have changed a bit since then, the way we work has remained essentially the same – we lend out money to help people buy a home and provide a safe place for people’s savings right across the region. As a mutual organisation we’re accountable to our members. We don’t have shareholders – instead, every member owns a share in the Society, and voting members have a say in how we are run. We think membership of a building society should mean more than simply having a home for your money, or getting money for your home. That’s why we developed our membership proposition that ties together the strands of our community outreach, volunteering, events and exclusive discounts into one unique package. Over the year we welcomed 973 attendees to our events programme which included Christmas wreath making, blacksmithing workshops, a cruise along the River Deben and a tour of the Sizewell B nuclear power station. We were also delighted to have the highest AGM attendance of any building society, with just under 300 members and guests joining us to hear about the Society’s performance and be entertained by our guest speaker, Tracey MacLeod. In November last year we teamed up with the East of England Co-op, a fellow Suffolk-based mutual, to offer our members an exclusive range of offers and discounts. We look forward to taking this new partnership forward into 2020 and sharing the benefits with our members.

Our members sampling the delights at the Pump Members trying their hand at Street Chocolate factory blacksmithing at Kingdom Forge

Find your Members’ Lounge online at www.ibs.co.uk/members-lounge

5 Community Matters

We’ve been active in the community since the day To celebrate Suffolk Day on 21 June we launched a we were founded, and we’re continuing to roll up duo of savings accounts in partnership with the Rural our sleeves and support charities as well as ordinary Coffee Caravan, raising £3,000 for the charity to people who want to make a difference. support their work in tackling the growing issues of loneliness and rural isolation in our county. Through our charity support savings accounts we raised over £36,000 for local charities, including Over the year we have championed our involvement our mutual advantage account which supports nine with some of Ipswich’s biggest events, including our Suffolk-based charities, each paired with one of our role as title sponsor of the Ipswich Twilight races and branches. We’ve also supported our employees’ own Community Engagement Partner for the Elmer’s Big fundraising efforts through charitable matched funding, Parade Suffolk trail which took the town by storm over donating more than £6,000 to support good causes. the summer. We were also delighted to sponsor the New Wolsey Theatre’s annual rock ‘n’ roll panto for the We’ve continued to deliver our bespoke financial fifth year running. education sessions, clocking up an impressive 424 hours in schools, colleges and prisons in Suffolk. We We are keen to play our part in tackling climate also encourage our staff to get involved in volunteering change and are committed to reducing our by providing four hours per month so they help causes environmental impact by 10% and increasing our close to their hearts; last year we spent 631 hours recycling rate by 10% over the next two years. We helping out in the community. have signed up to an Environmental Policy and Action Plan and are putting together a committee to identify areas for improvement across the business.

We’re proud to be Suffolk through and through, and we continue to believe that organisations should support and nurture the communities in which their members and employees live and work. From the stony shores of Aldeburgh in the east to the pre-Roman town of Haverhill in the west - and all branches in between - here’s how we’ve contributed to our local communities in the past year...

donated to charities through match funding raised by St Elizabeth Hospice from the sale of our employees’ own personal fundraising sponsored elephant sculpture, Earnest Edmund, following the Elmer’s Big Parade Suffolk trail

hours in the classroom delivering financial education in member events held throughout the year schools, colleges and prisons

6 students raised through our philanthropic savings accounts. helped to develop career skills through Our Mutual Advantage account supports charities work experience placements in each of our branch towns and We Care (closed issue) supports St Elizabeth Hospice, Suffolk Wildlife Trust and East Anglian Air Ambulance visitors to Mutual House, our historic flagship branch, during Heritage Open Weekend

employees who took part in financial Silver Award from the Suffolk education and volunteering over the year Carbon Charter in recognition of our efforts in reducing our environmental impact

hours spent volunteering for local charity and staff attendees on Suffolk community groups Mind’s ‘Your Emotional Needs Met’ training

Ipswich Building Society has become a Ipswich Building Society is also building an “long-standing and very loyal partner of Suffolk Endowment Fund which is heading towards the Community Foundation, supporting education £20,000 mark. With continued growth this will projects, sponsoring the High Sheriff’s Awards ensure stability of grantmaking into the future. and playing a key role across all its branches in Suffolk Community Foundation are delighted to our Surviving Winter appeal. work in partnership with Ipswich Building Society Ipswich Building Society has chosen not to help change local lives. to convene their own grants panel with the ” Foundation, instead preferring to contribute to the central grantmaking of the Suffolk Giving Fund. In the year to 30 June 2019 the Suffolk Giving Fund distributed grants amounting to £185,056 supporting charities and community groups throughout Suffolk.

7 We’re Suffolk through and through In 2020 Ipswich Building Society is asking members for approval to change its name, to become known as Suffolk Building Society.

It is a new name to make us more appealing across the county we call home – and an old name to stay true to our roots.

In 1849 we were founded as the ‘Ipswich and Suffolk Permanent Benefit Building Society’ and over our 170 years have dedicated ourselves to protecting the money of generations, for generations, with a continuing physical presence on high streets across the region.

Looking to the future we will be exploring new ways to serve more members and grow independently and responsibly; increasing the availability of our services through online access; supporting the financial needs of people throughout Suffolk.

It is a new name that’s inclusive, connecting to a broader community – and an old name that marks our historic commitment to the county we serve.

Whilst so much has changed in the last 170 years, we remain proud of our home and the people who make it. Proud of our values and way of life. We are where we’re from. We’re Suffolk through and through.

A timeline of development 1849: Ipswich and Suffolk Permanent Benefit Building Society and Ipswich and Suffolk Freehold Land Society established 1969: ‘Permanent Benefit’ cut from the name, resulting inIpswich & Suffolk Building Society 1975: Took in Ipswich & District Building Society, resulting in Ipswich Building Society 2020: Suffolk Building Society?

8 A sustainable Society By evolving our name, we are ensuring the long-term sustainability of the Society and making ourselves more relevant to more people across our home county and beyond. In 2019 we carried out independent research which indicated limitations relating to the Society’s current name and brand proposition especially in areas where we have no branch presence and are looking to extend the reach of our services and appeal, such as in Bury, Norwich and Colchester. Proceeding with a name change now is rightly timed ahead of two big projects where we can embed the change at the start and not incur any additional costs. These are online savings, which we know members are keen for us to deliver, and a complete rebuild of our website. By building a new site we can take advantage of increases in technology, improve in-house capability and make considerable ongoing cost savings.

We have also consulted with members and staff about the change – here’s what some of our members had to say:

“Although always served well by the Society, we “This will incorporate all areas of the county not just are not from Ipswich, but now feel more included appear local to Ipswich, helping all areas of Suffolk in its name change, and think other members will feel included and spreading the customer base, too. A truly forward-thinking Society!” adding new clients and suggesting a bigger Society Mr and Mrs W, Suffolk for all. We must be allowed to grow to survive.” Mr and Mrs M, Suffolk “I believe the name change is beneficial to our society. The new name Suffolk Building Society “If the ‘Suffolk’ is to expand, but more will show that it encompasses all the peoples of fundamentally retain the individuality of the whole Suffolk and not just Ipswich and its environs. We region, then the name change is not such a bad believe members will largely support the change idea but an excellent idea. and building and we would like to say to other members:- The societies are closing branches and amalgamating Suffolk Building Society has successfully served and the people of ‘Suffolk’ can now look to invest our forebears; let us ensure its continued success in, not a county town, but a great county name for the generations to come.” and put it on the map.” B and M of Rushmere St Andrew KIT, Suffolk

Changing to Suffolk Building Society If members vote for the name change we will work to implement this later in 2020. By planning ahead we will be able to run down existing stock to a minimum, reducing wastage and cost. This means you won’t see an immediate change and we will keep you notified of when the change will happen by posting updates on our website, within our email newsletter and in our branches.

9 Summary Financial Statement Year Ended 30 November 2019 This financial statement is a summary of the These improvements have been crucial to the Society’s information in the audited Annual Accounts, movement towards the development of online savings. the Directors’ Report and Annual Business The Society’s mortgage assets reduced by £13m Statement, all of which will be available to in the year, largely due to a high level of expected members and depositors free of charge on maturities. New business did increase compared to demand at every office of Ipswich Building 2018, although not at a sufficient rate to replace the large levels of maturities. In 2020 we are confident of Society from 19 February 2020. returning to growth, with maturing mortgages being significantly lower. The Summary Financial The Society is fiercely committed to being a Statement was approved membership-owned organisation. by the Board of Directors Looking ahead on the 5 February 2020. The Directors are committed to ensuring the long-term sustainability of the Society and a three-year plan is in place which is dedicated to maintaining the Society as Alan Harris Chairman an independent mutual society. During 2019 the Society Richard Norrington Chief Executive commenced first steps towards the development of an Trevor Slater Finance Director online savings proposition. This project will continue Summary Directors’ Report throughout 2020 and it is hoped that the service will be available to members in 2021. Offering simple and straightforward savings products to investing members and providing mortgages so that Mortgage assets and mortgage advances borrowing members can buy a home has been the The Society’s mortgage book reduced by £13m this Society’s main purpose for 170 years and continues year, always expected to be a particularly challenging to be so. year with very high mortgage maturities. With the Business review original interest rates for these mortgage customers extremely low and the customer base likely to be The Society ended the year with a profit before tax of less loyal, the Society diverted significant efforts into £1.9m (2018: £3.3m). Good capital retention in 2018 mortgage retention activity to mitigate a potentially meant that the Society was able to take the significant material loss of business in a very short space of time. step of repaying £3.5m of subordinated debt early, The rates offered at maturity were pitched at an amount which was external support obtained a number of years which sought to contain the loss of volume whilst not ago to increase our capital base, resulting in savings presenting an unacceptable cost to future margin. The on interest payments over the next 5 years. In addition, volume of business retained was in line with the planned retail savings have grown significantly by £31m. The amount. result of this is that the Society was able to repay £15m of Term Funding Scheme drawings earlier than planned. The Society has originated new business at a higher rate than the previous year and a wide mix of business has This year the Society has made a number of been obtained. improvements in its IT infrastructure, including IT security and increased reliability of management information.

10 Arrears There has been a decrease in arrears cases over 12 months compared to the previous financial year and arrears performance remains low and below the Society’s risk appetite. At 30 November 2019 there were 7 (2018: 9) mortgage accounts where the arrears were the equivalent of 12 months’ payments or more. Capital The total amount of principal outstanding in these cases The Society’s total regulatory capital is £35 million, a was £1.2m (2018: £830k). decrease of £2 million on the previous year. During Retail savings balance the year the Society took the opportunity to repay £4 million of subordinated debt, £3.5 million of which The Society is pleased to note that retail savings was repaid five years prior to its maturity date. This has balances have increased by £31m in the last year reduced the proportion of subordinated debt within the (2018: £5m). Savings growth was a priority in 2019 Society’s total capital from 10% at 30 November 2018 to ensure that momentum was gained in advance to just 0.1%. The remainder of our capital is made up of of Term Funding Scheme repayments scheduled to retained reserves. commence in 2020. Savings rates across the industry have been falling over the period and with the Whilst the overall amount of capital has reduced, the Society initially maintaining rates, growth has been quality of the Society’s capital has increased and our consistently achieved each month. In view of the strong capital position remains strong. The Tier 1 Capital Ratio performance, the decision was made to repay £15m was 15.0% at 30 November 2019 (2018: 14.4%). (from a total due of £45m) of Term Funding Scheme balances in the final weeks of November 2019. Community, economy and environment The Society has a strong commitment to social Profit for the financial year responsibility in all its forms. We continued our The Society achieved a profit before tax of £1.9m. This employee volunteering and financial education is a reduction compared with last year’s £3.3m. The programmes and offered matched funding to reduction is partly related to the cost of funding higher employees for personal sponsorship of local charities. savings balances, together with additional costs in 2019 from adverse fair value movements on derivatives. The Society was awarded the Silver Suffolk Carbon The Board remains confident the Society can remain Charter Award in 2019 as recognition for the measures profitable over the three-year corporate plan period we have implemented to reduce our carbon emissions. which will build the capital required to support the Customer satisfaction growth of the mortgage book at a rate faster than the rate of growth of management expenses. Member satisfaction levels and Net Promoter Score remain extremely high at 99.4% (2018: 98.6%) and 83 Management expenses (2018: 83) respectively. In 2019 the level of management expenses was within Net Promoter Score is a score showing how likely the Society’s plan. Costs have been very closely tracked members are to recommend us to others. These results throughout the year. are based on 1,511 completed surveys for the financial year across a spectrum of activities including account opening and closing.

11 Summary Financial Statement Year Ended 30 November 2019 2019 2018 £000 £000 Results for the year Net interest receivable 11,998 12,663 Other income and charges (60) (249) Net income from financial instruments at fair value (445) (127) Administrative expenses (9,852) (9,267) Provision for impairment losses on loans and advances 242 206 Release/(charge) for customer redress – 59 Profit for the year before taxation 1,883 3,285 Taxation (435) (645) Profit for the financial year 1,448 2,640

Other comprehensive income Actuarial (loss)/gain recognised in the pension scheme (131) 183 Movement in related deferred tax 23 (31) Movement in fair value of debt securities (22) (21) Movement in related deferred tax 4 4 Revaluation gain on freehold property – 1,322 Movement in related deferred tax – (225) Total comprehensive income for the year 1,322 3,872

Financial position at end of year Assets Liquid assets 142,392 114 , 791 Derivative financial instruments 35 578 Mortgages 523,062 536,183 Fixed and other assets 6,998 6,333 Total assets 672,487 6 57,885

Liabilities and reserves Shares 556,677 520,426 Borrowings 76,470 96,294 Derivative financial liabilities 1,063 57 Other liabilities 1,913 1,718 Net pension liability 90 431 Subordinated liabilities 554 4,561 Reserves 35,720 34,398 Total liabilities and reserves 672,487 6 57,885

Summary of key financial ratios % % Gross capital as a percentage of shares and borrowings 5.65 6.18 Liquid assets as a percentage of shares and borrowings 22.49 18.61 Profit for the year as a percentage of mean total assets 0.22 0.41 Management expenses as a percentage of mean total assets 1.48 1.42 12 Notes to the Summary Financial Statement • Checking that the format and content of the Summary Financial For the year ended 30 November 2019 Statement is consistent with the requirements of section 76 of the Building Societies Act 1986 and regulations made under 1. The gross capital ratio measures the proportion that the it; and Society’s capital bears to the Society’s shares and borrowings. Capital consists of the Society’s general reserves which are • Considering whether, in our opinion, information has been the profits of the Society accumulated over the last 170 years, omitted which although not required to be included under the together with an amount of capital raised in the form of allowable relevant requirements of section 76 of the Building Societies Act subordinated debt. Society capital provides a financial buffer. 1986 and regulations made under it, is nevertheless necessary to include to ensure consistency with the full annual accounts, 2. The liquid assets ratio measures the proportion that the the Annual Business Statement and Directors’ Report of the Society’s assets held in the form of cash, short term deposits Society for the year ended 30 November 2019. and Government securities bears to the Society’s shares and borrowings. As liquid assets are by their nature readily realisable, We also read the other information contained in the “Review of this assists the Society in its cash management and enables the the Year 2019” and consider the implications for our statement Society to meet requests by investors for withdrawals from their if we become aware of any apparent misstatements or material accounts, to make new mortgage loans to borrowers and to fund inconsistencies with the Summary Financial Statement. its general business activities. Our report on the Society’s full annual accounts describes the 3. The ratio of profit for the year as a percentage of mean total basis of our opinions on those annual accounts, the Annual assets measures the proportion that the profit after taxation for the Business Statement and Directors’ Report. year bears to the average balance of the total assets during the Directors’ responsibilities year. A reasonable level of profit must be generated each year by the Society to maintain its capital ratios, thereby protecting The Directors are responsible for preparing the Summary investors’ funds. Financial Statement within the “Review of the Year 2019”, in accordance with applicable United Kingdom law. 4. The ratio of management expenses as a percentage of mean total assets measures the proportion that administrative expenses Auditor’s responsibilities as reported in this document (which include depreciation and Our responsibility is to report to you our opinion on the amortisation) bear to the mean of total assets. consistency of the Summary Financial Statement within the “Review of the Year 2019” with the full annual accounts, Annual Independent auditor’s statement to the Business Statement and Directors’ Report and its conformity with members and depositors of Ipswich the relevant requirements of section 76 of the Building Societies Building Society Act 1986 and regulations made under it. Opinion The purpose of our work and to whom we owe our We have examined the Summary Financial Statement of Ipswich responsibilities Building Society (‘the Society’) for the year ended 30 November This auditor’s statement is made solely to the Society’s members, 2019 set out on pages 10 to 13. as a body, and to the Society’s depositors, as a body, in accordance with section 76 of the Building Societies Act 1986. On the basis of the work performed, as described below, in our Our work has been undertaken so that we might state to the opinion the Summary Financial Statement is consistent with the full Society’s members and depositors those matters we are required annual accounts, the Annual Business Statement and Directors’ to state to them in such a statement and for no other purpose. To Report of the Society for the year ended 30 November 2019 and the fullest extent permitted by law, we do not accept or assume conforms with the applicable requirements of section 76 of the responsibility to anyone other than the Society and the Society’s Building Societies Act 1986 and regulations made under it. members as a body and the Society’s depositors as a body, for Basis for opinion our work, for this statement, or for the opinions we have formed. Our examination of the Summary Financial Statement consisted Peter Lomax primarily of: for and on behalf of KPMG LLP, Statutory Auditor • Agreeing the amounts and disclosures included in the Summary Chartered Accountants Financial Statement to the corresponding items within the full 66 Queen Square annual accounts, Annual Business Statement and Directors’ Bristol Report of the Society for the year ended 30 November BS1 4BE 2019, including consideration of whether, in our opinion, the 5 February 2020 information in the Summary Financial Statement has been summarised in a manner which is not consistent with the full annual accounts, the Annual Business Statement and Directors’ Report of the Society for that year; 13 Directors’ Remuneration Report Year ended 30 November 2019 The purpose of this Report is to inform members of the Society performance-related pay scheme and various benefits as about our policy on the remuneration of Executive and Non- set out below. The Society has no share option scheme and Executive Directors. The Report explains how the Society none of the Executive Directors has any beneficial interest in, regards the principles of the UK Corporate Governance Code or any rights to, subscribe to any instruments, or shares in or relating to remuneration, as far as they are applicable to a debentures of, any connected undertaking to the Society. mutual organisation of our size. The Society has adopted a Remuneration Policy, which complies with the relevant elements Basic salary of the FCA’s Remuneration Code and the PRA’s Remuneration Salaries are reviewed by benchmarking against jobs carrying Policy. Directors are designated as “Code Staff” under the similar responsibilities, from external salary benchmarking Regulator’s Remuneration Code due to their material impact on data from the building society sector and the financial services the Society’s risk profile. sector as a whole, as well as other UK and regional salary data. This encompasses consideration as to the responsibility The level and components of and complexity of the role, market conditions and demands remuneration and the Society’s very high quality standards. The Society Executive Director remuneration should be designed to seeks to ensure it attracts and retains experienced and high promote the long-term success of the Society. Performance- performing people in a highly competitive market. related elements should be transparent, stretching and The Society’s approach is not to compromise on quality rigorously applied. standards and seek to secure the best and most appropriate The Society’s policy is to reward Directors according to their people for any particular role at a rate of remuneration expertise, experience and overall contribution to the successful consistent with the Society’s financial, business and member performance of the Society. This remuneration reflects their objectives. roles and responsibilities within the Society. Three year performance-related pay The Executive Directors’ benefit package is designed to scheme motivate decision making in the long-term interests of the A three year performance-related pay (PRP) scheme operated Society and members as a whole. A performance-related pay during the year for Executive Directors, which was designed scheme operated during the year for Executive Directors. This to encourage the achievement of targets central to the long was carefully designed to encourage achievement of targets term sustainability of the Society. The PRP currently allows that maintain the financial strength and integrity of the Society, a maximum of 20% of salary earned for achievement of all the embedding of the Society’s risk management framework targets set which are based on business performance, cost and to recognise performance factors that contributed to the management, capital and member and broker satisfaction Society’s overall business and member objectives. metrics and which are subject firstly to meeting defined financial performance and risk management criteria. One Non-Executive Directors third of this payment is deferred until the end of the three- year The level of fees payable to Non-Executive Directors is period to ensure consistent performance is delivered over assessed using information from comparable organisations the longer term. As part of the process the Remuneration (building societies of a similar size). Committee sets targets and assesses whether any payment Remuneration comprises a basic fee with a supplementary should be made, prior to recommendation for board approval. payment for holding the position of Chairman of a Committee, Deputy Chairman or Senior Independent Director. This fee Pensions reflects the additional responsibilities and time commitments The Society makes a contribution of between 17.5% and 20% of these positions. Fees for Non- Executive Directors are not of salary for Executive Directors’ pension arrangements. For pensionable and Non-Executive Directors do not take part Richard Norrington and Trevor Slater this is in the form of a in any incentive scheme or receive any other benefits. Non- cash equivalent payment. Executive Directors do not have employment contracts with the Benefits Society. Executive Directors receive other taxable benefits including a Executive Directors car allowance, travel and accommodation allowance when The remuneration of Executive Directors reflects their on Society business and a private health care scheme, which responsibilities and roles within the Society. This year covers the Directors and their families. The Society does not it comprised basic salary, participation in a three-year provide concessionary home loans to Directors. 14 Non-Executive Directors 2019 Fees 2018 Fees £000 £000 V Dias (retired 30 June 2019) 18.7 30.0 P Elcock (Deputy Chairman) 30.5 28.0 A Harris (Chairman) 45.0 43.0 S J Reid 29.5 28.0 M A Tennens (retired 27 March 2019) 8.9 26.0 E Lenc (appointed 1 October 2019) 4.0 N/A S Liddell 26.9 24.0 F Ryder 26.7 2.4 Total 190.2 181.4 Performance related pay

Total Salary Deferred

Executive Directors Payable now Benefits Sub Total Pension Pension Entitlements 2019 £000 £000 £000 £000 £000 £000 £000 R Norrington (Chief Executive) 173.3 23.5 11. 7 25.3 233.8 34.7 268.5 T Slater (Finance Director) 119.0 – – 20.0 139.0 20.8 159.8 I Brighton (Operations Director) 104.5 14.1 7.1 11. 5 137. 2 18.2 155.4 Total 396.8 37.6 18.8 56.8 510.0 73.7 583.7

2018 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

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. T Slater resigned in November 2019. Under the rules of the Performance Related Pay Scheme no payment is due when an employee has given notice. Total Directors’ remuneration amounted to £773,900 (2018: £627,300).

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 regulator’s guidance is followed and applied in practice. The procedure for determining remuneration Reports and minutes of the Committee’s meetings are There should be a formal and transparent procedure for developing circulated to all members of the Committee and the policy on Executive remuneration and for fixing the remuneration Chairman of the Committee reports at the Board meeting packages of individual Directors. No Director should be involved in following a Committee meeting. 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 5 February 2020 15 Volunteering, donations and fundraising have helped: 11th Ipswich Scouts, 4YP, Access Community Trust, Britannia Primary School and Nursery, Cancer Campaign in Suffolk, Canine Partners, East Anglian Air Ambulance, Families in Need (Suffolk), Fresh Start New Beginnings, Gainsborough House, Halesworth Volunteer Centre, Home Start in Suffolk, Ipswich Building Preservation Trust, Ipswich Hospital Critical Care Unit, Ipswich Housing Action Group, Ipswich Roundtable, Long Melford Good Neighbour Scheme, Macmillan Cancer Support, Minor Counties Cricket Festival, New Wolsey Theatre, Rural Coffee Caravan, St Elizabeth Hospice, Suffolk Age UK, Suffolk Befriending Scheme, Suffolk Wildlife Trust, Surviving Winter, The Chapman Centre, The Princes Trust, The Shelley Centre, The Smile of Arran, Whitton United FC.

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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.