Newbury Building Society MEMBERS’ REVIEW INCORPORATING SUMMARY FINANCIAL STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2020 Members’ Review

The Directors have pleasure in presenting the Members’ Review incorporating the Summary Financial Statement of the Society for the year ended 31 October 2020.

Contents

Our Highlights 3 Chairman’s Statement 4 Chief Executive’s Review 6 Society Purpose Statement 10 Community Support in 2020 11 Summary Financial Statement 12 Summary Directors’ Report 12 Notes to the Summary Statement 24 Independent Auditor’s Report 25 Directors 26 Directors’ Attendance Record 28 Directors’ Remuneration Report 28 Notice of the 164th Annual General Meeting 33 Members’ Review Our Highlights

Mortgages Savings & Funding

• Our mortgage book increased by £55m to £1,016m • Savings balances increased £66m to £1,042m • We lent £181m to mortgage customers (2019: £201m) • Inflows into our ISA accounts and easyaccess accounts were significant factors in the growth • Continued strong demand for our residential and affordable housing mortgages • We held funding of £96m from the Bank of England Term Funding Scheme at year end (2019: £114m)

• Liquid assets of £200m at year end (2019: £217m)

Mortgage Balances Savings Balances

£1,042m £1,050m £1,050m £1,016m £1,000m £1,000m

£950m £950m

£900m £900m

£850m £850m

£800m £800m

£750m £750m

2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

Financial strength Members

• Our profit after tax was £3.2m (2019: £4.4m) • Our member numbers increased by more than one • Our regulatory capital grew £3.3m to £83.4m thousand to 72,275 (2019: £80.1m) • Our mystery shopping scores averaged 92% (2019: 97%) • Our Total Capital Ratio reduced to 19.4% (2019: 20.0%) • Complaints as a percentage of members was 0.07% (2019: 0.16%)

Regulatory Capital Member Numbers

£85m £83.4m 80,000

72,275 £80m 72,000

£75m 70,000

£70m 68,000

£65m 66,000

£60m 64,000

£55m 62,000 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

2020 Members’ Review - Newbury Building Society 3 Chairman’s Statement

2020 will be remembered duty holiday for property purchases up to as the year in which those £500k was clearly a factor in this, and over who run our country had half the year’s lending growth occurred in to manage the dilemma the last quarter of the year. We enter the of balancing the physical new year with a strong pipeline of business wellbeing of its citizens waiting to complete, in a market where against the current and demand for services from solicitors, valuers, future economic health of local authorities and the Land Registry are the country. Consequently, almost everyone putting the market under considerable strain. has been impacted in some way. Our first The perceived wisdom is that this bubble will thoughts are for those personally affected not last and we are expecting next year to be by the Covid-19 pandemic, particularly those turbulent as Covid-19 threats continue, with members who sadly succumbed to this disease the prospect of higher levels of unemployment or who lost relatives and loved ones. as furlough and other government support As for your Society, we were not immune schemes come to an end and a reduction in from Covid-19’s impact, but we have proven Gross Domestic Product affecting the housing ourselves to be somewhat resilient. Your society market. We also appreciate there is potential worked hard to serve its membership, to keep for another impact on confidence through the Society going and growing in the year. Brexit, as the country will also have left behind Europe’s free trade rules when the Brexit I can report that our key business results for the transition year ends on 31 December. Sadly, year were very close to the targets we had set the Brexit outlook still remains uncertain as we ourselves back in October 2019, in other words write this report. targets set before Covid-19 was even known about. The savings market has been buoyant too with many investors seeking the calmer waters The global Covid-19 pandemic not only caused offered by deposit takers during the Covid national lockdowns including the seven- storm. With the Bank of England offering a week period in the spring when the housing new Term Funding Scheme (TFSME) designed market was essentially closed, it also had to ensure sufficient liquidity in the markets to a transformational impact on our working enable adequate levels of lending, the Society practices. The majority of our employees has a further source of funding available to it had to flex to home working, enabled by the until October 2021 to replenish liquidity used to technology upgrades we fortunately made in service the unprecedented mortgage demand 2019. With the agility and commitment of all in the summer and autumn. employees we were able to keep up the level of service to which you have become accustomed. We did not need to close our doors during Even Board meetings were conducted remotely lockdowns, as money transmission is defined using the technology, and more frequently as a key service, and although we reduced our during this troubling period. This demonstrated opening hours, we were able to provide branch practically the effectiveness of our business service in all our branches for almost every continuity planning and resilience to enforced weekday and most Saturdays throughout the operational changes. year. I thank all our members for your custom during the year and I also thank our employees The housing market was astonishingly strong and you our members for your adherence to in the latter part of the year, given the impact the changed service standards imposed by of Covid-19 on the wider economy. The stamp Covid this year.

4 2020 Members’ Review - Newbury Building Society There have been two changes to Board Finally, I am delighted to advise that your members this year, with the arrivals of Darren Society has been operating from new Garner as our Finance Director and Alistair headquarters since November. The Society Welham as a non-executive director. Darren has grown in size and strength for many joined the Society and the Board in August and years with the result that we had outgrown brings significant strength and rigour to our our premises at 17 Bartholomew Street, a Finance and Treasury function. Prior to joining building constructed in 1982 and extended the Society, his career has included more than three times since then. After a three-year ten years experience as finance director of search for suitable freehold premises, we have building societies and we have already seen the purchased 90 Bartholomew Street, a town benefit of this in his first few months here. He centre office building also built in the 1980s and succeeded Richard Jones, a specialist interim previously owner-occupied by Vodafone and Finance Director who served us following Kieron then Sovereign Housing Association. We have Blackburn’s resignation in January. Alistair taken the opportunity to completely refurbish joined the Board in February and is a marketing the premises, which now provides the size and specialist currently working in the insurance quality of building to secure our head office industry. He has already made a significant future for decades to come. We now have a contribution to our Sales, Marketing and building where all colleagues have the space Product Committee as the Society has needed to socially distance, a differentiating factor for to respond promptly to changing market us over other employers who have less space to conditions. accommodate safe returns to the office, once I was due to retire from the Board at the AGM the immediate threat of Covid has abated. in February 2021. However, as a result of the At the time of writing, the premises at 17 Covid-19 pandemic, the Board asked me to Bartholomew Street have been sold, subject to serve one more year in order to provide an contract, with the expectation that the sale will element of continuity at a time of so much complete in the first quarter of 2021. change and to give me more time to oversee the Society’s digital development programme, Peter Brickley, Chairman which had inevitably been delayed by the 21 December 2020 Covid crisis. I will now retire in February 2022.

2020 Members’ Review - Newbury Building Society 5 Chief Executive’s Review

This has been a most the provision of a competitive range of fixed unusual year for the and discounted mortgages mainly for owner Society, but one I am occupiers, but also for BTL landlords. With pleased to commend to the onset of Covid, we made a number of our membership from temporary lending policy changes, firstly to a business results and mitigate risk in uncertain times and secondly development perspective. to manage the demand for mortgages which My executive team and indeed the whole surprisingly increased, at least in part due to staff of the Society have had to dig deep to competitors withdrawing from anything other provide members with our usual standard of than low loan to value standard residential service, given the Covid pandemic. The regular lending. The Society believes its purpose feedback from you, collected independently and role as a mutual is to lend to all types by Smart Money People, suggests we have of aspiring homeowners and therefore our succeeded in doing so. Indeed, I believe the strong capital base gave us encouragement reaction of the whole Society’s staff to the to continue to offer loans in areas of the onset of Covid restrictions, changing working residential market where appropriate returns practices and at times significantly increased for risk can be made, such as the first-time workloads was magnificent, and you have buyer products in the Help To Buy range been generous in saying so. We never needed (shared ownership and shared equity), to to close our doors to savers or borrowers during customers with credible repayment plans who the year and despite lockdown, we nimbly require interest only mortgages and to those amended our procedures and processes to seeking mortgages beyond normal retirement maintain a lending service throughout. The dates. Although our lending growth was slightly ability to trade all year reflects itself in our lower than in recent years, the level of growth results, which continue the path of asset was nevertheless sufficiently strong to be no growth and profitability in an appropriate cause for concern. equilibrium. What became clear very early during the The Society recorded pre-tax profit of £4.1m, first lockdown period was that a number down from the £5.5m reported in 2019, of our borrowers needed help to overcome impacted by a reduced net interest margin, interruptions to their usual income. In increase in management expenses and higher accordance with FCA instructions, we provided impairment charges. These are all covered payment deferrals of three or six months to in more detail in the Strategic Report which those in need and we agreed deferrals for more follows my review. The Society responded than 1,000 of our mortgage clients during the to the reduction in Bank rate to 0.1% in a year, about 14% of our borrowers, similar to balanced manner by reducing both its SVR and the national average. Giving advice and help savings rates by 0.5%, however margin was and ensuring that the best solution is found for negatively impacted through lower earnings each member is a time-consuming business. from the Society’s liquid assets. A prolonged Our Customer Service staff, backed up by period of low interest rates will be unwelcome support from their branch colleagues, have news for savers and will continue to act as a been tireless in helping our borrowing members drag on the Society’s profitability but despite and it is pleasing to see that a significant this the Society intends to continue offering a majority of the borrowers who took deferrals competitive range of products and services to were able to resume their payments after their borrowing and savings members alike. deferral period without the need for further The Society’s lending proposition has been forbearance measures. In almost all cases, our unchanged for many years. It is based on borrowers chose to capitalise their deferred

6 2020 Members’ Review - Newbury Building Society interest payments. The Society increased support community projects of their choosing Chief Executive’s Review provisions as a result of Covid’s impact on its through volunteering. During the year, borrowers and, although this has the effect of volunteering activities included: reducing profitability, the overall prognosis for • Participating in mentoring sessions for the mortgage book is healthy and the business pupils at Didcot Girls School. continues to be strong and well capitalised. • School Governor responsibilities at local Community schools. I am pleased to say that despite a year of • Gardening activities for mental health unprecedented change and unforeseen charity, Restore, ahead of Oxfordshire challenges, the Society remained committed Artsweek. to supporting those who live and work in the The Society donated a total of £9,023 (2019: communities within our branch areas. We £11,426) to 23 local community projects through managed to find ways to undertake fundraising its Community Support Scheme, with a special activities as well as offer sponsorships, donate focus on those assisting vulnerable groups financial aid and volunteer time to worthwhile during the Covid-19 lockdown periods. The causes. Our head office and branch employees scheme continues to provide financial awards supported their charity partners throughout to local organisations involved in improving the year, and the Society again fund-matched community life within the Society’s ten branch the amount raised to boost the total financial towns. support. Projects which benefitted from the Community In total this year, the Society made donations Support Scheme in 2019/20, included: of nearly £59,000 (2019: £54,000) in support of local charities and community organisations. The Society’s Charity savings account remained popular and the Society continued to make an annual donation of 0.4% interest to each account member’s preferred charity. Despite the Bank Base Rate reduction in April, we held the payment at 0.4% with the result that during the financial year £25,000 (2019: £21,000) was generated and split between the chosen charities. This year, in light of the difficulties experienced by so many charities during lockdown, the Society made a pre- payment of £30,000 to assist its nine charity West Berkshire Foodbank received a cheque partners bridge the gaps in funding caused by for £1,000 from Newbury Building Society’s the cancellation of key fundraising events. Community Support Scheme. Although limited, due to Covid-19 safeguarding • Ray Collins Charitable Trust, West restrictions, fundraising activities during the Berkshire: to assist with the purchase of year included a representative of Basingstoke food parcels and other essential items for branch taking part in St Michael’s Hospice’s vulnerable people in the local community Let’s Get Virtual challenge in June, walking affected by Covid-19. 200km and raising £370, and employees from Abingdon and Didcot branches raising funds • Be Free Young Carers, Oxfordshire: to for their charity partner, Helen & Douglas help adapt the way the charity reached House, by taking part in its Blenheim 7k virtual young carers during Covid-19 lockdown fun run. restrictions through its specialist online befriending scheme. The Society continued to offer employees the opportunity to take two days paid leave to • Time to Talk West Berks: to train five

2020 Members’ Review - Newbury Building Society 7 counsellors in online counselling skills to • The Society was confirmed as lead support young people struggling with sponsor of the first Big Basingstoke anxiety and other mental health concerns. Sleep-Out event in partnership with Julian • West Berkshire Foodbank: to purchase House and the Camrose Centre to support food and other essential items to support homeless and excluded men and women in approximately 1400 people in the local the local area. The event, which was due area. to take place in March 2020, will hopefully take place spring 2021. • Service for Emergency Rider Volunteers (SERV): to help maintain a small fleet of • Junior Newbury Building Society (JNBS) vehicles to support the charity deliver digitalised its outreach programme to essential emergency equipment to the NHS ensure participating primary school and other communities in Hampshire. children continued to learn how to save and the importance of money during The Society honoured local unsung heroes at its Covid-19 lockdown restrictions. first Community Champion Awards in February. The awards celebrated individuals who make a Future positive contribution to their local community There are many challenges ahead for the but may not necessarily receive the recognition Society as we continue to absorb and manage they rightly deserve. Lynne Taylor, a volunteer the impact of Covid and specifically what it at children’s charity Dingley’s Promise, was has done to catalyse different behaviours in the crowned the overall Community Champion, provision and consumption of financial services. while Matt Collins, a scout leader at the 3rd One problem we have resolved is the matter Alton Scout Group, Len Potts, a volunteer at of our head office building. As the Chairman Parkinson’s UK Basingstoke branch, and Carole stated, we had outgrown our premises at 17 Grey, a volunteer at Wokingham Foodbank, Bartholomew Street and were on the cusp of were recognised as highly commended starting on a fourth extension, for which we nominations. had obtained planning permission, but which Other events and activities undertaken in our would still not have fully resolved the long term communities included: requirements of our growing business. The opportunity to acquire 90 Bartholomew Street was serendipitous and we grabbed it gratefully, knowing that despite the current requirements for working from home, we now have a building fit for purpose and one to help attract top calibre staff in the future. Under-investment in a tired building at 17 Bartholomew Street had become an issue, now thankfully resolved. One of the advantages of acquiring a building in need of modernisation has been the opportunity to put our green ambitions Newbury Building Society’s Abingdon branch visited Homeless Oxfordshire to help unpack donations into practice. The focus and importance made through the NBS Winter Wrap-Up Appeal. of environmental change has never been more prominent and the Board’s three pillar • The launch of the Society’s first Winter approach to its Green ambition strategy is: Wrap-up Appeal in which winter clothing 1. To reduce our carbon footprint by was donated and distributed between improving our buildings energy efficiency various local charities committed to and conserving energy through new improving the lives of homeless and technology vulnerable people in Berkshire, Hampshire and Oxfordshire. 2. To help our members lead greener lives by

8 2020 Members’ Review - Newbury Building Society providing access to guidance, funding and will in reality offer a diminished opportunity to support to help with home improvements return results at the levels of recent years. We 3. To support initiatives to make the homes are projecting a lower level of growth to reflect on which we lend more energy efficient our belief that the nature of the mortgage and better prepared for regulatory and market will be more challenging than usual. We environmental change. also anticipate having to offer tailored solutions for mortgage payment difficulties to many more The Society also recognises the risks and members than would normally be the case. challenges posed by climate change. While the financial risks from climate change may The Society’s vision is to be the chosen provider crystallise in full over longer time horizons, they of savings and mortgages in its operating area. are also becoming apparent now. The Society As the Society encounters a new era in the particularly recognises two risks: physical and provision of Financial Services, characterised by transitional. Physical risks relate to specific Open Banking and the Fintech revolution, there weather events such as flooding, or longer-term are more options than ever for people on how events such as rising sea levels. A key element to manage their money. The Board is very much of this risk is to property, both the Society’s aware of the Society’s need to embrace change own properties and properties held as security by investing in its staffing and technological for lending. Transition risks can arise from the capabilities, and members will therefore see process of adjustment towards a low-carbon changes and improvements to the way the economy. This could lead to a changing Society delivers its products and services in regulatory expectation in terms of the way the the coming months and years. The growth Society is expected to run its own business, and profitability of recent years has provided including who it uses as suppliers. It may also the foundations for the Society to make these impact property held as security, for example investments, not only for the benefit of our the energy efficiency expectations of properties current members, but also for those who will be mortgaged for Buy to Let purposes. The Society our future members. is increasingly mindful of these risks when Technology acts as an enabler to our making business decisions, including mortgage service proposition and whilst technological lending underwriting decisions. development will be a key focus, the Board The Society will continue to provide a full also remains fully committed to a branch mortgage and savings service in its branches network, promoting a savings culture using fair and we will operate in niches where the and transparent products, which offer good wider market lacks capacity or capability. value in the short, medium and long term. Supplemented by the Society’s online capability, Our aspiration is for the Newbury brand to be members will enjoy the real advantages of a instantly recognisable in our branch towns ‘bricks and clicks’ service. and synonymous with what differentiates the Society from banks: being a mutual, member Mortgage lending has consistently been centric, with relevant attractive products and an over-supplied market, which inevitably exceptional customer service. means competition is fierce. This can only be a good thing for members and it will remain Notwithstanding the uncertainty that exists for our intention to offer fair-priced savings and the country at the time of writing, the Board mortgage products, to lend responsibly and believes that a successful future lies ahead for to support borrowers to achieve their housing the Society as an independent, branch-based, aspirations. Whilst we will remain vigilant technologically-enabled and vibrant mutually- for any opportunities that may arise as a owned business. consequence of the anticipated difficult trading Roland Gardner, Chief Executive conditions, we believe that the next 12 months 21 December 2020

2020 Members’ Review - Newbury Building Society 9 PURPOSE STATEMENT

10 2019 Members’ Review - Newbury Building Society 10 2020 Members’ Review - Newbury Building Society Community support in 2020

Jane Bosher, senior branch manager, presented Hungerford branch’s The Society’s Basingstoke branch celebrated its 10th birthday at the beginning of partner charity, Priors Court Foundation, with a cheque for more October 2020 in a socially distanced manner. than £1,700 following successful fundraising events.

The Society won the Customer Commitment Award at the The Society donated a combined total of £30,000 to support its charity partners and help Institute of Customer Service’s prestigious UK Customer bridge gaps in funding caused by the cancellation of key fundraising events due to Covid-19 Satisfaction Awards. restrictions.

The Society was named Medium Employer of the The Society celebrated local unsung heroes at its first Abingdon branch manager, Julie Harris, Year at the West Berkshire Training Consortium’s Community Champion Awards in February 2020. Lynne and Head of Customer Service, Melanie (WBTC) Rising Star Awards 2020. Taylor, a volunteer at children’s charity Dingley’s Promise, Mildenhall, visited Helen & Douglas House was crowned overall Community Champion with three with a cheque for more than £5,000. other volunteers being recognised as highly commended.

Wokingham branch manager, Deborah Gadd, Newbury Building Society launched its first Winter Senior branch manager, Cliff Osborne, visited presented partner charity, Sue Ryder, with a Wrap-Up campaign in winter 2019/2020, which Friends of PICU at Southampton University cheque for more than £3,000 following a range of encouraged the local community to donate winter Hospital to present a cheque for more than fundraising activities during 2019. clothing to help keep vulnerable people and the £1,500 following fundraising efforts by homeless warm during the colder months. Winchester branch employees and members.

2020 Members’ Review - Newbury Building Society 11 Summary Financial Statement

This Financial Statement is a summary of the information in the Audited Annual Accounts, the Directors’ Report and Annual Business Statement, all of which will be available to members and depositors free of charge on demand from all Newbury Building Society offices from 1 February 2021 or can be downloaded from www.newbury.co.uk from 4 January 2021.

Summary Directors’ Report

Key Performance Indicators 2020 2019

Assets £1.23bn £1.19bn Balance sheet Loans to Customers £1.02bn £0.96bn Retail Shares and Deposits £1.04bn £0.98bn

Management Expenses as a % of Mean Total Assets 0.93 0.92

Operating Interest Margin as a % of Mean Total Assets 1.43 1.50 performance Mortgage Arrears - on accounts two months or £0.17m £0.23m more in arrears Profit After Tax £3.2m £4.4m

Regulatory Capital £83.4m £80.1m Financial strength Total Capital Ratio 19.4% 20.0% Liquid Assets as a % of Shares and Borrowings 17.5% 19.7%

Members - numbers 72,275 71,161 Members Mystery Shopping - % score achieved 92% 97% Complaints - as a % of members 0.07% 0.16%

As a mutual, the Society has no shareholders by similar amounts across the year and not and does not need to maximise profits. fully mitigating the impact of reduced income The Society’s objective is to balance the from the Society’s liquidity. requirements to offer attractive rates for savers With the central bank rate expected to remain and competitive rates for borrowers, whilst at or near this level in the medium term the ensuring sufficient profits are generated to Board anticipates margin will continue to come both maintain the Society’s strong capital under pressure and its future plans take this position and to continue to enable investment in into account. the Society’s capability and infrastructure. Other income and charges Net interest margin Other income and charges comprise fees and The Society’s interest margin reduced during charges not accounted for within the effective the year falling by 0.07% to 1.43% principally interest rate (EIR) methodology and bank due to the impact of the reduction in Bank rate charges. Also included within this heading from 0.75% at the start of the year to its current are fair value losses on derivative financial level of 0.1%. The Board seeks at all times to instruments of £160k (2019: fair value losses of take a balanced view of the needs of borrowing £512k). and savings members with average rates earned on mortgages and paid to savers falling

12 2020 Members’ Review - Newbury Building Society Derivatives are used solely for risk management Society’s core banking platform, offset by purposes and are an important tool for reductions due to assets reaching end of life. managing exposure to changes in interest Following the completion of activities and rates from the Society’s portfolio of fixed rate expenditure on the Society’s new head office mortgages and savings products. The Society’s premises the Board expects depreciation derivatives are all in economic hedges with charges to increase significantly. the majority in qualifying hedge accounting The increase in total operating costs was relationships. proportionate to the Society’s growth in assets Management expenses representing 0.93% of mean total assets (2019: Management expenses comprise of staff costs 0.92%). together with all other costs and overheads Impairment charges necessary for the Society to function. Together The Society maintains an appropriate with depreciation and amortisation they provisioning policy designed to protect against comprise the total operating costs for the difficulties in the housing market and makes Society. provision for any estimated losses resulting The Board fully recognises that controlling from loans that are impaired on either an costs is vital for the Society’s competitive individual or a collective basis. At 31 October position in the marketplace and our 2020 the Society held provisions totalling Management Expenses (ME) ratio continues to £1,977k (2019: £1,225k). The measures taken benchmark well against peer group societies. in line with the government and regulator on Cost control continues to form a key part of payment holidays and furlough has reduced the Society’s strategy, striking an appropriate the losses and arrears during 2020 however, balance between investment in the business the provisions charge of £752k includes a and providing high quality and value products management overlay charge of £415k to and services for members. The Society did not provide, as far as reasonably possible, for utilise the Government Job Retention Scheme the uncertainties caused by Covid-19. This for two reasons: firstly, due to our status as includes higher levels of forbearance and keyworkers we were never required to close; uncertainty in house prices, which are widely and secondly, we took the view that it would predicted to fall in the short term, a situation not be ethical to take advantage of a taxpayer which would be compounded by significantly funded bail-out when not required to close. rising unemployment which can be expected to Management expenses increased by £688k impact on mortgage affordability. (6.5%) during the year. Administrative expenses Covid-19 increased by over £0.7m for two principal Since March 2020 the Society has been reasons: Staff costs were £0.5m higher in 2020 assisting and supporting its members due to an increase in headcount to match the financially by Covid-19. This included offering continued growth of the Society and non- payment deferrals to borrowers experiencing or capital expenditure of £0.3m on the fit-out and reasonably expecting to experience payment completion of the Society’s new head-office difficulties because of Covid-19, unless it premises. Offsetting these increases were was considered by the Society that another reductions in expenditure across a number of option was in the borrower’s best interest. The areas as the Society was unable to undertake Society has put in place a series of measures to certain activities for part of the year due to the support such members, initially assisting more enforced national lockdown due to the Covid-19 than 1,000 borrowing members requesting pandemic. a payment deferral. At the end of the initial Depreciation and amortisation for the year arrangement a small number of borrowers reflects an increase in annual charges for continued to require support. See Mortgage updated licence costs associated with the Arrears below.

2020 Members’ Review - Newbury Building Society 13 Arrears management forbearance arrangements. Mortgage Arrears At 31 October 2020 the Society had two The value of arrears for cases more than two properties in possession (2019: two). months in arrears decreased from £0.23m to Taxation £0.17m with the number of borrowers in this The Society’s corporation tax charge for the category increasing from 41 to 47 accounts. year ended 31 October 2020 of £842k (2019: There were nine cases in serious arrears of charge of £1,068k) represents an effective rate 12 months or more at our year-end (2019: six of 20.7% (2019: 19.5%). cases). The total amount of arrears outstanding on these accounts was £37k (2019: £130k) and Profit the aggregate balances were £474k (2019: The Society’s profit after tax as a percentage £475k). of mean total assets reduced from 0.38% in 2019 to 0.27% in 2020, as profits reduced from The Society’s arrears and possession statistics £4.4m to £3.2m. Despite reporting a lower level remain low both for the building society sector of profitability, it remains at an appropriate and for the industry as a whole. The low arrears level to support continued lending growth level is reflective of the macro-economic and the Society’s ongoing need to maintain environment, with ongoing low mortgage its capital strength to support the continued rates assisting customers with their repayment growth in the business together with capital obligations and government support schemes demands associated with increased regulatory such as furlough helping to keep unemployment requirements and continued investment. down. However, the position also reflects the Society’s low risk business model and prudent Assets underwriting approach. The Society always Total assets increased by 3.8% (2019: 6.5%) seek to ensure that customers can afford to and at 31 October 2020 stood at £1,233.7m, meet their mortgage repayments from the reflecting the Society’s strategic objective of outset and throughout the full duration of their focusing on sustained growth to protect itself mortgage term. It is this approach that has against rising costs and the effects of margin ensured arrears levels have remained below compression caused by increasing competition industry average and although the numbers and an expected rise in long-term funding are generally up on last year, the statistics costs. still show a proportionately low number of Liquid assets cases, which demonstrates the effectiveness Liquid assets comprise cash and other of good quality counselling and the quality of qualifying assets as shown on the statement underwriting processes over many years. of financial position. The Society maintains a The Society also incurred no mortgage prudent level of liquid assets of appropriate losses during the year (2019: nil). The Society quality, to meet its financial obligations as they shows forbearance to borrowers where fall due, under normal and stressed conditions. appropriate. Types of forbearance include At 31 October 2020 total liquid assets arrangements such as temporary interest amounted to £199.6m (2019: £217.2m), with only concessions, payment plans or reduced £182m of this balance represented by amounts payment concessions, including members held in the form of deposits with the Bank of still subject to Covid-19 related payment England (2019: £189m). As a percentage of deferral arrangements referred to above. At shares and borrowings liquid assets decreased 31 October 2020 the Society had 114 cases to 17.5% (2019: 19.7%) however, the decrease subject to forbearance (2019: 52) with total was in line with Board expectations and outstanding capital balances of £17.8m (2019: remained within the Society’s normal operating £5.6m). The increase can be almost entirely tolerances and above the Board’s liquidity risk attributed to the Covid-19 situation. The ending appetite. of government support schemes increases the risk of borrowers falling into arrears or requiring

14 2020 Members’ Review - Newbury Building Society A key measure of liquidity introduced under the year taking the Society’s total shares and CRD is the Liquidity Coverage Ratio (LCR). deposits balances to £1,042.1m at 31 October As at 31 October 2020 the Society reported 2020. The net funding inflow was sufficient to an LCR of 263% (2019: 327%), significantly in support the Society’s growth in mortgages. excess of minimum regulatory requirements. Following the bank rate reductions in March Mortgages 2020 the Society responded with reductions The Society’s portfolio of loans and advances to the interest rates offered on its savings comprise almost entirely of owner-occupied products, balanced alongside decisions mortgages, including affordable housing impacting borrowing members and the mortgages and buy-to-let mortgages. Gross Society’s overall liquidity requirements and lending of £181m did not match the £201m overall funding costs. After these reductions achieved in the year to October 2019. This the majority of the Society’s accounts continue brought to a halt five years of successive to pay rates of interest that benchmark increases in gross lending as the year to favourably against the wider market and it remains an important objective of the Society to 31 October 2020 was heavily interrupted and protect as far as possible the Society’s savings impacted by Covid-19 in the spring as the members from the full impact of the low interest house-buying market was essentially closed rate environment. It was therefore encouraging and unable to function for a period during to see the continued popularity of the Society’s national lockdown. Senior Saver and Treasure Plus accounts which In mitigation a continued focus on retention collectively attracted inflows of almost £40m activities helped the Society report net lending and a further £20m net inflow into the Society’s of £55m (2019: £65m) and was enough for the range of ISA products. Society’s total mortgage book to exceed £1 The Society expects to grow its stock of billion for the first time in its history. Stated shares and deposit funding to fund planned after the impact of mortgage repayments, mortgage growth over the medium term and voluntary redemptions and other movements, in preparation for the planned and gradual loans and advances to customers net of repayment of amounts borrowed from the Bank provisions and other interest rate and fair value of England (see Funding below). adjustments totalled £1,016.0m (2019: £960.5m). Strong demand for the Society’s range of Funding standard residential owner-occupied products It is critical that the Society maintains access and affordable housing products accounted for to funding from non-retail sources. The Society 88% of gross lending and 98% of net lending. remains an active participant in the Bank of The Society’s book remains very high quality England’s Sterling Monetary Framework (SMF) with an average indexed loan to value of 32% and during the 2017/18 financial year, alongside (2019: 33%) with less than 2.1% (2019: 2.9%) many other financial institutions, participated of the balances in the book more than 80% in the Bank of England’s Term Funding Scheme. of the current indexed value of the properties At 31 October 2020 amounts borrowed under on which their mortgages are secured. The this Scheme amounted to £96.4m (2019: £114m) Society’s lending continues to be focused on its with amounts repayable no later than four core operating areas with 75% of the mortgage years from the date of drawdown. On 11 March assets within the South East and Greater 2020 the Bank of England launched the Term London geographical areas (2019: 76%). Funding Scheme with additional incentives for SMEs (TFSME), providing four-year funding – Shares and deposits subject to meeting certain criteria – at interest Retail savings and deposits continue to be the rates at or very close to Bank rate. As an SMF cornerstone of the Society’s funding, although participant the Society is eligible to participate it is important for the Society to have access to in this Scheme and has made application to funding from other sources. Retail savings and draw down sufficient amounts to refinance deposit balances increased by £66.1m during

2020 Members’ Review - Newbury Building Society 15 existing TFS borrowings and support lending The Society’s leverage ratio - the ratio between activities in the 2020/21 financial year. Tier 1 capital and total on and off-balance The Society also accesses funding from other sheet exposures - remained stable at 6.6% at 31 financial institutions and local authorities with October 2020 (2019: 6.6%). typical repayment profiles of up to one year. Risk management framework As at 31 October 2020 the Society had £5.0m The Society operates in a business environment of unsecured borrowings from a range of other that contains a wide range of financial and counterparties (2019: £13.7m). non-financial risks which are managed under Capital the Risk Management Framework (RMF). The Capital consists of the Society’s reserves plus RMF documents the Society’s formal structure collective provision balances, less intangible for managing risk and the Board’s risk appetite. asset balances which are required by capital The Board is ultimately responsible for the regulations to be deducted from capital. The effective management of risk. The RMF, minimum level of capital required to be held risk appetite and principal risk policies is set by the Prudential Regulation Authority are approved by the Board following a (PRA). The Board is conscious that both review and recommendation by the Risk members and the Regulator require the Society Committee. The Board delegates oversight to be financially secure. Financial strength of the implementation of the RMF to the Risk protects the Society against its principal risks Committee. The Chief Risk Officer, who is an and uncertainties and safeguards member Executive Director on the Board, oversees the funds. Given the continuing emphasis on high effective implementation of the RMF, including quality capital by world banking authorities, the review of risks and uncertainties in the the Board sets a strategy to ensure that capital business. is maintained at an appropriate level to cater not only for its day to day business needs but The Society adopts a three lines of defence also for significant stresses in the marketplace. model which ensures a clear separation between the ownership and management of After regulatory deductions, the Society’s risk and controls (first line), oversight, support regulatory capital stood at £83.4m at 31 and challenge (second line) and internal audit October 2020 (2019: £80.1m). assurance (third line). 2020 2019 Risk governance arrangements Capital: £000s £000s The Board approves the policies which set out how the principal risks are managed. The Board Tier 1 Capital (after 81,824 79,070 committees - Audit, Risk, Remuneration and regulatory deductions) Nomination - terms of reference detail which Tier 2 Capital 1,540 1,037 policies are reviewed before recommendation Capital Resources 83,364 80,107 to the Board for approval. The key policies relating to credit risk, liquidity risk and financial The increase of £3.3m comprised of retained risk management are reviewed and approved earnings for the year offset by an increased by the Board at least annually. deduction for intangible assets. Risk culture A measure of capital strength commonly The risk culture is normal behaviour exhibited reported amongst financial institutions is the by all employees regarding risk awareness, Common Equity Tier 1 (CET1) ratio. This ratio risk taking, risk management and treating signifies the relationship between our strongest customers fairly. The Board sets the tone from form of capital (accumulated profits held in the top with Risk Owners and Risk Champions reserves) against assets, weighted by the implementing this tone throughout the level of risk they are considered to carry. The Society. The overall tone set by the Board is Society’s CET1 ratio decreased from 19.8% at underpinned by various policies and these 31 October 2019 to 19.1% at 31 October 2020.

16 2020 Members’ Review - Newbury Building Society policies enable Risk Champions, and their the risk appetite. Lending is done on prudent teams, to disseminate the Society’s culture and terms, is maintained within carefully controlled values across all areas of the business. The Risk limits and is subject to regular Credit Committee team conduct an annual risk culture assessment and Board reviews. Whilst the policy allows which is reviewed by the Risk Committee. lending in a limited number of niche areas which may be considered to have a greater degree of Principal Risks and Uncertainties risk, this is mitigated by the fact that these are The principal risks to which the Society is areas where the Society either has significant exposed, along with how they are controlled and experience or has set non-material limits and the associated policies, are set out below and each application is carefully underwritten by an remain unchanged from last year. experienced team.

The Society has a cautious risk appetite across Counterparty credit risk is controlled through all its principal risks. The Risk Committee reviews adherence to the Board-approved Treasury both the key risk indicators for each principal Policy and the risk appetite. It is regularly risk and the output from a range of stress tests reviewed by the Assets & Liabilities Committee to ensure that risk levels remain within the with oversight by the Risk Committee. The Policy Society’s agreed risk appetite. defines prudent limits, relating to quality and Strategic risk quantity, on credit exposures to individual and Strategic risk is the risks resulting from the groups of counterparties. Society’s strategic decisions which have the The counterparty limits are developed potential to reduce the Society’s profit levels and predominantly by reference to credit contribution to capital, thereby threatening the ratings and other market data and any new financial strength of the Society. counterparties are approved by the Assets & In particular it is the risk on the Society’s Liabilities Committee in accordance with the business model and strategic objectives as a Treasury Policy. result of macroeconomic, regulatory, political or Liquidity risk other factors. Liquidity risk is the risk of the Society failing The Board will not seek out strategic options to meet its financial obligations as they fall which have a potential to create losses to due, resulting in the inability to support normal capital, although will consider options that business activity and failure to meet regulatory could result in reduced profit in the short to liquidity requirements. This includes the funding medium term provided that the capital ratio risk of not being able to find new funding to remains within appetite. replace outflows or maturing facilities.

Strategic issues are regularly discussed at The Liquidity Policy is contained within the Board meetings and the Board provides robust Treasury Policy, which is reviewed by the Assets challenge of the corporate plan. The Society & Liabilities Committee and approved by the maintains strong levels of capital and liquidity Board. Liquidity is maintained within the Board- which provide financial resilience in periods approved risk appetite limits. of stress. This is assessed through regular Regular stress tests are conducted which help stress testing of both capital and liquidity. Key to determine the level of liquidity required to Risk Indicators are monitored and assessed withstand all reasonably foreseeable liquidity regularly. stresses. The Society also has a contingency Credit risk funding plan in place to manage sudden or Credit risk is the risk that mortgage loan extreme outflows. The results of stress testing customers or treasury counterparties default and the liquidity position are reported to the on their obligation to repay the Society. Assets & Liabilities Committee and the Risk Committee. Mortgage credit risk is controlled in accordance with the Board-approved lending policy and 2020 Members’ Review - Newbury Building Society 17 Market risk A range of metrics and risk limits are used to Market risk includes interest rate risk and basis monitor the Society’s ability to recover from an risk. Interest rate risk is the risk of mismatches operational risk event in line with the defined between the dates on which interest receivable risk tolerances for key business services. on assets and interest payable on liabilities are The Board is aware of significant operational reset to market rates, impacting on profitability issues, particularly relating to systems, which and the value of the Society’s assets and have occurred in banks. The security and liabilities. Basis risk is the risk that assets robustness of systems have been a key focus in and liabilities re-price on a different basis as recent years, with ongoing developments to the interest rates change. Business Continuity Plan, including upgrading Market risk is controlled by setting Board- of disaster recovery facilities and network approved limits to control non-administered security including penetration testing. business (e.g. fixed rate) therefore ensuring The Executive Committee and Risk Committee most assets are on an administered interest receive management information relating rate. To mitigate the risks associated with non- to operational risk and resilience. The Audit administered assets, hedging contracts are Committee is responsible for assessing the used in accordance with the Board-approved effectiveness of the system of inspection and Treasury Policy. Market risk is regularly control. reviewed by the Assets & Liabilities Committee. A detailed analysis of the Society’s interest rate Legal and Regulatory risk position at 31 October 2020 can be found in Legal and Regulatory risk is the risk of fines, note 25 on page 73. public censure, limitations on business or restitution costs arising from failing to Operational risk understand, interpret, implement and comply Operational risk is the risk of loss arising with legal and regulatory requirements. from inadequate or failed internal processes or systems, human error or external events. Legal and Regulatory change is closely Therefore, operational risks can arise from all monitored and reported to the Executive of the Society’s activities, across all business Committee and Board. areas. Conduct risk The Society has robust processes and controls Conduct Risk is the risk of developing systems, in place for all operational areas, which are behaviour and attitudes within the Society designed to mitigate this risk and the Society which do not deliver fair customer outcomes or uses software to help manage the risk by which create an environment which does not providing a single source of data for risk events, result in staff being open, honest and doing actions, horizon scanning and controls testing. the right thing. This can result in the risk of Whilst effective operational risk management reputational loss. will help to mitigate the likelihood and impact of The Society is committed to treating customers operational risk, it is not possible to eradicate fairly and this is underpinned by the Society’s the risk. To ensure operational resilience, the Conduct Risk Framework, which is regularly Society protects against disruption resulting reviewed by the Customer Committee and Risk from operational risk events (such as cyber Committee. The Customer Committee monitors or data loss) by having controls in place to conduct risk at an operational level, with reduce risk exposures (prevention), having oversight provided by the Risk Committee. clear tolerances on what can be absorbed and having actions in place to respond beyond Covid-19 Impact these points (response), and having clear plans Covid-19 has had a significant impact on the and arrangements in place to respond to and economy, with falling levels of GDP and rising recover from incidents and to learn and adapt unemployment, which is likely to increase from operational disruption (recovery). further as Government schemes end in 2021. The lockdowns have also resulted in a greater

18 2020 Members’ Review - Newbury Building Society use of technology and an increase in the strengthening and ensuring the scope of associated cyber risks. These factors have second-line assurance work includes the meant that the profile of the Society’s principal changes. risks could have been affected as follows: • To ensure the potential financial • Strategic: Covid-19 has impacted how implications of Covid-19 are fully some customers choose to interact with understood, the Society has undertaken their financial service providers which may rigorous stress-testing of the potential accelerate the move away from branch outcomes, the results of which show transactions to more online requirements. that it has sufficient capital resources Whilst at this point it is too early to to withstand a range of severe stress tell how much of this change will be scenarios. The Corporate plan has also permanent, the Society is continuing with been reviewed and the strategic objectives its programme of digital development to take account of the expected difficult ensure its members can choose how they market conditions in 2021. would like to interact with the Society. Other risks • Credit: The impact on the economy, In addition to these, there are other material particularly unemployment, has been risks that the Society faces: felt by the Society through the level Brexit of payment deferrals that have been While the end of the Brexit transition period will granted to mortgage members during the have a limited direct impact on the Society, it year. Whilst no material mortgage losses is likely to add to the economic difficulties at a have occurred to date, it is likely that time when the Covid-19 impact is still building. higher arrears and losses will occur over This could therefore exacerbate the effect coming months. The Society’s year-end on the economy and the housing market as provisioning and corporate plan have well as the Society’s members’ ability to pay allowed for additional losses. their mortgages. The impact of this has been • Market Risk: The reduction of the Bank considered in the stress tests mentioned above. of England base rate to 0.1% reduced the Climate change level of return on the Society’s liquid assets The Society also recognises the risks and as well as increasing the amount paid on challenges posed by climate change. While swaps. Whilst these factors reduced the the financial risks from climate change may Society’s net interest income for the year, only crystallise in full over longer time horizons, this has been partly compensated for by a they are becoming apparent now. The Society better than expected level of gap between particularly recognises two risks: physical and the cost of funding and the return from transitional. Physical risks relate to specific mortgages. weather events such as flooding, or longer- • Operational: The requirement for a term events such as rising sea levels. A key significant increase in home-working, the element of this risk is to property, both the introduction of Covid-friendly working Society’s own properties and properties held practices for the Society’s branches as security for lending. Transition risks can and head office, the increase in cyber arise from the process of adjustment towards challenges, the slower delivery of third a low-carbon economy. This could lead to a party services and the impact of increased changing regulatory expectation in terms of customer support, have resulted in the way the Society is expected to run its own a degree of change to the Society’s business, including who it uses as suppliers. It operational practices. In order to address may also impact property held as security, for the potential risk that has arisen from example the energy efficiency expectations these changes, additional controls have of mortgaged properties. The Society is been introduced which include system increasingly mindful of these risks when

2020 Members’ Review - Newbury Building Society 19 making business decisions, including mortgage number of creditor days at 31 October 2020 was underwriting ones. The Operations and Sales 7 (2019: 0). Director has responsibility for monitoring climate Events since the Year-End change risk at an operational level, with oversight The Directors do not consider that any event since provided by the Risk Committee. the year-end has had a material effect on the Directors financial position of the Society as disclosed in The following served as Directors of the Society the Annual Accounts. during the year: Auditor The Directors who held office at the date of Non-Executive Executive Directors approval of this Directors’ report confirm that: Directors • So far as they are each aware, there is no Peter Brickley Roland Gardner relevant audit information of which the Chris Brown Lee Bambridge Society’s auditor is unaware; and Sarah Hordern Kieron Blackburn • Each Director has taken all the steps that (resigned 28/01/2020) should be taken by a director in order to be aware of any relevant audit information William Roberts Phillippa Cardno and to establish that the Society’s auditor is Zoe Shaw Darren Garner aware of that information. (appointed 03/08/2020) The Board is recommending that Deloitte LLP is Ron Simms Richard Jones (from reappointed as external auditors of the Society (retired 24/02/2020) 24/02/2020 to for the financial year ending 31 October 2021. A 07/08/2020) resolution for their appointment will be proposed Alistair Welham at the forthcoming Annual General Meeting of the (appointed Society. 24/02/2020) Political Donations and Gifts Piers Williamson The Society has not made any political gifts or donations in the year to 31 October 2020 (2019: Biographies of the Directors appear on pages 26 £nil). and 27. Going Concern None of the Directors had any beneficial interest The Directors are required to consider whether in any connected undertaking of the Society at the Society will continue as a going concern for any time during the year and at the year-end. a period of 12 months from the signing of the The Society maintains liability insurance cover accounts. In making the assessment the Directors for Directors and Officers as permitted by the have reviewed the Society’s corporate plan Building Societies Act 1986. There are no Directors’ and considered risks that could impact on the indemnities. Society’s capital position, financial position and In accordance with the requirements of the 2018 liquidity over that period. update to the Corporate Governance code, to The Directors have also prepared forecasts to which the Society has due regard, all the Society’s consider the effect on the Society’s business, Directors are seeking re-election to the Board at financial position, capital and liquidity of the Annual General Meeting with the exception operating under stressed, but plausible, operating of Darren Garner and Alistair Welham who are conditions. A range of sensitivities has also standing for election, having both been appointed been applied to these forecasts, including stress to the Board since the last AGM vote took place. scenarios relating to Covid-19. Creditor Payment Policy The Covid-19 assessment, which focused on It is the Society’s policy to pay suppliers within the Society’s capital and liquidity position and agreed terms providing the supplier performs operational resilience, included the following according to the terms of the contract. The actions:

20 2020 Members’ Review - Newbury Building Society • The Society’s capital position was assessed members and poses a number of risks to the against the ICAAP stress scenarios, Society including: increasing pressure on incorporating Covid-19 economic forecasts. margins; increasing cost to deliver the level and The assessment included reverse stress type of investment necessary to keep pace with testing scenarios to consider which technological developments; and increased risk combinations of house price inflation and management costs. A competitive market for unemployment variables would consume savings and mortgages is good for members regulatory capital in full and breach the and it remains our intention to offer fair priced Society’s regulatory capital requirements. savings and mortgage products, to lend The Directors assessed the likelihood of responsibly and to support borrowers to achieve those scenarios occurring within the next 12 their housing aspirations. Whilst technological months was remote. development is an ongoing focus, the Board • The Society’s liquidity position was assessed remains fully committed to the branch network, against the ILAAP stress scenarios, reviewed promoting a savings culture using fair and for suitability in the context of Covid-19. transparent products, which offer good value in the short, medium and long term. • Operational resilience was assessed, including the ability to achieve social Business performance distancing in the Society’s principal office The uncertain conditions for 2020/21 can be and branches, and to continue to support expected to impact financial performance. The significant levels of home working. Society started the 2020/21 financial year with a healthy pipeline of mortgage offers but expects After considering all of this information, together a higher than usual percentage not to complete with available market information and the due to delays in the homebuying process and the Directors’ knowledge and experience of the expected removal of Stamp Duty incentives. Society and markets in which it operates, after making the necessary enquiries the Directors House price growth has slowed and is widely are satisfied that the Society has adequate predicted to fall in the short term, a situation resources to continue in business for at least which would be compounded by significantly the 12 month period from the signing of the rising unemployment which can be expected to accounts. Accordingly, and after consideration impact on mortgage affordability. As reported of the impact of Covid-19, it is appropriate for the earlier, the Society has already supported and accounts to continue to be prepared on a going continues to support a number of its borrowing concern basis. members seeking temporary mortgage forbearance in the form of mortgage payment Pillar 3 disclosures holidays as a direct result of Covid-19 however, The Society is required to set out its capital the full impact to the Society is uncertain and will position, risk exposures and risk assessment be determined by the extent of damage inflicted processes in its Pillar 3 disclosures document. on the UK economy. Whilst the Board is confident These are available on the Society’s website. in the quality of the Society’s lending, short term Future profitability could be impacted by increases The outlook for the UK economy remains highly in charges for impairment given the level of uncertain, impacted by the twin matters of the economic uncertainty. Covid-19 pandemic and Brexit. Both are covered There is an expectation that interest rates will in more detail on pages 18 and 19 of this booklet. increase from their present historic low, but Competition this is not widely expected to happen in the Provision of financial services is entering a new next financial year. Nonetheless funding costs era, driven by challenger banks and FinTech may still face upward pressure as the Society firms, as well as the rapidly accelerating digital competes for retail deposit balances. transformation within direct competitors and The Board considers the Society continues to Open Banking. Such developments increase be well positioned against even the hardest the risk of the Society failing to attract new

2020 Members’ Review - Newbury Building Society 21 economic downturn and able to navigate through The Board continues to believe that a successful this risk as it unfolds as the Society’s strong future lies ahead for the Society as an capital position and liquidity would allow the independent, branch-based, technologically Society to reduce activity and ‘ride out the storm’ enabled and vibrant mutually owned business. if this was felt to be appropriate. Peter Brickley Roland Gardner Chairman Chief Executive

21 December 2020

22 2020 Members’ Review - Newbury Building Society Summary Financial Statement 2020 2019 £000 £000 Society results for the year Net interest receivable 16,398 16,926 Other income and charges (154) (63) Net loss on derivatives (160) (512) Administrative expenses (11,263) (10,575) Impairment of loans and advances (752) (298) Profit for the financial year before taxation 4,069 5,478 Taxation (842) (1,068) Profit for the year 3,227 4,410

Group financial position at the end of year Assets Liquid assets 199,584 217,228 Derivative financial instruments 9 70 Loans and advances to customers 1,015,979 960,515 Fixed and other assets 18,110 10,083 1,233,682 1,187,896 Liabilities Shares 1,012,447 938,630 Borrowings 131,030 165,624 Derivative financial instruments 4,108 1,920 Other liabilities 3,321 2,278 Reserves 82,776 79,444 Total reserves and liabilities 1,233,682 1,187,896

Key financial ratios % %

Gross capital as a percentage of shares and borrowings (note 1) 7.24 7.19 Liquid assets as a percentage of shares and borrowings (note 2) 17.45 19.67 Profit for the year as a percentage of mean total assets (note 3) 0.27 0.38 Management expenses as a percentage of mean total assets (note 4) 0.93 0.92

Peter Brickley Roland Gardner Darren Garner Chairman Chief Executive Finance Director

21 December 2020

2020 Members’ Review - Newbury Building Society 23 Notes to the Summary Financial Statement

1. The gross capital ratio measures the 4. The ratio of management expenses to mean Society’s capital as a proportion of its total assets is one of a range of ratios, shares and borrowings. The Society’s widely used in the industry, to measure gross capital consists of general reserves administrative efficiency. and revaluation reserve which have been accumulated over many years. 5. An Audit Report is included in the Annual Report and Accounts. 2. The liquid assets ratio represents the total of cash, deposits and government securities held by the Society as a proportion of the Society’s shares and borrowings. Liquid assets are held by the Society for prudential purposes in order to meet investor withdrawals from their accounts, make mortgage advances to borrowers and to fund general business activities. 3. Profit for the year as a percentage of mean total assets represents the Society’s profit for the year (after tax) as a proportion of the average total assets held during the year.

24 2020 Members’ Review - Newbury Building Society Independent auditor’s statement to the members and depositors of Newbury Building Society

We have examined the Summary Financial Opinion on Summary Financial Statement Statement of Newbury Building Society for the In our opinion, the Summary Financial Statement year ended 31 October 2020 which comprises is consistent with the full financial statements, the summary Income Statement and Statement the Annual Business Statement and the Directors’ of Financial Position together with the summary Report of Newbury Building Society for the year Directors’ Report. ended 31 October 2020 and complies with the Respective responsibilities of directors and applicable requirements of Section 76 of the auditor Building Societies Act 1986 and regulations made The directors are responsible for preparing the thereunder. Summary Financial Statement, in accordance Use of our report with applicable United Kingdom law. This report is made solely to the Society’s Our responsibility is to report to you our opinion members, as a body, in accordance with Section on the consistency of the Summary Financial 76(5) of the Building Societies Act 1986. Our work Statement within the Business Review with the full has been undertaken so that we might state financial statements, Annual Business Statement to the Society’s members those matters we are and Directors’ Report and its conformity with required to state to them in an auditor’s report the relevant requirements of Section 76 of the and for no other purpose. To the fullest extent Building Societies Act 1986 and regulations made permitted by law, we do not accept or assume under it. responsibility to anyone other than the Society We also read the other information contained and the Society’s members as a body, for our in the Business Review and consider the audit work, for this report, for our audit report, or implications for our report if we become aware for the opinions we have formed. of any apparent misstatements or material inconsistencies with the Summary Financial Statement. Deloitte LLP Basis of opinion Statutory Auditor Our examination involved agreeing the balances Birmingham, United Kingdom in the Summary Financial Statement to the full 21 December 2020 financial statements, Annual Business Statement and Directors’ Report. Our report on the Society’s full financial statements describes the basis of our audit opinion on those full financial statements.

2020 Members’ Review - Newbury Building Society 25 Non-Executive Directors

Peter Brickley Sarah Hordern William Roberts Zoe Shaw Chairman of the Board Non-Executive Director Non-Executive Director Non-Executive Director Peter was appointed to the Sarah was appointed to the William was appointed to the Zoe was appointed to the Board of Directors in July 2008 Board of Directors in February Board of Directors in February Board of Directors in September and was elected Chairman 2015. She is a Chartered 2015. He is a Chartered 2017. She has been General in February 2015. He is the Accountant and former Joint Accountant and is Finance Manager at a German bank, Chief Information Officer for Managing Director of Newbury Director for Hastoe Housing CEO of a credit fund and Head a European beverage business Racecourse. She is currently Association. William has more of Fixed Income at a leading and is a Trustee of the Brain CFO and Development Director than 20 years’ experience UK pension fund manager. She and Spine Foundation. Peter at Modulous Ltd and a Non in the property sector and has extensive experience of the is Chair of the Nomination Executive Director at Oxford 15 years’ experience in the UK property market. Zoe is a Committee and a member of the University Hospitals NHS Housing Association sector. member of the Risk Committee Remuneration Committee. Foundation Trust. Sarah is Chair William is Chair of the Audit and attends and advises the of the Remuneration Committee Committee and a member of the Executive-led Assets & Liabilities and a member of the Nomination Nomination Committee. Committee. and Audit Committees.

Alistair Welham Piers Williamson Chris Brown Non-Executive Director Non-Executive Director Non-Executive Director Alistair has more than 25 years’ experience Piers was appointed to the Board of Chris was appointed to the Board of in marketing and digital communications Directors in January 2018. He has Directors in June 2019. She is the Group having specialised in financial services, more than 30 years’ financial markets IT Director of Manpower UK. She has 16 real estate, car retailing industries, and experience specialising in treasury risk years experience of leading all aspects is an Executive member of the Financial management and is Chief Executive of technology and digital in commercial Services Forum and programme faculty of The Housing Finance Corporation, organisations, of which 11 have been member of Imperial College Business a mutual company that lends funds spent in financial services. Chris is School on digital transformation. Alistair to Housing Associations. Piers is Chair Chair of the Digital Advisory Panel and also holds positions with Aegon UK as of the Risk Committee and a member a member of the Audit Committee. Head of Marketing Communications and of the Remuneration and Nomination is a Trustee of the Brighton Student Union. Committees and attends and advises Alistair is a member of the Risk Committee the Executive-led Credit Committee. and the Digital Advisory Panel and attends and advises the Executive-led Sales, Marketing & Product Committee.

26 2020 Members’ Review - Newbury Building Society Executive Directors

Roland Gardner Lee Bambridge Phillippa Cardno Darren Garner Chief Executive Chief Risk Officer Operations & Sales Director Finance Director Roland joined the Society Lee joined the Society and Phillippa joined the Society Darren joined the Society in 1987 and was appointed the Board of Directors in in 1996 and was appointed and the Board of Directors to the Board of Directors in July 2007 after nearly two an Executive in 2007. She in August 2020. A qualified September 2006. He was decades in senior positions in was appointed to the Board accountant, he has worked in appointed Chief Executive the Aerospace industry. He is of Directors in February 2015 financial services for over 20 on 1 February 2007 and is a Chartered Accountant and as Operations and Sales years, almost half of which responsible for the Society’s a Corporate Treasurer. Lee Director and is responsible as a Finance Director in the strategic development, acted as the Society’s Finance for operational strategy and building society sector. Darren leading the Executive team, Director until February 2018, performance as well as the is responsible for the Society’s providing leadership and when he was appointed Chief Society’s IT function and finance and treasury activities, direction throughout all areas Risk Officer. Lee is responsible Lending Policy. As Executive ensuring the integrity of of the business and for setting for the Society’s Risk and Director responsible for IT and financial and regulatory and maintaining culture and Compliance functions. Business change, Phillippa reporting and managing the standards. leads the Society’s digital Society’s liquidity, funding development programme. and capital positions. He also holds executive responsibility for the premises and facilities Executives department.

Gorse Burrett Erika Neves Melanie Mildenhall Jim Bendon Head of HR & People Head of Risk & Company Head of Customer Service Head of IT & Business Change Development Secretary Melanie joined the Society Jim joined the Society and Gorse joined the Society Erika joined the Society in in 1994 as a graduate and the Executive team in January and the Executive team 1991 and was appointed an was appointed an Executive 2020. Jim is responsible for in October 2018. She is a Executive in 2002. Erika is a in January 2019. She is defining the Society’s IT and Chartered Fellow of CIPD graduate with the Certificate responsible for leading, Business change strategy and an Executive Coach. She and Diploma in Mortgage developing and implementing whilst also being accountable is responsible for leading, Advice and Practice. She is the Society’s Customer for all technology and developing and implementing Company Secretary, heads Service strategy. Melanie business change. Jim reports the Society’s HR and people the Risk function and reports also heads the Branch and to the Operations and Sales strategy. Gorse reports to the to the Chief Risk Officer. Customer Support functions Director. Chief Executive. and reports to the Operations and Sales Director.

2020 Members’ Review - Newbury Building Society 27 Directors’ Attendance Record

Board member Board Audit Risk Remuneration Nomination

Non-Executive

Peter Brickley 16 (16) 1 (1) A 1 (1) 3 (3) 5 (5)

Chris Brown 16 (16) 3 (3) 1 (1)

Sarah Hordern 16 (16) 3 (3) 1 (1) 3 (3) 5 (5)

William Roberts 15 (16) 4 (4) 1 (1) 3 (4)

Zoe Shaw 15 (16) 4 (4)

Ron Simms1 0 (3) 1 (1) 0 (1) 0 (1) 1 (2)

Alistair Welham2 12 (13) 3 (3)

Piers Williamson 16 (16) 1 (1) 4 (4) 3 (3) 4 (4)

Executive

Roland Gardner 16 (16) 3 (4) A 4 (4) A 3 (3) A 4 (5) A

Lee Bambridge 16 (16) 4 (4) A 4 (4) A 3 (3) A 5 (5) A

Kieron Blackburn3 3 (3) 1 (1) A 1 (1) A

Phillippa Cardno 16 (16) 4 (4) A 4 (4) A

Darren Garner4 2 (2) 1 (1) A 1 (1) A

Richard Jones5 11 (11) 2 (2) A 2 (2) A

( ) = number of meetings eligible to attend A attendee 1 Left Feb 2020 2 Appointed Feb 2020 3 Left Jan 2020 4 Appointed Aug 2020 5 Appointed Feb 2020 and left Aug 2020 Directors’ Remuneration Report This report explains how the Society applies were classified as Material Risk Takers (MRTs) the principles of the UK Corporate Governance and subject to the Remuneration Code. The Code April 2018 (the Code) relating to Remuneration Committee does not consider remuneration. It also explains how the Society’s that any employees who are not members of remuneration policy complies with relevant the Board or the Executive management team regulations including the Remuneration should be classified as MRTs. Part of the Prudential Regulation Authority’s The Level and Components of Remuneration Rulebook and the Financial Conduct Authority’s Remuneration Code for dual regulated firms Code Principle: (SYSC 19D). The Remuneration Committee has determined that, as at 31 October 2020, all P. Remuneration policies and practices should seven of the current Non-Executive Directors be designed to support strategy and promote and the four Executive Directors, as well as long term sustainable success. Executive four other members of senior management remuneration should be aligned to company reporting directly to the Executive Directors, purpose and values and be clearly linked to the

28 2020 Members’ Review - Newbury Building Society successful delivery of the company’s long-term Benefits strategy. The Society makes a contribution of up to 20.25% of salary (before salary sacrifice where The Society’s objective when setting applicable) to Executive Directors’ private remuneration is to ensure that it is in line with pension arrangements. the Society’s business strategy, risk appetite and long-term objectives, by being consistent Executive Directors receive other benefits with the interests of the Society’s members. comprising private healthcare (covers the Remuneration is set at a level to retain and Directors and their families), death in service attract individuals of the calibre necessary to and income protection insurance. The Society operate and meet the Society’s objectives. does not provide concessionary home loans to Directors. Executive Directors Emoluments The remuneration of the individual Directors is Executive Directors Contractual Terms detailed on page 31. The remuneration reflects Roland Gardner, Lee Bambridge, Phillippa the Directors’ specific responsibilities and Cardno and Darren Garner each have a service comprises basic salary, annual performance contract with the Society, terminable by either related pay and various benefits detailed party giving six to twelve months’ notice. The below. Society meets contractual obligations for loss of office. Whilst the Remuneration Committee Basic Salaries has discretion to provide better terms, this is Basic salaries are reviewed and benchmarked disclosed to Members if used. An Executive annually in line with comparable organisations Director is permitted to take a role as a Non- across location, industry and job function. Executive Director with another firm provided However, in light of Covid-19, there was no the firm is not a competitor and the associated formal salary review this year except for one time commitment can be accommodated. individual where market conditions determined Any such arrangements have to be agreed that an increase was appropriate. in advance by the Nomination Committee. Performance Related Pay Scheme There were no new arrangements of this nature The performance related pay scheme is based entered into during the year. on the Society’s key performance measures of Non-Executive Directors profitability, control of costs, risk management The level of fees payable to Non-Executive controls, growth in mortgages, increases in Directors is assessed using information from savings and project delivery (of the new head comparable organisations. Remuneration office). A maximum of 11.5% of salary (prior comprises a basic fee with supplementary to any salary sacrifice) can be earned for payments for the Chair of the Board and achievement of these targets together with a the other Non-Executive Directors classified maximum 3.5% of salary based on personal as Senior Managers to reflect the additional contribution. Performance related payments responsibilities of these positions. Fees for are not pensionable and are paid in cash Non-Executive Directors are not pensionable through payroll. and Non-Executive Directors do not participate The Remuneration Committee approved in any incentive schemes or receive any other a one-off payment of 2% of salary to all benefits. Non-Executive Directors have letters employees, including the Executive Directors in of appointment and these are available for recognition of the hard work and challenging inspection prior to the AGM or at the Society’s circumstances in which they had worked this registered address. year. This payment was not made to Non- Other Material Risk Takers Executive Directors. The Remuneration Committee is also As a mutual, the Society has no share option responsible for determining the terms and scheme, and none of the Directors has any conditions of other members of senior beneficial interest in, or any rights to subscribe management in consultation with the Chief for shares in or debentures of, any connected Executive. These are the Head of Customer undertaking of the Society. Service, the Head of Risk & Company Secretary, the Head of HR & People

2020 Members’ Review - Newbury Building Society 29 Development and the Head of IT & Business Non-Executive Directors: Change. These individuals are subject to the The fees payable to Non-Executive Directors are same variable pay performance targets and proposed by the Chief Executive, taking into rewards as the Executive Directors and they consideration the views of the other Executive also receive pension contributions from the Directors. The proposed fees are then approved Society of up to 15.25% of salary (prior to any or otherwise by the Remuneration Committee salary sacrifice). with the Chair’s fees being considered by the Committee in the absence of the Chair. During The Procedure for Determining the year the Chief Executive’s recommendations Remuneration regarding Non-Executive Director fees were Code Principle: accepted in full. Q. A formal and transparent procedure for Executive Directors developing policy on executive remuneration The performance related pay scheme is and determining director and senior designed to encourage the achievement of management remuneration should be key business objectives relating to a balance established. No director should be involved in of financial performance, customer service deciding their own remuneration and sustainable growth over a multi-year timeframe. In setting variable remuneration R. Directors should exercise independent targets the Committee considers the balance judgement and discretion when authorising between the fixed and variable components remuneration outcomes, taking account of of remuneration to ensure that the ratio is company and individual performance, and appropriately balanced and in line with the risk wider circumstances. profile of the Society. The Committee believes The remuneration of the Non-Executive that the performance related targets set for Directors, Executive Directors and other 2020 were suitably balanced and hence risk members of senior management is overseen by adjusted. the Remuneration Committee, which consists of The Remuneration Committee assesses whether three Non-Executive Directors and which meets any performance related payments should four times a year. During the reporting period be made taking into account reports, where the composition of the Committee satisfied the applicable, from the Risk and Compliance Code provisions regarding independence. The functions. Whilst it is not required to do so, Chief Executive, the Chief Risk Officer and the the Committee also defers a proportion of the Head of HR & People Development attend by performance related payment to Executive invitation but take no part in the discussion of Directors in order to discourage inappropriate their own salaries. Minutes of the Committee’s risk taking. This is not considered necessary meetings are distributed to all Board members. for the remaining members of the senior The Remuneration Committee reviews the management team given that they report to the Society’s Remuneration Policy annually Executive Directors. and maintains a list of the Society’s MRTs AGM Vote detailing the composition of their respective Whilst a binding vote on Remuneration Policy remuneration. In setting remuneration, the is not considered appropriate for a building Committee takes account of fees and salaries society of our size and nature, if more than payable and other benefits provided to Non- 25% of the turnout vote against the report, Executive Directors, Executive Directors and the Remuneration Committee will take steps other senior management of building societies to ascertain and address the concerns of the that are similar in size and complexity, and Membership. On behalf of the Committee, I other relevant organisations. Periodically, a recommend that you endorse our report. report may be commissioned from external consultants to assist in this process. The Sarah Hordern Committee did not use the services of an Chair of the Remuneration Committee external consultant during the reporting 21 December 2020 period. The Committee also ensures that variable remuneration does not undermine the objectivity of the risk and compliance functions.

30 2020 Members’ Review - Newbury Building Society Executive Directors’ Emoluments

Performance Related Pay Taxable Pension1 Salary £000 Benefits Contribution TOTAL 2020 £000 £ £000 £000 £000

Roland Gardner 241 26 6 - 273 Kieron Blackburn 179 - - 7 186 (resigned 28/01/20) Darren Garner 36 5 - 7 48 (appointed 03/08/20) Lee Bambridge2 147 16 6 - 169 Phillippa Cardno 139 19 5 29 192

TOTAL 742 66 17 43 868

2019 Roland Gardner 239 31 4 - 274

Kieron Blackburn 120 18 - 33 171 Lee Bambridge 147 19 4 - 170

Phillippa Cardno 131 21 3 27 182

TOTAL 637 89 11 60 797

Notes 1. The Executive Directors have the option to sacrifice part of their salary in exchange for the Society making additional pension contributions on their behalf. During the year Phillippa Cardno and Darren Garner took advantage of this option. Roland Gardner and Lee Bambridge, with agreement from the Society, took their pension contributions as salary. 2. Lee Bambridge also received £18,000 (2019: £18,000) from Sovereign Housing Association, for his services as a Non-Executive Director. 3. The interim Finance Director Richard Jones was paid £151,728 (including VAT) for his services from 3 February 2020 to 7 August 2020.

2020 Members’ Review - Newbury Building Society 31 Non-Executive Directors’ Emoluments (comprising fees only) 2020 2019 £000 £000

Peter Brickley (Chairman) 45 44 Alistair Welham (appointed 24/02/20) 19 - Sarah Hordern 30 28 Tracy Morshead (retired 21/02/19) - 9 William Roberts 30 28 Zoe Shaw 28 28 Ron Simms (retired 24/02/20) 11 33 Piers Williamson 30 28 Chris Brown (appointed 01/06/19) 28 12 TOTAL 221 210

Loans to Directors and connected persons: The aggregate outstanding balance at the end of the financial year in respect of loans from the Society to Directors and connected persons was £511,511 (2019: £314,831) representing loans to one (2019: one) person. There are no arrears or provisions relating to this loan. The terms and conditions are in line with standard mortgage lending and the loan is secured on residential property with the nature of any final settlement being on a cash basis. There are no guarantees given or received. A register of loans to and transactions with Directors and connected persons is maintained. It is available for inspection by members at the Society’s Head Office for the period of fifteen days prior to the Annual General Meeting and at the Annual General Meeting, subject to prior arrangement to ensure the request can be accommodated in a covid-safe manner. Lee Bambridge is a Non-Executive Director of Sovereign Housing Association. In June 2020 the Society completed on an arrangement to purchase an office building from Sovereign Housing Association. The transaction took place on an arms-length basis and Lee Bambridge had no involvement or influence in the Society’s decision making process.

32 2020 Members’ Review - Newbury Building Society Notice of the 164th Annual General Meeting Non-Executive Directors’ Emoluments Due to the ongoing situation with Covid-19 and to protect members, the Annual General (comprising fees only) 2020 2019 Meeting will be a closed meeting which means that members are unable to attend in person. £000 £000 Members are invited to join a livestream of the AGM, details of which are available on the Society’s website. Peter Brickley (Chairman) 45 44 Date: Thursday 25 February 2021 Alistair Welham (appointed 24/02/20) 19 - Time: 11:00am Sarah Hordern 30 28 Place: Newbury Building Society, 90 Bartholomew Street, Newbury RG14 5EE The meeting will commence at 11.00am on Thursday 25 February 2021 for the following purposes: Tracy Morshead (retired 21/02/19) - 9 1. To receive the Auditor’s Report, the Directors’ Report, Annual Accounts and Annual Business William Roberts 30 28 Statement for the year ended 31 October 2020. Zoe Shaw 28 28 2. To consider and if thought fit pass an Ordinary Resolution to re-appoint Deloitte LLP as the Society’s Auditor, to hold office until the conclusion of the next AGM at which accounts are laid Ron Simms (retired 24/02/20) 11 33 before the Society, and for its remuneration to be fixed by the Directors. Piers Williamson 30 28 3. To consider and if thought fit pass Ordinary Resolutions to re-elect Peter John Brickley, John Piers Williamson, Sarah Hordern, Christine Margaret Brown, Zoe Rosemary Leyland Shaw, Chris Brown (appointed 01/06/19) 28 12 William Jeremy Mostyn Roberts, Roland Martin Woodthorpe Gardner, Phillippa Cardno and Lee Frederick Bambridge and to elect Alistair Richard Norton Welham and Darren Lee Garner as TOTAL 221 210 Directors of the Board. 4. To consider and if thought fit pass an Ordinary Resolution to approve the Directors’ Remuneration Report for the year ended 31st October 2020 (see e below). 5. To consider and if thought fit pass a Special Resolution to approve the Rule Change (see summary opposite) 6. To transact any other business permitted by the Rules of the Society. Voting Conditions (forming part of the Notice of the Meeting): a. A Member may appoint the Chairman d. You may only vote once as a Member, of the meeting as their proxy. A Member irrespective of the number of accounts may instruct their proxy how to vote at you hold, whether you hold accounts the meeting by following the instructions in different capacities and whether you on the Proxy Voting form. qualify to vote as both a shareholding and borrowing Member. b. To qualify as a voting shareholding Member, you must be an individual of e. Resolution 4 in this Notice of Meeting at least 18 years of age on 25 February relates to a resolution for Members to 2021; have held at least £100 in any vote on the Directors’ Remuneration Society share account on 31 October Report for 2020 set out on pages 28 to 2020; continue to hold shares at all 32 of this booklet. As a building society, times up to and including the voting we are not obliged to ask Members to date; and be first named on the account vote on this, but in accordance with best in the records of the Society. practice we are asking for an advisory vote and the Board will consider the c. To qualify as a voting borrowing result and decide what action if any is Member, you must be an individual of appropriate. at least 18 years of age on 25 February 2021; have held a mortgage with the f. The deadline for postal or online votes is Society to the value of at least £100 on 3pm on 23 February 2021 31 October 2020; hold a mortgage with the Society to the value of at least £100 on the voting date; and be first named on the account in the records of the By Order of the Board Society. Erika Neves – Society Secretary 23 January 2021

Notes: The Board considers that all directors continue to have the required skills, knowledge and experience and demonstrate the necessary commitment to their roles. Biographical details of the Directors standing for election or re-election are included on pages 26 and 27 of this booklet.

2020 Members’ Review - Newbury Building Society 33 Your vote is extremely important to the Society and enables you to exercise your Membership rights. It’s important that we give back to the communities in which our members and our employees live and work. In 2021 we will be supporting the following charities.

Helen and Douglas Priors Court School Paediatric Intensive House (Hermitage) Care Unit (PICU) Abingdon/Didcot branch Hungerford branch Winchester branch

St Michael’s Hospice Alton Food Bank Sue Ryder Basingstoke branch Alton branch Wokingham branch

The Countess of Newbury Cancer Care Alzheimer’s Society Brecknock Hospice Newbury/Thatcham Head Office Andover branch branch

The Society will donate 15p for every paper vote cast and 50p for every vote sent through the secure website to be split between the Society’s nine community charities. We encourage you to vote, particularly through the website as this saves costs and increases the charitable donation.

Rule change summary The Board is proposing changes to the 2. An Annual General Meeting and/or a special Society’s Rules at this year’s AGM. The general meeting may be held solely as a proposed new rule sets out the ways in physical meeting, solely as an electronic which members can attend and participate meeting accessible by using an electronic in general meetings and has been added to platform, or by offering members the option specifically enable flexibility around holding to attend and participate at a physical meetings physically and electronically. meeting place (which may include a Whilst it will always be the Board’s intention secondary meeting place) or by using an to hold a physical meeting, recent events electronic platform. have shown that allowing for alternative arrangements is a sensible contingency 3. A member is present at an Annual General to ensure the governance processes can Meeting or special general meeting for the continue uninterrupted. purposes of these rules if:

The resolution proposes that the Rules of the (a) being an individual, he attends in Society are amended by inserting a new rule, person; after Rule 31, as follows, and the subsequent (b) being a body corporate, a Corporate rules are renumbered accordingly: Representative attends in that capacity in person; or 32. Means of participation in meetings (c) a person appointed as his or its proxy, attorney or representative (or any 1. The Board may make arrangements for person specified in paragraph (7) of members to attend and participate in Rule 37) Annual General meetings and/or special Including in each case, where permitted by general meetings by: the Board in accordance with these rules, attendance at any secondary meeting place or (a) attendance at a physical meeting by using an electronic platform. place; (b) simultaneous attendance and 4. Where the Board decides that members participation at a secondary may attend and participate in an Annual meeting place; and/or General Meeting or a special general (c) using an electronic platform. meeting by using an electronic platform,

34 2020 Members’ Review - Newbury Building Society the notice of general meeting given under general meeting to be available for Rule 33 shall set out details of the electronic inspection at any Secondary Meeting platform for the meeting (and any access Place (in addition to he principal physical arrangements for such electronic platform meeting place) and by any Members who shall be communicated to Members, either attend and participate in the meeting by in the notice or otherwise). using an Electronic Platform.

5. Details of any physical meeting place, 7. Any persons wishing to attend an Annual secondary meeting place and/or electronic General Meeting or a special general platform that shall be stated in a notice meeting (whether at any principal of meeting given under Rule 33 shall physical meeting place or any Secondary constitute the place of such meeting. Meeting Place, or by using an Electronic Platform) shall be required to comply 6. Arrangements shall be made for any with any identification procedures and documents which are required to be made security arrangements as the Board shall available for inspection by Members at reasonably specify from time to time. an Annual General Meeting or a special

Rule change summary

2020 Members’ Review - Newbury Building Society 35 Abingdon Didcot Winchester 1 West St. Helen Street 136 The Broadway 143 High Street Abingdon-on-Thames Didcot Winchester Oxfordshire OX14 5BL Oxfordshire OX11 8RJ Hampshire SO23 9AY 01235 527750 01235 813431 01962 852716 [email protected] [email protected] [email protected]

Alton Hungerford Wokingham 47 High Street 127 High Street 19 Broad Street Alton Hungerford Wokingham Hampshire GU34 1AW Berkshire RG17 0DL Berkshire RG40 1AU 01420 84275 01488 684705 0118 978 5945 [email protected] [email protected] [email protected]

Andover Newbury Head Office 35 High Street 105b Northbrook Street 90 Bartholomew Street Andover Newbury Newbury Hampshire SP10 1LJ Berkshire RG14 1AA Berkshire RG14 5EE 01264 361455 01635 522588 01635 555700 [email protected] [email protected] [email protected]

Basingstoke Thatcham 5-6 Chelsea House 4 High Street Festival Place, Basingstoke Thatcham Hampshire RG21 7JR Berkshire RG19 3JD 01256 816813 01635 864996 [email protected] [email protected]

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Newbury Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register number 206077). English Law applies and we will communicate with you in English. We are participants of the Financial Ombudsman Service. We have a complaints procedure which we will provide on request. Most complaints that we cannot resolve can be referred to the Financial Ombudsman Service. 8058