CM YK www.leedsbuildingsociety.co.uk LEEDS YELLOW 105 Albion Street, Leeds LS1 5AS Leeds Building Society Tel: 0113 225 7777 PMS ??? PMS ??? JOB LOCATION: PRINERGY 3 DISCLAIMER Approver Annual Repor t The accuracy and the content of this file is the responsibility of the Approver. Please authorise approval only if you wish to proceed to print. Communisis PMS cannot accept liability for errors & Accounts once the file has been printed. Printer This colour bar is produced manually all end users must check final separations to verify colours before 2011 printing. LDS00038 (03/12) LDS00038-R+A-COV.indd 1 27/02/2012 10:50 Financial Highlights Where to find us For the year ended 31 December 2011 Aberdeen Harrogate Street Lane Norwich 68 Carden Place, Aberdeen AB10 1UL 12 Oxford Street, Harrogate HG1 1PU 69 Street Lane, Roundhay, Leeds LS8 1AP 6/7 Guildhall Hill, Norwich NR2 1JG Tel: 01224 642641 Tel: 01423 546510 Tel: 0113 225 8720 Tel: 01603 626978 Banbury Huddersfield Wetherby Nottingham 19 High Street, Banbury OX16 5EE 8 Cherry Tree Centre, Market Street, 2 Horsefair Centre, Wetherby LS22 6FL 23 Listergate, Nottingham NG1 7DE Tel: 01295 277912 Huddersfield HD1 2ET Tel: 01937 585768 Tel: 0115 947 2841 Barkingside Tel: 01484 530842 Yeadon Peterborough 84 High Street, Barkingside IG6 2DJ Hull 59 High Street, Yeadon LS19 7SP 2 Queen Street, Peterborough PE1 1PA Tel: 020 8550 7678 78 Paragon Street, Hull HU1 3PW Tel: 0113 250 6313 Tel: 01733 896565 Barnsley Tel: 01482 224892 Reading 2 Peel Square, Barnsley S70 1YA Kendal 10 Cross Street, Reading RG1 1SN Tel: 01226 770773 83 Stricklandgate, Kendal LA9 4RA Leicester Tel: 0118 957 5192 million Tel: 01539 724460 £102.4 Belfast 13 Halford Street, Leicester LE1 1JA Ripon operating profits before impairment losses and provisions 19–21 Cornmarket, Belfast BT1 4DB Tel: 0116 251 6748 17 Market Place North, Ripon HG4 1BW Tel: 028 9024 2277 London (Kingsway) Tel: 01765 600300 Birmingham Leeds Area Branches 41 Kingsway, London WC2B 6TP Sale 33–35 Corporation Street, Head Office Tel: 020 7240 2808 26 School Road, Sale, Cheshire M33 7XF Birmingham B2 4LS 105 Albion Street, Leeds LS1 5AS Manchester Tel: 0161 973 0093 Tel: 0121 643 6722 Tel: 0113 225 7555 47 Cross Street, Manchester M2 4JF Sheffield Bradford Adel Tel: 0161 832 0346 14 Pinstone Street, Sheffield S1 2HN Broadway House, Bank Street, 475 Otley Road, Adel, Leeds LS16 7NR Tel: 0114 272 2230 Bradford BD1 1HJ Tel: 0113 225 8500 Southampton Tel: 01274 391401 Armley North East Area Branches 41 London Road, Southampton SO15 2AD Braintree 45/47 Town Street, Armley, Leeds LS12 1XD Tel: 023 8022 6699 61 High Street, Braintree CM7 1JX Blyth Tel: 0113 225 8510 18 Church Street, Blyth NE24 1BG Stevenage million Tel: 01376 553063 £50.2 Beeston Tel: 01670 354725 52 Queensway, Stevenage SG1 1EE Brecon Tel: 01438 741822 pre-tax profits 665 Dewsbury Road, Beeston, Chester–le–Street 12a The Bulwark, Brecon, Powys LD3 7AD Leeds LS11 5LF Swansea Tel: 01874 611525 144 Front Street, Chester–le–Street Tel: 0113 225 8520 County Durham DH3 3AY 16 Union Street, Swansea SA1 3EH Bristol Boston Spa Tel: 0191 389 1794 Tel: 01792 472503 Wine Street, Bristol BS1 2HP 181a High Street, Boston Spa, Watford Tel: 0117 922 6772 Durham Wetherby LS23 6AA 9 North Road, Durham DH1 4SH 67 The Parade, High Street, Cardiff Tel: 01937 843190 Tel: 0191 384 0561 Watford WD17 1LJ 5 St John Street, Cardiff CF10 1GJ Chapel Allerton Tel: 01923 240589 Tel: 029 2037 2730 Morpeth 3 Stainbeck Corner, Chapel Allerton, 34 Bridge Street, Morpeth NE61 1NL York Cheltenham Leeds LS7 3PG Tel: 01670 514083 49 York Road, Acomb, York YO24 4LN 12 Winchcombe Street, Cheltenham Tel: 0113 225 8550 Tel: 01904 335500 GL52 2LX Newcastle Crossgates 142 Northumberland Street, billion Tel: 01242 222911 57 Station Road, Crossgates, £7.4 Newcastle NE1 7DQ Derby Leeds LS15 8DT Tel: 0191 232 2801 Overseas Branches member savings balances 8 St James Street, Derby DE1 1RL Tel: 0113 225 8560 Tel: 01332 344644 North Shields Dublin Garforth 23 West Percy Street, North Shields Ground Floor, 7 Upper Fitzwilliam Street Dewsbury 38 Main Street, Garforth LS25 1AA NE29 0AH Dublin 2 17 Foundry Street, Dewsbury WF13 1QH Tel: 0113 286 3757 Tel: 0191 296 0222 Tel: 00353 16788824 Tel: 01924 469206 Harehills Road Silverlink Gibraltar Doncaster 13 Harehills Road, Leeds LS8 5HR Mercantile House, Kingfisher Way, Silverlink For customers in Gibraltar and Spain 8 Frenchgate, Doncaster DN1 1QQ Tel: 0113 225 8610 Business Park, Wallsend NE28 9NY First Floor, Heritage House, Tel: 01302 730485 Headingley Tel: 0191 295 9500 235 Main Street, Gibraltar Epsom 18 Arndale Centre, Otley Road, South Shields Tel: (00350) 20050602 13 High Street, Epsom KT19 8DA Headingley, Leeds LS6 2UE 42 Fowler Street, South Shields NE33 1PG Tel: 01372 728695 Tel: 0113 225 8620 Tel: 0191 427 1122 billion Glasgow Horsforth South Tyneside District Hospital £1.23 182 Hope Street, Glasgow G2 2UE 80 Town Street, Horsforth, Leeds LS18 4AP South Shields NE34 0PL new mortgage lending Tel: 0141 331 4525 Tel: 0113 258 1668 Tel: 0191 497 5336 Gloucester Moortown Wallsend 43 Northgate Street, Gloucester GL1 2AN 4/5 Harrogate Parade, Moortown, 64/66 High Street West, Wallsend Tel: 01452 520163 Leeds LS17 6PX NE28 8HX Tel: 0113 225 8680 Halifax Tel: 0191 262 4751 31 Commercial Street, Morley Whitley Bay Halifax HX1 1BE 23 Windsor Court, Morley LS27 9BG 104 Park View, Whitley Bay NE26 3QL £572 million Tel: 01422 362359 Tel: 0113 253 7444 Tel: 0191 251 1376 capital and reserves Or call our UK-based call centre, with calls answered personally by a member of staff, from 8am-8pm, seven days a week on 08450 505 065 We may monitor and/or record your telephone conversations with the Society to ensure consistent service levels (including staff training). Or go online – whenever and wherever it suits you! www.leedsbuildingsociety.co.uk LDS00038-R+A-COV.indd 2 27/02/2012 10:50 01 ANNUAL REPORT & ACCOUNTS 2011 CM YK LEEDS YELLOW PMS ??? Contents PMS ??? JOB LOCATION: PRINERGY 3 DISCLAIMER Approver The accuracy and the content of this file is the responsibility of the Approver. Please authorise approval only if you wish to proceed to print. Communisis PMS cannot accept Chairman’s Statement 2 liability for errors once the file has been printed. Printer Chief Executive’s Review 4 This colour bar is produced manually all end users must check final separations to verify colours before Business Review 6 printing. The Board of Directors 12 Directors’ Report 14 Corporate Governance Report 18 Directors’ Remuneration Report 21 Directors’ Responsibilities 23 Five Year Highlights 24 Independent Auditor’s Report 25 Income Statements 26 Statements of Comprehensive Income 27 Statements of Financial Position 28 Statements of Changes in Members’ Interest 29 Statements of Cash Flows 30 Notes to the Accounts 31 Annual Business Statement 79 Glossary of Terms 82 Directors Robin A. Smith, TD, LLB, DL John N. Anderson, QA, CBE Les M. Platts, BA, FCA (Chairman) Robin J. Ashton, BA, ACA Abhai Rajguru, BSC (Hons), ACMA Robert W. Stott Carol M. Kavanagh, BA, MA Kim L. Rebecchi, BA (Hons), FCIB (Vice Chairman) Robin S. P. Litten, ACMA (Sales and Marketing Director) Peter A. Hill, ACIB (Finance Director) Ian Robertson, CA, CCMI (Chief Executive) Secretary Andrew J. Greenwood, LLB LDS00038-R+A-12.indd 1 27/02/2012 12:59 Chairman’s “ Through a combination of excellent customer service, a wide range of competitive accounts and product Statement innovation, we increased savings balances to £7.4bn... For the year ended 31 December 2011 ” In 2011, Leeds Building Society delivered BALANCE SHEET REGULATION AND INDUSTRY BODIES Society assets at the year end rose to £9.9bn. Continued profitability We continue to operate in a highly regulated environment which will record operating profits, improved capital enabled us to increase capital and reserves to a record £572m from see changes as the Financial Services Authority (FSA) splits into the and reserves and boosted market share in £531m in 2010, which is significantly in excess of the minimum Financial Conduct Authority (FCA), focusing on consumer protection, regulatory requirement. Only 4.5% of our capital and reserves is and the Prudential Regulation Authority (PRA) that will focus on both new lending and savings, despite the borrowed (and therefore remunerated) and is the lowest ratio of the financial stability. We are also facing changes resulting from the FSA’s difficult economic backdrop. This excellent top 10 building societies, by asset size. Our core Tier 1 capital ratio Mortgage Market Review and Retail Distribution Review. improved to 13.8% from 13.2% in 2010. Regulatory product reviews have significantly changed the Payment performance is the result of our strong and Protection Insurance market leading to many high street lenders having sustainable business model delivering value PROFITABILITY AND EFFICIENCY to make significant provisions for customer redress. Our robust sales processes and good product offering, means we have been required to and security to our members. As a member The Society’s net interest margin increased from 1.15% in 2010 to make only modest levels of refunds to customers. owned organisation, our capital strength 1.32%. This improvement, together with high levels of efficiency, Our relationships with our members, regulators, the Bank of England, helped deliver a record operating profit of £102m and a 19% increase the media, industry trade bodies and the credit ratings agencies, Fitch provides ongoing stability as all our profit is in pre-tax profit to £50.2m (£42.2m 2010). Our strong interest and Moody’s, continue to be strong. Despite the agencies’ ratings of invested in the business rather than being margin has been achieved through closely managing the requirements the Society moving down by one notch, we have not seen any material of both borrowers and savers, and offering a broad range of impact.