Here at Northern Insight, we're a positive bunch who always try to look on the bright side...find the positives.
But even we’ve got to admit that the last twelve months haven’t been the best. However, dig a bit deeper and actually there are some really good stories out there about businesses that have adapted to the Coronavirus pandemic, who’ve managed to keep going against all the odds and who are coming out the other side in a leaner and better shape. One of those firms is Darlington Building Society. They’re heading into 2021 in a hugely positive frame of mind. “2020 was the worst year of my 36 year career of working in finance,” said Chief Executive Andrew Craddock. “I thought the financial crash of 2007-8 was as bad as it could get for financial institutions, but I was wrong. Last year was much worse. I’d also say the latest lockdown, lockdown three, has been the hardest of all. The toll on everyone has been enormous; the whole country, every community has been affected and the business landscape has changed forever. It’s also affected Darlington Building Society’s members and staff. However, we’ve just announced our annual report and accounts, and although the headline is that our profits are down close to £1million pounds on the previous year, the simple fact that we have returned an overall profit of just over £700,000 before tax is, I believe, an excellent achievement. Without doubt, our fall in revenue is something that every bank and building society will recognise. It’s down to an issues caused by the pandemic which resulted in four reasons why profits have been hit.
1. The Bank of England reduced its interest rates and that in turn affects us because our rates are therefore lower.
2. We’ve had to put aside more money than normal to cater for bad debts. The economy is struggling and lot of people are finding it really difficult to cope with their mortgage payments. There will also be business debt because some firms won’t survive while others will need to realign their payments.
3. We have commercial property on our books. Anyone who wanders down their local High Street won’t need to be told that this has performed badly.
4. Lastly, our costs have increased. We are investing in our business and had to pay out for people working from home who need laptops. We’ve also had to undertake a lot of work in branches by installing screens and providing PPE.
Overall though, I’m pleased with this profit and, to use a well-worn phrase, I really do believe that there’s light at the end of what’s been a very long and dark tunnel and I’m hugely optimistic for the future.” So, what about the future? Andrew has been in the financial business long enough to be able to predict how things will turn out.
“I expect the housing market to be extremely busy. There is currently a shortage of available property for the simple reason that people, in the current financial climate, are very wary about making a huge decision such as moving home. However, even over the last few weeks since the government announced its roadmap out of the pandemic, we are seeing a sizable increase in business activity. It’s interesting to note that our £124 million gross lending in the past year is only slightly down on the previous year. The ‘Help to Buy’ scheme and extension of the stamp duty holiday has helped. We want to keep helping people fulfil their dream of owning their own home.
I’m also proud of the fact that of the 43 building societies in the UK, Darlington Building Society is now ranked in the top 20. Our balance sheet has gone up 6% to just over £700 million which I think proves that we’re resilient, strong and confident. Today we are an employer that has remained “Open for Business” throughout 2020 without using the Government’s furlough scheme. We have a dedicated workforce that I am very proud of, who have each gone the extra mile for each other and our members this year. Which all culminated in our award last December as an “Outstanding” two-star rated company by Best Companies We currently have nine branches across the North East, but we intend adding to that over the coming year or so. Branches are being refurbished. We are also implementing a variety of plans which have already been funded by us. For example there will be a new online portal to make it easier for mortgage brokers to deal with us. We’re installing a new telephone system and we’ll shortly unveil our new online banking website facility whereby customers can open accounts, pay bills etc. and login and registration will be streamlined to make checking balances simple. In other words, Darlington Building Society is investing in the future to modernise and be very easy to communicate with for our members.” So there you go. As we told you at the start, try to ignore the headline grabbing news, dig a bit deeper and you’ll find a really good news story.
Darlington Building Society has been around since 1856. It’s built on firm foundations which have stood it in good stead in difficult times. That’s why it is perfectly positioned to build on its success during 2020 and be ready to help you with all of your financial matters.
