We can’t buck the market, insists Yorkshire

But chairman Ed Anderson said savers are suffering as a result of the scheme, which offers banks and mutuals cheap finance if they lend on to households and businesses. The Yorkshire faced a series of questions at its AGM in Bradford yesterday on low interest rates paid to savers. Mr Anderson said: “Our aim is to offer good long-term value to members using simple, easy-to-understand products. That doesn’t mean we will always be in the Best Buy tables. It cannot mean that. “We have to balance the interests of our current and future saving and borrowing members and we have to ensure the long-term financial sustainability of the society.” He added: “As you know, we have been in a period of historically low interest rates across the market and this has been exacerbated by the Government’s Funding for Lending scheme, which has led to significant downward movement in rates over these past few months. “The fact of the matter is we cannot buck the market.” The audience was told that the average savings rate of the Yorkshire is 2.45 per cent, compared to an industry average of 1.97 per cent, while existing members were getting better rates than new customers. Chris Pilling, chief executive, said that interest rate cuts earlier this year were on just 19 per cent of savings accounts, while the level of reduction was nearly half that the banks put in place. He said: “We are very mindful that these are tough times for all our members, and in particular our savers who have to contend with unprecedented low interest rates.” On funding, finance director Robin Churchouse said that the Yorkshire, UK’s second-biggest building society, will continue to be dominated by retail savings balances, backed by “a strong wholesale funding programme”, and will start to draw down from the Funding for Lending scheme later this year. David Billington, from Huddersfield, who was among those raising concerns about low interest rates for savers, also questioned the level of remuneration received by the directors. Mr Anderson said: “The fact of the matter is that pay has to be competitive with comparable financial services organisations to enable us to attract and retain suitable, high calibre staff.” Yorkshire Building Society’s annual report recently showed Mr Pilling received a total remuneration package of £748,000 last year. That included a salary of £462,000 and a bonus of £389,000, which has deferred elements subject to future performance. The Yorkshire also said senior management’s basic pay will rise by 10.27 per cent this year, and Mr Pilling’s by 20 per cent. The Yorkshire’s sales and marketing director Ian Bullock, corporate development director Andy Caton and Mr Churchouse received total remuneration packages of £447,000, £411,000 and £448,000 respectively last year, up from £411,000, £375,000 and £409,000 in 2011. Their salaries were £286,000, £264,000 and £286,000 respectively, and their bonuses for 2012 were £151,000, £146,000 and £150,000. Mr Anderson’s total fees were £142,000, up from £135,000 in 2011. Yesterday, Mr Pilling said that the Yorkshire has benefited from customers seeking “a trusted mutual alternative” to the major UK banks, leading to a six per cent year-on-year rise in its member numbers to 3.5 million. He said: “We opened a record 340,000 new savings accounts and increased savings balances to almost £27bn. “We helped 25,000 people buy their own home, of which 9,000 were first-time buyers, and we opened four new branches here in Yorkshire.” In February, the Yorkshire unveiled a £160m five-year spending plan as it posted core operating profits of £137.2m in 2012, a 16 per cent fall on 2011. But Mr Pilling said it was the second-highest core operating profit the Yorkshire has ever had. Statutory pre-tax profits were boosted by a debt buyback, growing 21 per cent to £157.1m. New mortgage lending increased 12 per cent to £4.6bn – boosting market share from 2.9 to 3.2 per cent. The Yorkshire has said it will plough the cash into branch openings, back office systems, staff development, mobile and internet technology and improving products and services as part of its spending plan. After a string of acquisitions in recent years, the mutual said its focus is now on organic growth. The Yorkshire has also said it could launch current accounts across the group, expanding into everyday transactions alongside its core of home loans and savings. The Yorkshire has snapped up Barnsley, Chelsea and Norwich & Peterborough (N&P) building societies in recent years, also buying the Egg mortgage and savings book in 2011. Former hotels boss a non-exec FORMER Travelodge chief executive Guy Parsons has been appointed non-executive director of the Yorkshire. His appointment to the board will take effect on May 1. Mr Parsons, a University of Leeds graduate, spent eight years at Travelodge holding roles including sales and marketing director, managing director and chief executive. Prior to Travelodge, Mr Parsons held a series of senior positions with Whitbread, including managing director of restaurant chain TGI Friday’s. A search has also begun for a further non-executive director to replace Roger Burden, who retired at the end of yesterday’s AGM.