Darlington Building Society has announced the strongest financial performance in its 167-year history despite the backdrop of worldwide economic turmoil. PETER BARRON reports

AFTER the pandemic years of 2020 and 2021, Andrew Craddock had high hopes that a sense of normality would start to return in 2022.

Instead, the uncertainty spread by Covid-19 was swiftly replaced by a year of further economic turmoil sparked in February by Russia’s invasion of Ukraine and followed by momentous events such as the death of The Queen, the markets going into meltdown in the wake of the Government’s mini-budget, and the subsequent cost-of-living crisis.

And yet, despite it all, the Chief Executive of Darlington Building Society can take pride in the way his staff again rose to historic external challenges to deliver record-breaking performance.

“I’m delighted with what we achieved last year, in difficult circumstances.  It’s a huge testament to our people,” he says. “It’s thanks to them that we’ve been able to invest in the future of the Society, while also rewarding savers, protecting borrowers, and supporting our local communities.”

The Society delivered a record profit before tax of £5m, along with its highest ever total assets of £833m, securing its place among the top 20 largest building societies in the UK. And the performance was underpinned by record mortgage lending growth of £97m and an increase in savings balances of £69m.

However, Darlington Building Society’s focus is firmly on “optimising, not maximising” profitability. It is about achieving a healthy balance, so the significant investment in the business, a wide range of good causes, members’ interests, and the wellbeing of staff has resulted in a core operating profit of £2.2m.

The Bank Base Rate increased eight times during 2022, and the Society passed on around 60 per cent of the increase to savers – 55 basis points better than the market average.

At the same time, borrowers were protected from rising costs, with the Society only passing on 44 per cent of the Bank Base Rate increases, resulting in the Standard Variable Rate (SVR) increasing to 5.98 per cent at the end of 2022, compared to the market average of 6.62 per cent, significantly lower than the majority of its peers.

Meanwhile, the Society donated £268,000 in grants to local good causes in County Durham, Teesside, and North Yorkshire, due to its annual commitment to invest five per cent of its profits into the local communities around its nine branches. More than £660,000 has now been donated to good causes since the 5% Pledge was introduced in 2017.

In his annual report ahead of the Annual General Meeting (AGM) on April 24, Mr Craddock says: “Following the pandemic-related disruption in 2020 and 2021, I was expecting 2022 to start to see a return to more normal conditions.

“However, 2022 has again been a challenging and volatile operating environment. International supply chain disruption, and the war in Ukraine, have resulted in rising inflation, followed by the Bank of England increasing interest rates.

“2022 has also witnessed considerable political upheaval in the UK and the death of The Queen after 70 years on the throne. In the context of this environment, I am delighted with the strong performance of the Society.”

It is those solid financial foundations that enable the Society to invest in the future and 2022 saw significant investment in technology. For example, a new online banking platform, enabling members to access accounts online, as well as make payments and open accounts digitally, is on target to be made available in the first half of this year.

“It’s about giving members more choice on how they interact with us,” says Mr Craddock. “We accept that the digital system we have now is quite difficult to use, but the one that will replace it in 2023 will make it much easier for members.”

However, the CEO pledged that the Society remains “absolutely committed” to its branch network in nine locations: Darlington, Stockton, Middlesbrough, Bishop Auckland, Barnard Castle, Yarm, Redcar, Guisborough and Northallerton. Indeed, further investment in the branches is scheduled for 2023.

An unswerving commitment to traditional, personal service remains a priority for the Society, and Mr Craddock cites an example of the way staff responded to a flood at the Stockton branch one Saturday morning last year.

“It meant we couldn’t open the branch on that Saturday but the staff launched into a clean-up operation with mops, brooms and dehumidifiers, working over the weekend to make sure we could open on the Monday,” he recalls. “All they were concerned about was minimising disruption and inconvenience for our members. That sums the staff up – it’s a team effort.”

In return, the Society goes further than most in rewarding its employees, leading to it being rated as the 15th best company to work for in the North East in the latest Best Companies survey. During 2022, all salaries were benchmarked, and better benefits were introduced, including increased pension contributions and more holidays. In addition, the Society made a payment of £1,000 to each member of staff to support them during the cost-of-living crisis.

For Darlington Building Society, it really is all about taking care of people, whether they are customers, members of the community, or employees.

And it’s a philosophy that adds up to outstanding results – with interest.

AT THE HEART OF THE COMMUNITY

DARLINGTON Building Society prides itself on being embedded in its local communities, and it is on track to help celebrate an important milestone in North East history

Last year, the Society was announced as a key partner in plans to commemorate the 200th anniversary of the pioneering Stockton & Darlington Railway in 2025.

As a cornerstone of the celebrations, work is underway on the construction of Darlington’s Railway Heritage Quarter, with the Society sponsoring a new state-of-the-art Exhibition Hall.

The Society’s Chief Executive, Andrew Craddock, says: “Railway heritage is at the core of Darlington’s history and, as an institution that has been at the heart of the town since 1856, we felt that Darlington Building Society simply had to be involved in such an important anniversary. As soon as the bicentennial plans were announced, it was inconceivable that we wouldn’t be part of the celebrations.”

Consequently, the Society’s Annual General Meeting, at Theatre Hullabaloo, on April 24, will have a railway theme, with Darlington Borough Council’s Head of Culture and Heritage, Mike Crawshaw, giving an update on the bicentennial plans.

Meanwhile, the Society is steaming ahead with its commitment to donate five per cent of its profits to good causes in the community. As a result of its outstanding financial performance in 2022, the Society, with the support of County Durham Community Foundation, was able to give out grants to local good causes totalling £268,000. Since the 5% Pledge was introduced in 2017, the Society has now invested more than £660,000 in charities and community organisations.

The Society’s staff are also encouraged to get involved in the community and, during 2022, employees volunteered 1,136 hours for local good causes.

Here are three examples from a long list of great community causes that were supported by Darlington Building Society in 2022:

• In March, the Society announced an “exciting” partnership with the North East Autism Society (NEAS). A £15,000 donation from the Society’s 5% Pledge helped the pioneering charity to build an accessible outdoor play area at The Mackenzie Thorpe Centre in South Bank, Middlesbrough. Kevin Meikle, Fundraising Manager for NEAS, said: “Darlington Building Society is a financial institution that is well known for being at the heart of the community. We’re thrilled to be entering into such an exciting partnership. The new play area will bring so much joy to children who attend The Mackenzie Thorpe Centre – not just now, but in the future too.”

• In April, more than 40 volunteers from the Society braved freezing winds and hail to plant more than 1,500 trees at the Clervaux Trust’s farm at Croft-on-Tees, near Darlington. The charity provides care and opportunities for young adults with complex learning and behavioural issues. Catriona Clark, assistant grower for the Clervaux Trust, said: “We’ve been wanting to increase the numbers of trees on the land for a while, so the support from Darlington Building Society has been wonderful.

• At the end of the year, the Society helped spread festive cheer across the North East by donating £8,000 from the 5% Pledge to a charity distributing Christmas hampers to families unable to access food banks. The financial support was given to the Feeding Families charity, which has helped around 44,000 families over the past year. Feeding Families’ Chief Executive, Juliet Sanders, said: “With the cost-of-living crisis hitting hard, we have not been receiving our usual level of food donations, so the £8,000 donation from Darlington Building Society has been invaluable in helping us to fill the gaps. It is a great example of a community-focused business that genuinely wants to make a difference.”