Friday, 12 September 2014

Nostalgia isn't really my thing - I prefer to look forward rather than glance backward. Of course I relish the movies and music of the 70's when I was growing up, but that stuff means as much to me now as it did then. In 1975 there was no bigger event than the release of their Physical Graffiti album by Led Zeppelin, but I was listening to that CD when travelling in my car this morning and it still sounds as vibrant to me now as it did almost 40 years ago. So that doesn't feel like a yearning for nostalgia, it feels more like an appreciation of the quality and the longevity of musical genius.
Similarly when I look back on our financial year 2013/14 it is the performance of our people, their dedication and commitment that resonates for me. Products come and go, marketing campaigns dissolve, but the tenacity and the focus on Hanley values remain intact as we reflect on a very successful year for the Society. That's why yesterday's meeting of the senior management team is so important. We met to discuss and evaluate the proposed PRP appraisal ratings for every member of staff at The Hanley, to ensure consistency and transparency and to challenge ourselves, and Key Managers, on our approach and our conclusions. Spending a full day talking about People Performance isn't an extravagance, it's a testimony to the culture at The Hanley and proof of the rigorous way we choose to appraise and develop our single greatest asset - our staff. It is also one of the most enjoyable and rewarding meetings for me personally, as it reminds me (in a non-nostalgic sort of way) just how amazing our staff are and the pivotal role they play in our success.
This year we held our PRP meeting against a backdrop of some of the best results we've achieved in many years -
    • Mortgage Advances up 39% to £65m
    • Net lending up 47% to £23m
    • Savings balances up 12% to £310m
    • New membership up 80% to 2,215
It is an obvious point to make, but an important one to repeat - our success this year is a consequence of having talented, committed and engaged staff. I’m grateful for all of their hard work and I’ll allow myself a brief look back to the past year, closely followed by a look ahead with optimism to an equally buoyant 2014/2015.

Monday, 20 January 2014


Across the media fixed rate mortgages are fashionable. The logic goes like this; interest rates are at their lowest level for decades and the Bank of England base rate has been stuck on 0.5% for nearly 5 years so their only way is up, therefore grabbing a fixed rate deal now is the smart move, especially as there are still plenty great fixed-rate offers on the market. Indeed even a senior member of the Bank of England's Financial Policy Committee ,Richard Sharp, advocated this when he declared this week that "now is a good time to fix" when he delivered his perspective in front of the Treasury Select Committee. Obviously Mr Sharp was speaking in generic terms to UK families rather than providing mortgage advice, but he captured the mood that fixed rates are magnetic, as evidenced by recent statistics from the Council of Mortgage Lenders which reveal that 9 out of 10 new borrowers are opting for a fixed rate loan rather than a variable rate mortgage.
Automatic decisions always make me twitchy! I prefer to consider the options. That's why I believe in informed advice at an individual level before a new borrower plunges into the congested pool of fixed-rate buyers.
Choice across a range of alternatives is beneficial to the customer as is a tailored solution. Undoubtedly the attraction of a fixed rate deal is the certainty of knowing how much is payable each month for the period of the product, typically 2 or 5 years. Such an assurance is vital for many people as they weigh up affordability. BUT although the next move in interest rates will be upwards , we cannot say when that will occur and it could even be 2 years away. So the differential between a fixed rate and a comparable variable rate product can't be ignored. Even if rates rise in mid 2015, as some predict, a variable rate mortgage could be a smarter choice and this relative strength is even more pronounced when set up fees are taken into account. Most variable rate products are fee-free whilst fixed rates can carry fees of £2000 or more. This may be a heavy charge for the certainty of knowing your monthly payments. Unlike a variable rate mortgage there is a rigidity and inflexibility inherent in a fixed rate deal so if pliabilty is important to a customer then a variable rate product may be more suitable.
I am not getting all Orwellian and Animal Farm here....fixed bad, variable good........but nor is the reverse true. Crucially, the pivot is genuine choice via informed, professional mortgage advice so that no one is just shoe-horned into the latest fashion.

Monday, 25 November 2013


I was only 4 years old when John F Kennedy was assassinated in Dallas in November 1963. I'm not old enough to recall exactly where I was when his death was announced, but I've always been intrigued by the conspiracy theories and by the inconsistencies around the Warren report and the killing of his assassin Lee Harvey Oswald. JFK holds a special, some would say romanticised, position in modern American history and 50 years after he died the fascination with his leadership style and his charismatic personality seems undiminished.
Many people argue that JFK would never have coped with the intensity of 21st century media scrutiny as his personal indiscretions would have been magnified and the mystique of his character would nowadays be more rigorously challenged. Maybe so. But at the very least JFK had 3 leadership traits which for me are highly impressive and from which we can still learn a great deal even 50 years after his death –
1. He really knew how to set stretch targets! In fact when he announced in September 1962 that “we choose to go to the moon in this decade, not because it is easy but because it is hard”, he really set the ultimate stretch target. This inspired a generation of Americans to take scientific exploration to unbelievable levels and made people believe they could achieve a feat almost beyond comprehension.
2. He was an innovator. When he ran for President in 1960, JFK took on Richard Nixon in the first ever televised presidential debate. He used the emerging technology of TV to connect with voters and to emphasise his youthful vibrancy and modernity.
3. He knew his own power, and he adjusted its impact on others. Kennedy was very aware of his impact on the people around him in the White House and he knew that his presence could dominate every debate and decision. During the Cuban Missile Crisis he insisted that his brother Robert, the Attorney General, led the discussions as JFK wanted to know what his top people really thought, and he knew that if he was in the room then people would be tempted to say what they thought the President wanted to hear rather than what they really believed.
It seems to me that Statesmanship is rare these days on the world stage and I can think of only one current global leader whose leadership credentials are likely to be recalled 50 years from now (Nelson Mandela) but JFK resonates still, not just because of the awful circumstances of his death, but also because of the potency of his leadership even when viewed through a contemporary lens.

Wednesday, 24 July 2013


The government's flagship initiative Help to Buy has attracted "mixed" reaction even before it is launched next January.Heavyweight commentators like  the former Governor of the Bank of England and the chairman of the influential Treasury Select Committee have expressed reservations. I know my own concerns don't carry that kind of punch but it still feels like we are trying to solve a housing supply problem with a demand-stimulus. That risks a future house price bubble and affordability challenges for many borrowers in the years ahead and  at a time when interest rates could well be rising. We simply don't build sufficient new homes in the UK and until that is addressed, then such initiatives feel far too tactical and headline-grabbing. I'm also convinced that if the large banks had followed the example of the mutual sector and continued to lend to furst time buyers in recent times then a government-underwritten  scheme would not be neccessary. Building societies like The Hanley  never evacuated the first time buyer market as we have always recognised that customers with modest deposits are a key link in the lending chain. Over the past year our lending to borrowers requiring a mortgage of 90%+ LTV has shown a substantial increase and we are able to do so prudently and within our own risk-appetite , therefore participation in Help to Buy is not essential for us. The devil is in the detail of the scheme and we will undoubtedly keep it under review but an absence from the list of lenders using Help to Buy is certainly not any kind of signal of a reluctance to lend to first time buyers. On the contrary we are already doing what this scheme is encouraging lenders to do, and therefore we'd need to be persuaded that there are  clear benefits in changing runways when we have a perfectly sccessful  flight path already.          

Tuesday, 18 June 2013


Although I've always regarded Stamp Duty as an unfair and distorting  tax due to its "slab" structure I was nonetheless taken aback by its impact in recent years compared to in the mid 1990s as revealed in a report called " Stamping on Aspiration" produced by Homeowners Alliance.  The average Stamp Duty paid on buying a home jumped from £532 in 1996 to £5957 in 2011.......a ten fold increase! Stamp Duty has risen 7 times faster than inflation,6 times faster than average earnings and 5 times faster than house prices since 1996. The government now forecasts that by 2017 it will make as much money taxing people buying their home as it will from the so-called "sin-taxes" on alcohol and tobacco. So much for the governments stated desire to foster conditions which aid aspiring homebuyers .The report concludes that the persistent ratcheting up of Stamp Duty by successive governments is a key reason for the decline in UK home ownership since 2002. Aspiring homeowners have had to tackle the quadruple-whammy of rising rates of duty, new Stamp Duty bands, frozen  thresholds and rising house prices. Given the plethora of current Government initiatives to stimulate demand in the housing market....First Buy / New Buy / Home Buy / FLS ..... surely the time is right to take a surgical knife to Stamp Duty and sacrifice some tax receipts for the prospect of greater affordability and more flexibility for homebuyers.  Short term counter-cyclical measures such as those I've listed may well have some  relevance and impact as the economy bumps along, but more strategic solutions on topics  like Stamp Duty ( and housing supply) though  much tougher to initiate , are the really pivotal changes which could re-mould our housing market for  the decade to come.       

Friday, 10 May 2013


This week I completed my tenure as Chairman of the Building Societies Association and passed the baton to my successor David Cutter ( CEO Skipton BS) at our Annual Conference in Harrogate. I have learnt a lot during my time as Chairman and feel very fortunate to have been elected to the role, during a period of immense change in our industry.   I  was delighted to complete my term with a hugely successful conference with high-calibre guest speakers and a sense of optimism and resurgence amongst attendees. Highlights of the week for me included a very thought provoking debate on the future of branches, which included presentations from the CEO of First Direct and the CEO of Yorkshire BS, a quite awe-inspiring talk by Sir Ranulph Fiennes and a superb speech by the former MD of Dyson who reminded us all of the vital role played by innovation in business success. I also sat next to our after-dinner speaker Jeremy Vine on Wednesday night who is  really enagaging and interesting  company and a first-class speaker with a fantastic range of anecdotes from his 25 years in broadcasting. We found that we also shared similar tastes in music, mainly from late 70s stuff like Bowie, The Clash and the slightly more obscure Spear of Destiny. Unquestionably the mood of the conference was that this is a key moment for mutuals as we seek to seize the initiative and advance our market share while competitors in the PLC banking sector remain mired in customer-mistrust and balance sheet rebuilding. But it is also very clear that forward-momentum can only be maintained if building societies focus on delivering what customers really need , whether that is in  first time buyer lending or in helping advise our members on long term savings. We also wish to reinforce our message that mutuals have a contemporary relevance and to do that we acknowledge scope for additional investment in new ways of marketing and distributing our products in the digital arena. Combining  the values & traditions of our roots with a modern zest for outstanding service sounds to me  like a potent cocktail.      

Friday, 12 April 2013


Recently I was asked to open the new Management School at Keele University following the refurbishment of the Darwin Building. Prior to saying a few words to the attendees as a group, I got involved in some conversations about business confidence and the difficulties facing small businesses in making investment decisions when their confidence is fragile. The tone of our discussions reflected the prevailing mood of austerity in the general economy and a sense that many businesses feel compelled to postpone expansionary decisions until the clouds shift. We also spoke of the downside risks of getting the timing wrong and how that can further sap confidence. I was reminded that confidence is the glue that binds so many of our actions as individuals and as businesses. Further evidence that confidence is the thing appeared on my TV screen last night when I watched David Lynn from Trentham golf club, here in Stoke, being interviewd on Sky TV following his sensational round on the first day of the Masters in Augusta. He just personified a quiet, relaxed confidence. The sheer scale of his achievement was overshadowed by the ease with which he got the job done. Of course being a true pro he'd no doubt say that there are still 3 more days to go before the job is done but my point remains; a sense of confidence makes things happen. And the opposite is true too,  absence of confidence allows doubt and fear to prevail . The recently published Financial Services Survey by CBI / PWC on Industry Sentiment  declares that "fresh growth is reported across a range of sectors and customer segments.Rising profitability and an increase in employment reinforce the impression of greater confidence". Lets hope the glue is sufficiently adhesive to bring forward some of those key decisions on business investment.