HAPPY CHRISTMAS

''So this is Christmas, and what have we done? "
Well at The Hanley we've completed another successful year as evidenced at our recent AGM and in our annual report & accounts, both in terms of financial performance and member endorsement. In a tough market we have continued to win business and to do so in a way which is in the long-term interests of our members .
Less parochially, and much as I prefer to look forward rather than glance back the way, 2010 has had some very pronounced peaks and troughs. The low points include;
... the dullest football World Cup in living memory, punctuated by the droning din of the vuvuzela and hectares of discounted merchandise after Englands puny elimination.
... a dreary General Election, followed by the musical chairs of the coalition formation.
....the inexplicable success of the "comedian" Frankie Boyle

High points must be;
...the rescue of the Chilean miners.
...the gold medal performance of Amy Williams at the winter Olympics
...the Swedish film version of The Girl with the Dragon Tattoo
...the Ryder Cup victory at Celtic Manor

No doubt 2011 will unpack it's share of surprises. Meantime may I wish you and yours a happy Christmas and a healthy and prosperous new year.

BIDDULPH WELCOME

The highlight of my week has been the opening of our new branch in Biddulph. The welcome we've received from the local people has been extraodinary and many have already become Hanley members having previously used the premises when occupied by Cheshire building society.Our aim is to be the "go to" place for mortgages , savings and investment advice for everyone in the local Biddulph area , and we've made a fantastic start. Our new branch team is a blend of Hanley experience and new faces, all very determined to shine and to deliver all that is great about a local mutual , with a focus on excellent customer service and tailor-made products.
I've had a fair bit of media reaction, querying why we have bucked a trend of bank branch closures, but reminded commentators that building societies unlike the big banks have sustained a commitment to branch networks, even during the turmoil in our core markets over the past 2 years and in fact several other societies have announced new branches in recent months (eg Newbury BS and Harpenden BS)
The local branch really is our finest demonstration of what we stand for, in terms of service, accessibility and brand values. Of course any branch is only as good as it's staff and on that score,I'd pitch my teams against any other, no matter how big the organisation is or how many TV adverts they use to proclaim their"customer charter".
We are thrilled to be in Biddulph and look forward to many years serving that local community and doing business in the town.

DIVERSITY IS A VIRTUE

The heads of several media groups,including ITV and BBC, have written to Business Secretary Vince Cable urging him to block any attempt by Rupert Murdoch's NewsCorp to take full control of BSkyB on the grounds that such a move "could reduce diversity" in the marketplace. Whatever the merits of their specific case (and I have to admit to being a reader of The Times and avid watcher of SkySports) the importance of a diverse market with genuine consumer choice is compelling.Diversity in business is a contemporary topic and I am struck by the potency of the argument for diversity in our own marketplace .A recent research report by the Oxford Centre for Mutual and Employee-Owned Business makes that case very powerfully, reminding us that a more diverse financial services sector promotes systemic stability and offers benefits to individual customers by increasing competition and choice. The report emphasises that mutuals bring a market dimension based on service and member-engagement with low risk-appetite and high customer endorsement.Such characteristics are worthy of support from decision makers and regulators if only to put competitive pressure on the banks where the current market share of the biggest 6 banks in gross residential lending is excessive . In a thought provoking report the author Jonathan Michie also finds time to advocate a Minister for Mutuals. Now that would go a long way to convince many that the coalition government's promise to " foster diversity in financial services" is a genuine one.

INSPIRATION & PERSPIRATION

Last night we held our annual staff meeting to platform our corporate plan, business targets and ambitions for the coming financial year (which begun on 1st Sept) . It gave me the chance to set out our expectations for the year ahead and to join my team in outlining how we intend to propel The Hanley forward so that we can continue to strive to be "Britains Best Local Building Society".
The theme of the evening was Exponential Change.
We spoke about the challenges in our core markets of savings and mortgages, and about the localised challenges of our city where regeneration progress is likely to be hampered by budget-cuts in the public sector.We also discussed our plans for the new branch in Biddulph and the importance of being distinctive in our distribution and our marketing. I found it really inspiring.....and thankfully I wasn't alone in feeling that way.....as it is so motivational to work alongside people who are sharply focused on being successful and determined to deliver the best we can for our members.
Alongside the inspiration there was perspiration too as I hosted our quiz night, which covered TV & movies (no surpise there) and a lengthy musical round where contestants had to identify the intros to well known pop and rock songs. Sadly for some of our directors and senior managers the tunes proved to be not that "well known" and the winning team was populated with 20 and 30 somethings .
A reminder also that the potent blend of competitive spirit and teamwork is a winning formula.

FORECASTING

Since returning from my family holiday I've been taking a fresh look at our business plans, goals and targets for the coming financial year, which for the Hanley starts on 1st September.( a bit quirky I know but the date is a legacy of our long history and we are wary of changing to a more conventional financial year)
At the core of our thinking on 2010/2011 are a series of assumptions on how markets will perform in the months ahead, what the interest rate and inflation numbers will look like and how we can carve our niche amidst the ever-changing trading conditions. In such circumstances it would be a delight to be able to rely on economic forecasts but my recent reviews of even the most eloquent of "experts" reminds me of the quote attributed to JK Galbraith that " the only function of economic forecasting is to make astrology look respectable".
Even the Monetary Policy Committee has taken some stick in the media for its failure to get much right when predicting the future , but most of us are not hoodwinked into thinking that anyone really knows with assured certainty what will really happen in the UK economy. Best-guessing is about as much as we can expect .That's why it is vital for a business like ours to evaluate, monitor and control risks and not indulge in new ventures which depend on a rose-tinted view of the future. It is also why it is essential for us to keep working on what we are already good at, refine what we do and stay flexible. At least I can forecast that we will enter our new financial year full of optimism in our ability to do precisely that.

SPANISH CAJAS

Normally when a member of staff at The Hanley stops me at the coffee machine to chat about Spain,the conversation focuses on their holidays to the Spanish coast or my annual golf trip to Marbella, but this morning I was quizzed about the plight of the Spanis Cajas. These small local banks are tipped by some market commentators to struggle to pass the current round of "stress-tests" being undertaken for banks across Europe and my colleague wanted to know whether there were any crossover similarities with small UK building societies. Of course some common ground does exist in that cajas and local building societies, like The Hanley, are locally based and are not quoted companies but that's really where the similarity ends.
Cajas are not mutual, customers are not members,and do not own the business. Cajas are heavily influenced by local political control and their lending is heavily influenced by that control.
Cajas are also exposed to the new-build development market in Spain where planning rules and the funding crisis left many sites empty and worth far less than was lent on them at the market peak.
It will be interesting to see the results of the stress-tests on the banks across Europe and indeed to look at the perceived strengths and vulnerabilities of all banks not just the cajas in Spain. But mutuality and resilience remain distinctive features of the UK building society model and if the past 2 years have taught us anything at all it must surely be that large organisational scale is no guarantee of success.

CHAIRMANS LUNCH

Yesterday I had the pleasure of hosting a lunch for the Chairmen of 10 different societies. One of the benefits of being Chairman of the BSA this year is that I get to meet the leadership of other building societies and hear about the successes and challenges that are occupying boardroom time.I am always struck by the energy and insight that exists across the sector and by the optimism that is expressed about the relevance and importance of mutuality in a diversified marketplace. The chairmen are always keen to know more about what the BSA is doing and how we can demonstrate resilience across the sector, despite the clear fractures in our core markets of savings and mortgages. Yesterday I was particularly struck by the appetite for change amongst the group of chairmen;there was no sense of yearning for a "golden era" of the past but rather a desire to get on and thrive in a new world, whatever that world may look like. I don't know if my words to them were at all motivational, but as a group they certainly motivated me!