TWO EARS,ONE MOUTH

This has been a week of listening for me. It started last Saturday morning when I hosted our quarterly Customer Form where members come along and talk to me about the financial issues that they are most concerned about. As ever , questions and discussion topics spanned a wide spectrum. I was asked about the downgrading of the UKs  AAA rating by Moodys, the prospect of negative Bank of England interest rates in the future, the impact of the Governments Funding for Lending scheme on savers rates, our plans for the branch network, the provision of external audit services by big 4 accountancy firms and inevitably the plight of savers in an economic  environment where spending is encouraged rather than prudent saving . Members attending seemed to welcome the candour of my answers even if they didn't provide a panacea and I think we did generate a bit of light as well as some heat.     In midweek I attended a breakfast meeting at our branch in Hanley to hear how a group of our staff were coping with the challenges of the mortgage market and the impact of rate-compression on customers enquiring about savings rates. It is always a priviledge to  hear stories of outstanding service in difficult circumstances, and those were a feature of my listening mode at that meeting.   I then attended a dinner with 400 guests last night at the Britannia stadium  to celebrate Gordon Banks' 75th birthday, alongside 9 Hanley colleagues who had been particularly successful in their various roles at The Hanley during the past few months and for whom this was a modest recognition of all their hard work and commitment. . As well as listening to tales of success about Englands greatest ever goalkeeper from members of the 1966 world cup squad, I also heard lots of great stuff from my own team about their optimism for the future and the ways we are promoting our excellent product range and our commitment to customer care.I feel  refreshed now, having used ears and mouth in direct proportion this week.

BOARD NEVER BORING

I mentioned to one of my guests at last nights Stoke City v Wigan match ( a cracking game, finished 2-2 with the visitors playing really well in 2nd half, after Stoke dominated the 1st half) that we'd had a Hanley Board meeting earlier in the day, and how much I'd enjoyed it. My guest seemed surprised that I didn't regard the meeting as a functional chore, but I emphasised the spectrum of topics under discussion and the energetic contributions from all 7 Directors around the table. I'm occasionally asked by Society members at our Customer Forums, what exactly do you talk about at Board meetings? so reflecting on yesterdays Board meeting, which was a fairly typical one, I recall diverse and important topics such as;
---- a review of our Key Performance Indicators to assess how we are performing against financial budgets in the first 4 months of our financial year 2012/2013.
---- consideration of the progress made on actions we agreed at our annual strategy day last May.
---- a discussion on how we are contending with current market conditions and key risks in our core markets.
---- a formal review of the Hanley's internal auditors.
---- a discussion on Board succession and recruitment plans.
---- an annual review of our policy on Equality and an annual report from our Money Laundering Officer
---- a discussion on the emerging "conduct risk" agenda as the FCA and PRA replace the FSA.
So quite a pot-pourri of subjects for us to do justice to , all embellished by the  vitality of Board members, keen to see the society continue to  thrive. .....and yes I really enjoyed it!  Crucially our Board meetings are challenging and honest. No hidden personal  agendas. No silo mentality. We also talked about contemporary standards of governance and the logic of inviting an external review by an expert on Board effectiveness.So no sign of complacency. Maybe that's another reason why I enjoy our  Board meetings so much.   

NORTH/SOUTH DIVIDE

The question I'm most often asked when people realise I work for a building society is; what do you think will happen to house prices? I've now become adept at  dodging the desired soundbite response by reminding my inquisitor that forecasting is very difficult, especially if it's the future you seek to forecast ! I have also tried to nuance my response with a reminder of how territorial the UK housing market is, and how London and the south east is practically another eco-system compared to our local housing market here in north Staffordshire. Recent Land Registry figures actually show that the north/south divide is widening; London house prices are up 7% over the 12 months to the end of  October while prices in the north east fell by 5.8%. In fact if you scope into prices in the London Borough of Kensington & Chelsea you will see average price rises of an eye-watering  15.9% in that period. Mortgage lending for house purchases in London is also disproportionately high, up 22% against an  average of +13% nationally, according to the Council of Mortgage Lenders' most recent figures. So the disparity in house prices in favour of  London is unlikely to fade anytime soon and  the north/south divide is a hallmark of the UK market. Which is one reason (but not the only reason) why local building societies like The Hanley have such a key part to play in making mortgage funds available to local housing markets, to such an extent that some of our products are specifically designed for the locality in which we were founded, and upon which our business success is so rooted.  Small, local mutuals like The Hanley can serve local customers with mortgage deals that are not available on a national scale.This is most notable in the first-time buyer market, where frankly we feel a responsibility to assist local people to get on that first rung of the homebuying ladder. So a modest 5% deposit can still be enough to obtain a Hanley mortgage for first time buyers in our heartland, despite what the national media may declare.So sometimes a fragmented, territorial market can have it's benefits, even if it makes that soundbite answer to the house-prices question much tougher to compose.      

BUILD IT AWARD

At The Hanley we have been active in the self-build lending market for a few years now and we have carved an impressive  niche by offering a bespoke service and a distinctive mortgage product to prospective borrowers keen to build their dream home. Last Thursday we attended the inaugural Build It award ceremony in Swindon and were announced at the lunch as Best Self Build Lender. We were thrilled to win such a prestigious accolade especially as the competition included other building societies with formidable reputations for innovation around the "green" agenda. The self build segment of the new housing market is blossoming and it is refreshing for us to be associated with such vibrancy.We do so in partnership with Buildstore the leading experts in this field (pardon pun) as this enables us to lend with our customary prudence and in full understanding of the project the customer has in mind. ( see www.buildstore.co.uk)  The Grand Designs image of self-build is a bit misleading as most people don't actually project manage themselves nor do they don wellies and wield a spirit-level. Most are content to employ experts throughout the process and are simply attracted by being able to influence the design and construction methods. One feature of our self-build lending is that it is widely spread across the country but I'm really hopeful we will soon be announcing that  The Hanley will be helping some local Stoke self-builders to fund their ambitions on some local plots. In many ways this is a contemporary version of what building society founders were doing 158 years ago, in helping local people to afford to build their own homes.

FUNDING FOR LENDING

It was pleasing to see several building societies listed in yesterday's announcement of the early adopters in the Bank of England's Funding for Lending scheme. The FLS is designed to boost lending to small businesses and to UK households by providing lenders with a funding source below the current  level of retail savings rates.With mutuals such as Ipswich, Principality and of course Nationwide on board the range of organisational scale across our sector is better represented than may have been expected and I know a number of smaller societies,including The Hanley, are considering future involvement. Hopefully the FLS will revitalise SME and micro-business funding as I know, from speaking to many business contacts locally,there is a pressing need for this segment of our economy to get a jump-start on new initiatives. Similarly it will be important for FLS to assist potential new mortgage borrowers with modest deposits.It would be a pity if the FLS simply became the catalyst for a remortgage price-war on sub 60% LTV lending. Of course no government intervention in the lending market is  guaranteed to combat the prevailing frailty of consumer confidence . Consumers  are understandably concerned about the gloomy clouds over the eurozone and about the future impact of austerity measures here in the UK. Seems to me that is why all of us in financial services should welcome all sincere efforts to boost new business levels , whether it is FLS or indeed the current Mail on Sunday campaign to allow the full ISA allowance to be placed in a cash ISA. It's easy to find fault with virtually any attempt to get that jump-start but consumer confidence will only jolt forward when we are crunching through the gears .        

GOLD MEDAL GREATNESS

22 Gold medals and still 4 days of competition to go, the Team GB performance has been electrifying. Personal favourites for me have been Sir Chris Hoy, Andy Murray and  Mo Farrah but the connectivity of the team and the dedicated focus of our athletes has been revelatory. But the jaw-droppingly, dazzling moments were provided by the American swimmer Michael Phelps, the most decorated Olympian of all time, not just for his gold-medal haul but for his grace and sheer class when he took silver behind Ryan Lochte in the 200m. Phelps and so many other gold medallists have reminded us what it takes to be an elite athlete, not just in terms of talent and dedication but also in the mental strength to deliver when it really matters. I knew I'd enjoy all this sport on TV. I said so on the morning of the Opening Ceremony when I was asked on BBC Radio Stoke's Friday review of the current news. I also said that the £9billion bill makes me twitchy at a time when austerity and cutbacks have taken their toll on grass-roots sport, and at a time when the economic recovery isn't expected anytime soon. I still feel that way. The Olympic party has been sensational but the hangover could be brutal. I hope the legacy of sporting success is a potent one and I hope many youngsters want to emulate their Olympic heroes, but  the regenerative impact of the games on cities outside London  is unproven and there is still so much to be done on infrastructure and skills in other segments of our economy.Sport may be able to lead the way on regeneration, but it may be just the sunniest bit of an otherwise deary summer. Certainly todays forecast by the Bank of England of zero economic growth in 2012 contrasted with the ebullience of the Olympics news, and jarred with the "can-do" mentality that we have found so attractive in Team GB.    

MEDIA MONDAY

Yesterday was a unique experience for me. I left home at 4am to get to Media City in Salford to appear on Radio5 Live's excellent show, Wake up to Money at 5.45am. An hour or so later and after a swift trip to a very genial make-up lady I made my national TV debut on BBC Breakfast. The topic under discussion was the behaviour of Claims Management Companies and the blizzard of bogus PPI claims that building societies are currently having to contend with, despite our recent complaint to the Minstry of Justice about the volume of "no sale" claims.  My trio of media moments was completed by an interview with Radio Scotland on the same topic, although I was very tempted to join in the discussion about Andy Murray's amazing efforts at Wimbledon the previous day. Reflecting on a very special start to my working week I have to admit the experience was a bit nervewracking but hugely enjoyable. I also found myself looking across the Salford Quays from the 2nd floor of the BBC building in admiration of the scale of regeneration that has been achieved there, and wondering why such an ambitious City-scape didn't happen in Stoke a few years ago when the will and the available capital seemed to be at a peak.