How Darlington Building Society went the extra mile for its 80,000 members during lockdown

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Adapting to an ever-changing world is part of what’s made Darlington Building Society a 165-year success story.

So while the country was reeling from the coronavirus outbreak, the Darlington-based mutual quietly and efficiently got on with what it’s always done – helping people across the Tees Valley and beyond save for their futures and buy their own homes.

“We’re very proud of the way we kept the business running,” said chief executive officer Andrew Craddock.

“We haven’t made anyone redundant or cut pay, we didn’t use the furlough scheme and we’re still recruiting.

“We were determined to continue supporting our members, many of whom are elderly and rely on cash rather than cards and online payments, so we kept the branch network open throughout, reducing hours and putting in additional measures to protect our staff and members.

“We gave mortgage payment holidays to more than 850 people to help see them through the crisis and we’ve committed to no repossession proceedings until next May.

“And we’ve also continued supporting the wider community through initiatives such as investing £20,000 in The Bread and Butter Thing, which has helped supply Darlington people with fresh food throughout the crisis.”

This three-pronged commitment to staff, its members and the local community has underpinned the Darlington’s philosophy ever since 1856.

The society exists for two reasons – to help people save for the future and to enable them to buy their own homes.

Around 70,000 members hold a wide range of savings accounts at its nine branches, which are all located within the TS and DL postcodes. A further 10,000 have mortgages, which are available nationwide direct to customers or through brokers.

“We take savers’ deposits, paying them a competitive rate of interest and keeping their money safe,” said chief customer officer Darren Ditchburn.

“We then lend to people looking to buy their own homes and make a return on those loans. Profits are either reinvested into the business or into our local community through various initiatives including our Five Per Cent Pledge to reinvest five per cent of our net profit into our local community each year.

“We’ve also helped in other ways by sharing our branch space with local charities, through staff volunteering in the community or supporting various organisations and charities.”

It’s this “sharing” ethos that sets building societies apart from their competitors, says Andrew.

“Everyone who saves or borrows £100 with us becomes a member when they open their account,” he explains.

“Members are invited to our annual general meeting where they can vote in directors and have a say in how we run the business.

“Mutuals have a far higher trust rating than banks. Because we don’t have shareholders who we would have to pay dividends to, we can invest back into the business and look after our members and provide better interest rates. That’s still highly valued.”

As well as keeping its branches open during lockdown, the society was also determined to offer a helping hand to members who might feel isolated or be struggling in other ways.

“Our staff always put our members at the heart of everything we do,” says Darren, who has worked his way up the ranks since joining his local branch in Redcar when he was 18.

“We’ve made more than 1,000 welfare calls to members who were isolating or shielding and might not have spoken to anyone other than us, to see if there was any way we could help them.

“We’ve been out to people’s homes, socially distancing on driveways, making sure they have access to their money.

“Not only have we kept branches open but we’ve now extended hours for people who are working from home and we’re one of the few financial institutions that’s open on a Saturday.

“When it comes to their life savings, people want to deal with someone they know and trust. We know the members who come into our branches as people and most of those phone calls were carrying on that regular conversation we have with them.”

While many lenders are currently holding back funds, the Darlington is doing all it can to continue helping people.

“One of the biggest barriers to home ownership is saving a deposit,” says Darren. “We’ve launched a mortgage with only a 10 per cent deposit. If it was available nationally we would be inundated, so we’ve restricted it to our local operating area to ensure local people continue to have access to low deposit mortgages.

“Our USP is that we personally underwrite all mortgages, so we have people making decisions on whether we lend money or not, not computers. We also do different types of lending, through both brokers and direct to customers, such as to older borrowers, selfbuild lending and mortgages for self-employed people.”

But to do all this good work, the society needs to be financially resilient. Andrew – who brought a lifetime of banking and building society experience to the Darlington when he took charge two years ago – is delighted to report a rosy financial picture.

“We have a balance sheet of just over £650m, with about £45m reserves that we don’t spend, so we’re very strongly capitalised with excellent liquidity,” he says. “We will make a profit this year, although not as much as last year, for obvious reasons.

“We don’t go out to make huge profits, we give as much back as we can to our members and the community, but we do remain profitable because we need to invest in the business.”

And while we’ve become used to hearing news of job losses, the Darlington recently advertised six new apprentice positions – and were so impressed with the 300 applicants that they ended up taking on eight instead.

“Darren joining us at 18 and rising through the company epitomises what we’re looking for in our staff,” says Andrew. “We want to promote from within and give staff opportunities to develop. That’s part of our commitment to this area.”

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