Darlington Building Society has posted strong results after rising to the unprecedented challenges of the pandemic. Chief executive Andrew Craddock talks to Peter Barron…
During a career spanning 36 years in banking, Andrew Craddock has come through challenging times before – not least the global financial crash of 2008. But Darlington Building Society’s chief executive doesn’t hesitate in describing the past year as the toughest of all.
“With the financial crisis 13 years ago, we knew the impact it was having. It was a mess, but we could see how to get out of it. This time, it’s the huge uncertainty that’s made it so hard for people in different ways.”
Then, just a minute into the interview, Andrew interjects with questions of his own: “How’s it affected you? Are all your family OK?”
It’s typical of the man, underlining why his own staff recently voted for him, without his knowledge, as Inspirational Leader of the Year in the society’s annual awards, in recognition of the care he showed staff, members and the local community throughout the pandemic.
From the beginning of the first lockdown, staff were given a raft of reassurances: the society would not use the government’s job retention furlough scheme, there would be no redundancies for the year ahead, and everyone would be kept on full pay, irrespective of whether they were able to work full-time.
The staff responded by going the extra mile for members: making calls to check on those who were isolated, keeping branches open, albeit on reduced hours, and maintaining services. Indeed, there was only one day when a branch had to close due to a positive test, at Northallerton.
And, in the darkest days of the pandemic, the society reinforced its support of local communities by extending its annual pledge to donate five per cent of profits to good causes until 2025.
On all fronts – staff, members, and community – it has been an exemplary performance, now capped by robust financial results that Andrew describes as “a testament to the way the staff pulled together in unprecedented circumstances”.
Total assets rose from £666m to £705m, propelling Darlington Building Society into the UK’s top 20 biggest building societies. Pre-tax profits fell from £1.77m in 2019 to £0.73m but remained remarkably healthy despite four main factors: the housing market effectively closing during the first lockdown, two Base Rate reductions by the Bank of England, increased costs due to investment in staff and technology and additional funds being set aside to cover increased bad debt provisions resulting from the pandemic.
“It’s been the hardest year I’ve ever known, and I couldn’t be prouder of the staff – it’s been humbling,” says Andrew. “As we were going into the first lockdown, there was a lot of anxiety, and the board’s priority was to alleviate those fears.”
The first decision was to remain open for business without using the government’s furlough scheme. “We are a resilient organisation, with strong reserves, and it wouldn’t have been right to take advantage of taxpayers’ money,” says Andrew.
That positive message was relayed to staff, along with the assurances about job security and pay, while preparations were quickly made to equip 95 per cent of the staff to work from home, screens were installed in branches and personal protection equipment supplied.
“Acts of kindness” were also introduced, such as employees being sent thank you gifts. Staff were also regularly brought together for online social events, and initiatives to support mental health were put in place.
The caring approach was recognised when the society was awarded an “outstanding” two-star rating by Best Companies, based on a survey of employees.
Remarkably, despite the prolonged economic uncertainty, the society also continued to invest in the future, recruiting additional staff, including eight apprentices, and supplying teams with improved technology.
“Instead of pulling up the drawbridge, the board backed further investment, to make the business fit for the future,” says Andrew.
He recalls being moved by an unsolicited email from a young member of staff, who had joined the society after being made redundant from a previous job. It concluded: “I would like to say a big thank you for putting our health and livelihoods first…and thank you for helping me to get back on my feet.”
Meanwhile, the society’s support for the community was stepped up, with staff volunteering in a range of ways, including acting as marshals at Covid-19 vaccination centres and as Age UK befrienders.
Sixteen community organisations shared over £77,000 from the five per cent pledge. On Teesside, the grants included nearly £15,000 to the Daisy Chain Project, to pay for a large polytunnel to enable autistic people to grow their own produce. Another example of the difference being made on Teesside was a £4,550 donation that enabled Teesside Hospice to buy a new bladder scanner.
“We are not just here to make a profit,” says Andrew. “We remain committed to being part of the fabric of our communities.”
Inevitably, there are concerns about the economy, the dependency on the success of the vaccination programme, and the need for continued government support, but he remains confident the society will carry on the good work in 2021.
The benefits of investing in technology will be seen by members in the next few months, including a more efficient telephone system, an updated brokers’ platform and a new payment system to make it easier for customers.
Northallerton was the latest branch to be refurbished, last year, and Redcar branch will relocate to a more prominent, central location in the spring, followed by Bishop Auckland branch moving to a higher profile site in the autumn. Both will have disabled access. With the latest refurbishments due to take place at Darlington, Stockton and Middlesbrough, all nine branches will have been given a fresh new look by the end of the year, before the search begins for new branch locations in 2022.
“Thanks to a tremendous team effort, we’re in a really strong position, with ambitious plans to provide an even better service for members, look after our staff and support our communities – and that makes me incredibly proud,” says Andrew.
There’s no hiding from the fact that 2021 will bring further challenges but, 165 years after it was founded, Darlington Building Society remains passionate about making a difference.
You can bank on that.
Members have been sent Darlington Building Society’s Members’ Review for 2020 including a Summary Financial Statement, and are being urged to take their opportunity to vote online or via post before the virtual AGM on April 26.