Yorkshire BS is UK’s most productive mutual – as UK’s most efficient building societies are ranked

Yorkshire Building Society is the most efficient in the UK according to new research from fintech Target Group.

The analysis, conducted by the software and digital transformation provider, examined the annual reports of building societies with combined total assets of almost £550bn, employing more than 30,000 Full-Time Equivalent (FTE) employees.

Target found that, as an industry, building societies have on average, £18.1m of assets per member of staff employed.

Those judged to be Tier 1 societies, with more than £10bn of assets each, had an average of £20.0m worth of assets per employee.  Within this tier, there were variation, however: while Yorkshire Building Society had £28.3m worth of assets per employee, Newcastle only had £10.8m.

In Tier 2 societies, with between £1bn and £10bn of assets, the average value of assets per employee was approximately £9.5m.  In this tier, Progressive had £14.4m worth of assets per employee whereas Cumberland had just £6.7m.

The average value of assets per employee was approximately £7.9m in Tier 3 societies – i.e. those with between £500m and £1bn of assets.  The most efficient mutual of this size was Swansea with £10.4m worth of assets per employee, compared to the Mansfield with £6.0m.

The smallest niche building societies, with fewer than £500m of total assets, have £7.2m worth of assets for every employee – with Stafford Railway, the most efficient, having £10.1m and the Ecology having £5.3m.

Target Group’s Melanie Spencer said: This is a crude measure. But the ratio of assets to employees strikes at the heart of the issue of automation in the sector – of building societies’ willingness or otherwise to adopt technology to improve their productivity.  You’d expect the largest societies to be the most efficient since they’re enjoying the biggest economies of scale. But our research highlights that this isn’t necessarily the case.  Nottingham is a large operation, with total assets of £5.2bn, but it employs 510 people – that’s £10.3m worth of assets per employee.  That’s a similar ratio to Stafford which only has £25m worth of assets.  At the other end of the spectrum, Nationwide’s total assets are three times greater than Yorkshire’s – but their workforce is five times the size.  A lot of this is down to digital transformation.  Some societies have invested so they can do more with less while others have not.  That’s somewhat concerning for the sector given that societies need to be embracing digital transformation and addressing legacy systems.  Technology is going to be absolutely critical for long-term success of the mutual movement.  If mutuals don’t adopt emerging technologies, they’ll fall behind.”

Building SocietySociety Assets per employee (£)
Nationwide18,929,234
Yorkshire28,276,173
Coventry26,777,778
Skipton15,331,938
Leeds18,505,841
Principality11,358,367
Newcastle10,847,682
West Bromwich11,691,089
Nottingham12,901,478
Cumberland6,695,833
National Counties (Family)11,693,333
Progressive14,379,310
Cambridge8,536,170
Monmouthshire7,203,390
Newbury10,714,286
Saffron7,459,596
Furness9,058,442
Leek United7,500,000
Darlington6,211,921
Suffolk9,295,918
Market Harborough8,630,000
Hinckley & Rugby6,933,333
Marsden9,950,000
Scottish9,036,585
Melton Mowbray (Melton)6,239,316
Swansea10,358,209
Dudley7,756,098
Tipton & Coseley7,360,465
Loughborough7,722,222
Mansfield, The6,021,978
Hanley Economic7,764,706
Vernon7,027,778
Harpenden5,423,077
Chorley & District, The6,766,667
Bath Investment5,625,000
Teachers6,180,328
Buckinghamshire8,204,545
Ecology, The5,349,206
Stafford Railway (Stafford)10,125,000
Beverley9,291,667
Earl Shilton*7,826,087
Penrith7,350,000

The research found that the most efficiently run societies, which outperformed in terms of their size were Stafford Railway (Stafford), Beverley, and Earl Shilton.  At the other end of the spectrum were Cumberland, Monmouthshire, and Darlington.

Target says despite their relative outperformance, many of the smaller less efficient societies need to overhaul their transformation strategies which have hitherto been too cautious.

Mel Spencer said,To survive in the coming decades, many of the smallest building societies will need to hire a CIO. And they must look at adopting cloud core systems as a service as a matter of urgency, rather than attempting to maintain their out-dated legacy technology.  Leaving it any longer risks failing to deliver for a new generation of savers and borrowers.


Related Articles

Sign up to the IFA Newsletter

Name

Trending Articles


IFA Talk is our flagship podcast, that fits perfectly into your busy life, bringing the latest insight, analysis, news and interviews to you, wherever you are.

IFA Talk Podcast – listen to the latest episode

IFA Magazine
Privacy Overview

Our website uses cookies to enhance your experience and to help us understand how you interact with our site. Read our full Cookie Policy for more information.