Skipton Building Society
Encyclopedia
The Skipton Building Society is a building society
in the United Kingdom
(also known as a mutual
lending and savings organisation as it is owned by the members). It is a member of the Building Societies Association
.
The Society was established in 1853 in Skipton
, North Yorkshire
, where it remains headquartered. It is the UK's 4th largest building society and has over 850,000 members and 103 branches. Its pre-tax profit was £63.5 million for 2009.
The Society has 19 subsidiary companies, mostly in the financial services industry. Together they form the Skipton Group of companies.
In 2010, it merged with the Chesham Building Society
, founded in 1845, which was at the time the world's oldest surviving building society.
David Cutter is chief executive of the Society, following the retirement of the former chief executive, John Goodfellow, on 31 December 2008.
on 31 March 2009.
The Scarborough Building Society had encountered difficult trading conditions which had a significant impact on profitability and a weakening of the Society's resources. As a result the board of The Scarborough concluded the effect of continuing UK house price instability and growing prospect of recession
, the best way to protect its members' interests would be to seek a buyer.
Scarborough's former Chief Executive, John Carrier, retired on 31 December 2008.
After the take over, all employees from the original Scarborough Building Society were made redundant and the headquarters was moved to Skipton.
On 1 June 2010 the building society merged with the Chesham Building Society
following the latter's financial difficulties.
When Skipton announced it was taking over the Scarborough Building Society in November 2008 society chiefs told staff no jobs would be lost compulsorily in the process. However just months after the assurances 30 Scarborough jobs were lost when the societies merged and it made public on 27 January 2010 that a further 90 job losses are in the pipeline.. The Scarborough Building Society site was initially occupied by Skipton subsidiary HomeLoan Management Ltd.
The Skipton reneged on its promise to keep the SVR tracker no more than 3% above base rate citing an "exceptional circumstances" clause in their agreement, potentially putting thousands of borrowers out of pocket. On 4 March 2009 Skipton CEO reiterated that Skipton had made the 3% pledge and would keep it.
Skipton angered borrowers on its standard variable mortgage rate (SVR) by backtracking on this promise. A petition was started against the rate rise, against which it is reported that the Society faces a legal challenge. High profile objectors to the rise include Which?
, also known as the Consumers' Association
whose chief executive, Peter Vicary-Smith said, on 21 January 2010 "We can't see any justification for this unexpected hike in Skipton's SVR", the Daily Mail
, whose personal Finance Editor Jeff Prestridge, said on 30 January 2010 "Financial Mail maintains Skipton's abandoning of its SVR guarantee is indefensible" and Martin Lewis
, MoneySavingExpert.com
founder, who said on 18 February: "This sort of irresponsible rate rise destroys any faith the public has in the mortgage system."
Skipton faces a heavy fine from the Financial Services Authority
after a serious breach of data security resulted in over 3,000 savers receiving financial details about other customers. When Skipton mailed 108,000 account statements to savers on the weekend of 23–24 January 2010, 3,115 went out with the name, account number, balance and interest earned in the previous year of different customers printed on the reverse of the letters. This follows an Information Commissioner's Office finding, in 2008, that Skipton was in breach of the Data Protection Act, following the theft of an unencrypted laptop left at a gym. The unprotected information lost included names, dates of birth, national insurance numbers and investment amounts of 14,000 customers.
Skipton Building Society was featured in the "In The Back" section of Private Eye Magazine in June 2005 after it failed to disclose a £30 million loss at CallCredit, a subsidiary company, and the purchase of a £3.5 million core IT systems from a loss making IT company which it subsequently had to rescue at the cost of £10 million of members' money.. Despite SBS's involvement the IT company has continued to suffer a loss (http://blackshipping.com/371847/falling-sales-take-a-toll-on-jade).
Skipton Building Society indirectly own a number of "sub prime" lending companies, mainly created during the "Goodfellow" years. One of these subsidiaries, "Amber Homeloans" (previously Skipton Mortgages Limited) closed to new business in 2008 with the message that new business would not be accepted and that the company had grown "Too big, too quick" with around £1,500,000,000 of "assets". It is not known how any re-evaluation on these assets, based upon current market conditions or any sales of mortgages books, would affect the balance sheet of SBS. (www.amberhomeloans.co.uk August 2008)
Building society
A building society is a financial institution owned by its members as a mutual organization. Building societies offer banking and related financial services, especially mortgage lending. These institutions are found in the United Kingdom and several other countries.The term "building society"...
in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
(also known as a mutual
Mutual organization
A mutual, mutual organization, or mutual society is an organization based on the principle of mutuality. Unlike a true cooperative, members usually do not contribute to the capital of the company by direct investment, but derive their right to profits and votes through their customer relationship...
lending and savings organisation as it is owned by the members). It is a member of the Building Societies Association
Building Societies Association
The Building Societies Association is the trade organisation of the building societies in the United Kingdom. In 2011 the 48 building societies in the UK had total assets of over £317 billion. 15 million adults have building society saving accounts and over 2.9 million adults are currently buying...
.
The Society was established in 1853 in Skipton
Skipton
Skipton is a market town and civil parish within the Craven district of North Yorkshire, England. It is located along the course of both the Leeds and Liverpool Canal and the River Aire, on the south side of the Yorkshire Dales, northwest of Bradford and west of York...
, North Yorkshire
North Yorkshire
North Yorkshire is a non-metropolitan or shire county located in the Yorkshire and the Humber region of England, and a ceremonial county primarily in that region but partly in North East England. Created in 1974 by the Local Government Act 1972 it covers an area of , making it the largest...
, where it remains headquartered. It is the UK's 4th largest building society and has over 850,000 members and 103 branches. Its pre-tax profit was £63.5 million for 2009.
The Society has 19 subsidiary companies, mostly in the financial services industry. Together they form the Skipton Group of companies.
In 2010, it merged with the Chesham Building Society
Chesham Building Society
The Chesham Building Society was a building society based in the market town of Chesham in Buckinghamshire, England which merged with the Skipton Building Society on 1 June 2010. Prior to the merger it was the 37th largest building society in the United Kingdom based on its total assets of £231...
, founded in 1845, which was at the time the world's oldest surviving building society.
David Cutter is chief executive of the Society, following the retirement of the former chief executive, John Goodfellow, on 31 December 2008.
Acquisitions
The Skipton Building Society bailed out the former Scarborough Building SocietyScarborough Building Society
Scarborough Building Society was a UK building society, which had its headquarters in Scarborough, North Yorkshire, England. Scarborough Building Society was formed in May 1846 - It was a member of the Building Societies Association....
on 31 March 2009.
The Scarborough Building Society had encountered difficult trading conditions which had a significant impact on profitability and a weakening of the Society's resources. As a result the board of The Scarborough concluded the effect of continuing UK house price instability and growing prospect of recession
Late 2000s recession
The late-2000s recession, sometimes referred to as the Great Recession or Lesser Depression or Long Recession, is a severe ongoing global economic problem that began in December 2007 and took a particularly sharp downward turn in September 2008. The Great Recession has affected the entire world...
, the best way to protect its members' interests would be to seek a buyer.
Scarborough's former Chief Executive, John Carrier, retired on 31 December 2008.
After the take over, all employees from the original Scarborough Building Society were made redundant and the headquarters was moved to Skipton.
On 1 June 2010 the building society merged with the Chesham Building Society
Chesham Building Society
The Chesham Building Society was a building society based in the market town of Chesham in Buckinghamshire, England which merged with the Skipton Building Society on 1 June 2010. Prior to the merger it was the 37th largest building society in the United Kingdom based on its total assets of £231...
following the latter's financial difficulties.
Controversies
John Goodfellow's annual paypacket of £630,000 was the highest for any Building Society chief. In 2008 Goodfellow received £1,244,000. He was also allowed to accrue pension benefits in the Skipton Building Society Pension & Life assurance Scheme until the end of 2009. Skipton waived any early retirement discount factors applicable to his benefits in the scheme, enabling him to access his £2.3 million pension pot from 10 January 2010 without fear of any penalty. Goodfellow later became Chairman of the UK Student Loans Company and was subsequently required to resign by the government after various failures at that organisation (various press. 2010). Goodfelow's tenure was characterised by increasingly risky debt and was replaced by a movement to more core activities, reversing Goodfellow's policies (although this trend was followed by many other financial institutions).When Skipton announced it was taking over the Scarborough Building Society in November 2008 society chiefs told staff no jobs would be lost compulsorily in the process. However just months after the assurances 30 Scarborough jobs were lost when the societies merged and it made public on 27 January 2010 that a further 90 job losses are in the pipeline.. The Scarborough Building Society site was initially occupied by Skipton subsidiary HomeLoan Management Ltd.
The Skipton reneged on its promise to keep the SVR tracker no more than 3% above base rate citing an "exceptional circumstances" clause in their agreement, potentially putting thousands of borrowers out of pocket. On 4 March 2009 Skipton CEO reiterated that Skipton had made the 3% pledge and would keep it.
Skipton angered borrowers on its standard variable mortgage rate (SVR) by backtracking on this promise. A petition was started against the rate rise, against which it is reported that the Society faces a legal challenge. High profile objectors to the rise include Which?
Which?
Which? is a product-testing and consumer campaigning charity with a magazine, website and various other services run by Which? Ltd ....
, also known as the Consumers' Association
Consumers' Association
The Consumers' Association is the umbrella organisation that houses the trading arm Which? Ltd. The Consumers' Association is a charity, registered in England and Wales No 296072. Which? Ltd is its wholly owned trading subsidiary....
whose chief executive, Peter Vicary-Smith said, on 21 January 2010 "We can't see any justification for this unexpected hike in Skipton's SVR", the Daily Mail
Daily Mail
The Daily Mail is a British daily middle-market tabloid newspaper owned by the Daily Mail and General Trust. First published in 1896 by Lord Northcliffe, it is the United Kingdom's second biggest-selling daily newspaper after The Sun. Its sister paper The Mail on Sunday was launched in 1982...
, whose personal Finance Editor Jeff Prestridge, said on 30 January 2010 "Financial Mail maintains Skipton's abandoning of its SVR guarantee is indefensible" and Martin Lewis
Martin Lewis (financial journalist)
Martin Steven Lewis is journalist, television presenter, website entrepreneur and author in the United Kingdom, who specialises in ways to save money...
, MoneySavingExpert.com
MoneySavingExpert.com
MoneySavingExpert.com is a British consumer finance information and discussion website founded and owned by financial journalist Martin Lewis in February 2003 with the aim of providing information and journalistic articles enabling people to save money....
founder, who said on 18 February: "This sort of irresponsible rate rise destroys any faith the public has in the mortgage system."
Skipton faces a heavy fine from the Financial Services Authority
Financial Services Authority
The Financial Services Authority is a quasi-judicial body responsible for the regulation of the financial services industry in the United Kingdom. Its board is appointed by the Treasury and the organisation is structured as a company limited by guarantee and owned by the UK government. Its main...
after a serious breach of data security resulted in over 3,000 savers receiving financial details about other customers. When Skipton mailed 108,000 account statements to savers on the weekend of 23–24 January 2010, 3,115 went out with the name, account number, balance and interest earned in the previous year of different customers printed on the reverse of the letters. This follows an Information Commissioner's Office finding, in 2008, that Skipton was in breach of the Data Protection Act, following the theft of an unencrypted laptop left at a gym. The unprotected information lost included names, dates of birth, national insurance numbers and investment amounts of 14,000 customers.
Skipton Building Society was featured in the "In The Back" section of Private Eye Magazine in June 2005 after it failed to disclose a £30 million loss at CallCredit, a subsidiary company, and the purchase of a £3.5 million core IT systems from a loss making IT company which it subsequently had to rescue at the cost of £10 million of members' money.. Despite SBS's involvement the IT company has continued to suffer a loss (http://blackshipping.com/371847/falling-sales-take-a-toll-on-jade).
Skipton Building Society indirectly own a number of "sub prime" lending companies, mainly created during the "Goodfellow" years. One of these subsidiaries, "Amber Homeloans" (previously Skipton Mortgages Limited) closed to new business in 2008 with the message that new business would not be accepted and that the company had grown "Too big, too quick" with around £1,500,000,000 of "assets". It is not known how any re-evaluation on these assets, based upon current market conditions or any sales of mortgages books, would affect the balance sheet of SBS. (www.amberhomeloans.co.uk August 2008)
External links
- Skipton Building Society
- The Skipton Group
- Building Societies Association
- KPMG Building Societies Database 2008
- [h ttp://www.kpmg.co.uk/pubs/153361Accessible1.pdf KPMG Building Societies Database 2009]
- Annual Results for FYE 31 Dec 2008