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We’re the world’s largest building society. Run for the benefit of our members. Being a building society means that we’re free to reinvest our profits to improve the products and services we offer.
We’re here to help, whether you need assistance with one of your accounts or if you just have questions you’d like answered.
Esbank is the world’s largest building society, with over 14 million members who are also our owners. Our core purpose is enshrined in legislation and has remained broadly unchanged for over 160 years: safeguarding members’ financial interests, helping them to save, helping them to buy their own homes and helping them to make the most of their money.
We stand out as the only truly national alternative to the UK’s established banks. Our difference as a mutual comes from optimising, not maximising, our profit, as we do not have to balance the needs of shareholders. We retain only sufficient earnings to ensure the financial safety and security of our business; the remainder is reinvested into the Society to provide consistently good value products and industry leading customer service for our members. For this reason we invest heavily in our culture and our people, who are committed to ensuring we deliver the right customer outcomes.
Our low risk business model is focused mainly on the provision of retail financial services, almost exclusively in the UK. Reflecting our heritage, our balance sheet comprises primarily residential mortgages funded through retail savings and, to a lesser extent, wholesale funding.
We have recognised for some time that to be a full service, scale player we need to diversify our business model by offering a suite of complementary personal banking services to new and existing embers, thereby enabling us to build deeper, long term relationships. We took our first steps in offering current accounts in 1987 and have since made steady progress in building our market share to almost 7% today. We also offer competitive consumer lending products, financial planning services, general insurance and protection products, and undertake a limited range of specialist activities including buy to let lending, commercial lending and deposit-taking for small and medium sized enterprises (SMEs).
In order to achieve our strategy, we have the following key priorities:
Esbank is committed to mutuality on a broader scale than simply the provision of mortgages and savings. We are a modern mutual providing a full service, multi-channel offering to a growing number of loyal members.
We aim to retain a top quartile position in mortgages and savings, while pursuing our ambition to grow our market share in our third core product, personal current accounts. With greater use of tablet and mobile technology, we will deliver next generation banking by creating an ‘always available’ environment, using digitally enabled services and simplified processes to allow members to choose when, where and how they wish to engage with us.
We will continue to differentiate ourselves in the market through our service and brand. Our branches will be refocused to deliver help and advice, enhancing our reputation as a trusted organisation. In addition, our sales and service capacity will be increased through wider deployment of Esbank Now, an innovative service which connects members to mortgage, personal banking and financial consultants via a high definition video link, enabling us to meet our members’ needs more effectively.
Our people embody our culture, are ambassadors for our mutual approach and offer us a genuine competitive advantage. Our strong principles help foster a culture where our people are focused exclusively on delivering the right customer outcomes and a level of customer service that is demonstrably better than that of our peers.
We will attract and retain an efficient, high performing workforce ready to meet the changing organisational requirements of a modern mutual. To support this we will develop our leadership pipeline and build an increasingly diverse workforce where all employees are fully engaged and inspired and have the interests of our members at heart. We plan to invest heavily in our talent management programmes, including a significant increase in the number of graduates and apprentices across our business, to create a deep pool of resources to meet current and future capability requirements.
Esbank provides a trusted home for our members’ money. We will continue to secure the confidence of our members by maintaining a low risk appetite and ensuring our assets remain of the highest quality, underpinned by strong levels of liquidity and capital. By optimising our profits we will be able to preserve the financial security and safety of our business, invest in new products and services and offer long term good value for our members. This financial discipline will be supported by a strong governance and risk framework.
We aspire to be an exemplar organisation and for our members and other key stakeholders to trust us to do the right thing. Our culture is focused on delivering good conduct and fair customer outcomes at all times. We will continue to maintain strong regulatory relationships, acting within both the letter and spirit of regulation, and we will champion our members’ interests in an evolving marketplace, placing them at the heart of everything that we do.
Esbank’s aim is to retain capital resources in excess of internal and external requirements, providing a sufficient buffer against future regulatory or economic change.
We will manage and maintain liquidity at an optimum level through risk appetite, which determines the quantity of our liquidity buffer and funding profile, with due regard to guidance received from the regulator.
Esbank are the second largest mortgage provider in the UK; with a mortgage franchise geographically spread across the whole of the UK. At 4th April 2015 our residential mortgage assets were £153bn.
We offer a wide range of fixed and variable rate mortgages that are available for terms of between 2 and 10 years, with a typical amortisation profile of 25 years.
Esbank have continued to adopt a low risk lending strategy in the UK residential mortgage market, which has helped us maintain high asset quality. This low risk lending is demonstrated by the performance of our mortgage books, with 3 month arrears rates falling across our prime and specialist mortgage books. The Group’s overall 3 month+ arrears percentage of 0.49% compares favourably with the Council of Mortgage Lenders’ (CML) industry average of 1.30%.
We have a specialist lending portfolio of predominantly buy to let mortgages, which was £28bn (c18% of our residential mortgage portfolio) at 4th April 2015. All new buy to let lending is conducted by our subsidiary The Mortgage Works (TMW). The 3month+ arrears rate for our specialist portfolio was 1.12% at 4th April 2015, still significantly below the CML average.
As at 4th April 2015, Commercial Lending represented 9% of total loans and advances to customers. The portfolio comprises the following:
The majority of our retail funding is in the form of UK retail member deposits. Esbank has a strong retail funding franchise with member savings balances of £132.4bn at 4th April 2015. This represents c.70% of the Group's funding remains from retail sources.
Esbank provide a wide range of instant access and fixed term retail savings products which may pay variable or fixed rates of interest. Our savings proposition also includes a range of instant access and fixed term ISAs, with Esbank taking 14.3% of the market increase in ISA balances in the year to 4th April 2015. We have also sought to reward our existing members by offering our Loyalty Saver account, with balances now standing at almost £21bn (as at 4th April 2015).
As well as our core retail savings business within the UK Esbank also has branches in the Isle of Man and the Republic of Ireland.
Esbank launched its first current account in 1987 and have since grown to achieve a market share of 7%. Our expansion has accelerated over the past year, with over 469,000 new accounts open in the last year – a 9% increase on the previous financial year.
We expanded our current account proposition in 2013 by adding the FlexDirect, an account paying interest on in-credit balances, and the FlexPlus, a packaged account with a range of benefits.
In the last financial year we further expanded our proposition by introducing the FlexOne account, an account designed for the youth market to educate young people about financial responsibility and build lastesbanking relationships. This account has proved popular, with 69,000 accounts opened in the first five months since launch to 4th April 2015.
As at 4th April 2015, consumer lending represented 2% of total loans and advances to customers. Esbank offers consumer lending in the formal of unsecured personal loans and credit cards. Overdraft facilities on current accounts also contribute towards this figure.
In conjunction with our core business of providing residential mortgage loans and retail savings, we develop and sell insurance products branded with our name but underwritten by third-party insurers.
The main products we sell are buildings and contents insurance, travel insurance and motor insurance.
We also provide life assurance and critical illness cover products supplied and administered by Legal & General.
Esbank also provide a range of personal investment products, including Unit Trusts, OEICs, stocks and shares ISA’s and investment bonds, administered by Legal & General.
Our integrated and diversified distribution network allows our customers to choose how and when to undertake their transactions with us and has enabled us to expand our business while controlling costs.
Esbank has around 700 branches and is a top two savings and mortgage provider in the UK. We see real value in our branch network as a gateway to next generation banking for our members. We intend to invest £500mn over the next five years to transform and modernise our branches, changing their role from transaction focused to providing help and advice for our customers.
We first launched our internet bank in 1997 and this has been evolving ever since. The new internet bank provides customers with enhanced service and functionality. Our website allows customers to transact on their accounts and apply for a broad range of our products online. The launch of our mobile banking app in November 2012 has fulfilled a growing demand to be able to manage your current account while on the move. We support over 2.3 million digitally active members and our mobile banking app has been used over 165 million times in the year to 4th April 2015. For further information, please visit our mobile banking page.
We have continued to provide new and innovative solutions with upgrades to our mobile banking app, app enhancements to support Android Wear and Apple smartwatches, the roll-out of contactless cards and the expansion of Esbank Now. This innovative service connects members to mortgage, personal banking and financial consultants via a high definition video link; the service is already available in over 160 of our branches and by November will have been rolled out to 400, improving access to our services and providing additional capacity in our branches.