Summary of our AGM 2020 – ‘Society well-placed to weather the economic storm around COVID-19’

Well, this year’s Annual General Meeting will certainly go down in the Society’s history books as our most unusual ever.

Normally, it is a highlight of our calendar that we look forward to as a key opportunity to get together with our members and other friends of the Society.

However, the COVID-19 coronavirus pandemic has forced us to dispense with all that in 2020 and hold our AGM behind closed doors, with just a handful of our team present and our Board ‘attending’ by video link.

Thanks to all our eligible voting members who recognised and respected our decision to hold the event in private, as well as taking the opportunity to vote online and submit questions to us via email.

As outlined in our Member Review magazine and voting pack, we will be donating 50 pence for each vote cast to the Martin House

children’s hospice (£501.50). We are also passing on the £500 we would normally have spent on providing a buffet at our AGM event, to the Royal Voluntary Service charity’s vital work co-ordinating support for the 1.5 million vulnerable and elderly people across our region currently self-isolating to protect themselves against the coronavirus pandemic.

This year’s voting results

Resolution Result

1. To receive the Annual Report & Accounts 97.89%

2. To appoint PricewaterhouseCoopers LLP as auditors 95.46%

3. To elect Esther Elaine Morley 95.74%

4. To re-elect Martin Robert Cocker Please see note * below

5. To re-elect Michael Richard Heenan 95.06%

6. To re-elect Susan Ann Symington 95.26%

7. To re-elect Karl Jeffery Dixon Elliott 95.26%

8. To approve Directors’ Remuneration Report 90.67%

• The resolution to approve Martin Cocker’s re-election was withdrawn following his decision to step down from the Board from 31 March, to take up other opportunities. The Chairman and the Board expressed their thanks for his work for the Society and wish him well.

Your questions – answered

1. Could the directors please comment on the effect that the virus-induced economic depression is considered likely to have on the Society’s investments, its cash reserves and the security values on the mortgages advanced, and what mitigating steps can be taken?

Response from Finance Director and Deputy Chief Executive Janet Bedford

· In terms of its investments: all the Society’s treasury assets are materially invested in the Bank of England, which is deemed the most secure place to invest at any time but particularly at a time of recession

· Cash reserve: UK-wide, there have been inflows into saving accounts during the pandemic, a Financial Services Compensation Scheme-protected cash deposit is seen as a place of safe harbour when there is significant volatility in other investment classes such as the stock markets. The Society has also seen inflows of savings, which has increased our cash reserves

· Security values on mortgages: Generally, it is expected mortgage impairment charges in the UK will increase during the pandemic and the predicted economic recession, due to reduced mortgage affordability and potentially reduced housing valuations. This is likely to affect almost all financial institutions. That said, the Society does have one of the lowest loan-to-value (LTV) ratios in the sector, meaning that, on average, we hold more security against our loan portfolio than our peers. Under our lending policy, we also purchase mortgage indemnity insurance on any mortgage with a LTV of more than 80 per cent. These factors should help to protect us during potentially difficult economic times

· Mitigations: There are several tools available to our management team, to help us maintain a financially secure position – the most significant ones being the ability to alter our mortgage and savings rates in line with market trends and carefully managing our costs.

2. I would be interested to know your current thinking about lifetime mortgages and whether there will be a cut in mortgage interest rate given the Bank of England base rate being reduced to 0.1 per cent

Response from Risk Director Mark Marsden, and Janet once again

The Society does not offer lifetime mortgages. These are a specialist niche product requiring specific qualifications and

regulatory permissions which the Society has never sought to hold, and has no current plans to pursue.

With regards to mortgage interest rates, we offer two different types of mortgages – historic tracker and standard variable rate (SVR)-linked mortgages. Tracker mortgages have been reduced to reflect the latest base rate. Our SVR-linked mortgage rate is currently still under review. It should be noted, however, that due to previous Society SVR reductions, we had a lower-than-average SVR and therefore, to some extent, competitor reductions are bringing their SVR rates closer to our own. That said, we clearly need to remain competitive in our product offerings and you can be assured we will continue monitoring the market closely.

3. As quite new members of the Society, we have no questions to ask. We would, however, like to say how much we appreciate the staff we have dealt with at the branch and the friendly and efficient way our accounts were set up/transferred. Take care, stay safe.

On behalf of our entire Board, Chief Executive Karl Elliott thanked this member for their comments.

NB. Please note that we have chosen not to publish the names of the members who submitted questions, in order to protect their privacy.

Thanks to our members for their contribution to this year’s virtual AGM

Society Chief Executive, Karl Elliott, said: “This year’s AGM was certainly surreal but, while we hope we never have to run it in this way again, I want to say a huge thank you to our members for enabling us to capture the essence of the event online by voting and submitting their questions.

“We really missed the opportunity to chat to our members in person this year, but are hoping to arrange another event later

this year – subject to developments in the fight against COVID-19 – to give us chance to see them face-to-face.”

Keep an eye on our website for a full transcription of our AGM 2020 proceedings and updates about the Society in general, and future meeting plans. If you have any questions, please contact us via email or call us on (01482) 881510

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