Welcome to my May Monthly Digest.

I hope you are all well. Since the latest digest I sent in February, it’s fair to say that a lot has changed in the world….!

I don’t intend to dwell too much specifically on Covid-19 and the impact on operations in this message, as I have sent you lots on that topic just recently. I will continue to keep you updated with separate messages as we work our way through what are unprecedented times. However, it has had a huge impact on both your business and ours, so it would be impossible for it not to crop up in the ‘usual’ topics below of savings, mortgages, community and network updates as we gradually start to adjust our thoughts back towards some kind of ‘Business as Usual'.

Savings

As you would expect with a worldwide pandemic and 2 BoE base rate cuts resulting in the lowest ever rate of 0.1%, the savings market is proving challenging at present. However, we’re confident that we can still trade well in this environment. This is based on the adaptations we have made to our plans, and the extra support we have been able to provide to both customers and colleagues.

More on savings 

There’s a quick summary below:

• We’ve seen savings rates falling across all providers following the BoE rate cut and are possibly starting to see rates stabilise for a period, but this will all depend on the lockdown economy which is virtually impossible to predict.
• We’ve revised all of our latest views of our short-term performance, reducing our balance expectations. We’re taking a more detailed look at the medium to long-term view at the moment: 
  
  • We’ve reduced our savings new money expectations – we’re performing below the re-forecasted level at the moment as the lockdown continues
  • We forecasted, and have seen, an increased level of balances leaving the business, albeit not at the level we thought might happen based on the behaviours pre-lockdown, which is positive
  • However, we’ve also seen strong levels of fixed rate retention for the April maturity (more on May below), supported by a product rate set before the lockdown and above most competitor rates at this time.

We’ll of course need to monitor the performance closely and update our approach if we need to. We’ll continue to look at different solutions to try to make sure you and your teams have the right support to help customers look after their savings, without them necessarily having to visit us. E.g:

• New variable products have been launched to provide customers with options
• Changes to the maturity letters to reduce the customers visiting agencies in person as a first port of call
• Increased outbound calling to maturity customers to reduce face to face contact and retain funds where possible
• New e-form to allow customers to request product information/literature direct from their local agency.

The May maturity was large (c.£960m) and due to the fluctuations in the money markets at the time the retention was priced, the maturity default rate is just 0.40%. The on-sale range is reasonably competitive for our branch/agency customers and should give some good options for our maturing customers when we contact them to discuss it.

Early signs are positive that the calls/e-forms have had the desired effect of helping customers manage their maturity whilst helping with social distancing. The same support will be available for the maturities at the end of June, as well as the Annual Access Accounts which mature over the coming months.

Mortgages

The mortgage market has been dramatically hit by the Covid-19 situation. In the last few weeks, house purchases have been pretty much off limits with prospective buyers unable to view properties and Valuers unable to carry out valuations. Estate agents have been closed and so unsurprisingly the number of new properties listed for sale has fallen dramatically. Although, following the recent announcements on the News, we may see this slowly pick up over the coming weeks.

The remortgage market is holding up better, especially lower LTV cases where the use of database valuations is an option. Product Transfer business is still pretty active and our retention performance is good (i.e. fewer customers are moving their mortgage to other lenders).

More on Mortgages 

Our mortgage contact centre & admin teams have also been very busy helping customers with payment holiday requests. We have received over 30,000 requests (at one point we were getting 2,000 per day!) and have worked through these to reassure those customers impacted by the current situation.

Those of you who operate in this market as part of your non-YBS business will of course be fully aware of all of this, and hopefully those of you who refer are now aware of where we are up to. We are keen to attract new business and have recently gone back onto the aggregator sites with a view to generating this. Your linked Mortgage Adviser will be in touch in May & June and will keep in regular contact to refresh your teams and provide them with the support they need.

Network updates and news

In spite of the current circumstances, the transactional Net Promoter Score (NPS) for the Agency Network actually increased +1 to 84 in April (rolling 3 month score). Both the score, and the fact it has increased in these times is a fantastic achievement, so that’s down to you and your teams. I’ve extracted a few of the topical customer comments, which you can see below.

Customer comments 

• Very friendly staff, easy going, nothing was too much trouble. Gave clear info about opening times with Covid 19
• Professional and on point regarding Covid 19
• Very happy, staff in this agency are ALL extremely helpful during Covid 19 crisis and always have been whenever I have been in there in the past
• I was able to go in and talk about savings and ISAs, and in spite of restrictions because of Covid 19, I was able to continue discussions on the phone. I am up to date with my original plans
• I couldn’t get into the agency due to Covid-19 lockdown but spoke to them on the phone; checked account was still available and mailed them a cheque / application form. Got my new passbook back in the post two days later. Simple
• I was satisfied with all aspects. Everything was explained to me very clearly and customer service is the best l have seen and witnessed during this very difficult time of Covid 19
• I was impressed with staff dealing so professionally during this Covid -19 crisis. Hand sanitiser available for customers to use, very caring. As always impressed by the caring and helpful staff.

Great feedback, thanks!

Other Network News: The Agency Council

Last time I wrote we were planning the inaugural meeting of the Agency Council, due to take place on 1^st April. This was postponed for obvious reasons, to be rescheduled once we know more about whether this can take place face to face, or if we need to explore alternatives.

Risk management

The Agency risk checks and T&C scheme have now both been in place for 12 months, and throughout this time we (Business Support, my team & I) have been reviewing the work that has been undertaken by you and your teams. Our Retail Quality Assurance Team has also completed a thematic assessment of the effectiveness of these operational controls. We will advise you of, and implement any actions on the back of this report in the next couple of months. Just a reminder that, although it may be difficult at present, the monthly checks and the T&C activity still need to be completed within normal timescales wherever possible.

Finally

A large number of small, local charities and community support groups are finding things really challenging in lockdown, as you can imagine.  We were delighted to earmark £100,000 to give to the YBS Charitable Foundation a few weeks ago for them to distribute to support local causes right across the country.  In the end the Foundation identified 61 charities that have each received between £500 and £2,000 to help them cope with the impact of the pandemic. If you'd like to find out more about where the money has gone and the difference it's making then take a look at this video & article on our website.

The usual Charitable Foundation donation process is still working as normal.

More community updates 

Looking ahead to the end of our charity partnership with EYH, we want to celebrate all that’s been achieved. We have so far housed 407 young people and raised nearly £980,000 for EYH. Amazing.

Earlier this year we updated you about the process we take to select and launch our next charity partner and invited you to nominate charities:

Since then we’ve come a long way!

• 222 colleagues nominated a charity
• 20 of the charities were then invited to submit a proposal from all that were nominated (who best fit our criteria)
• 11 charities submitted a proposal
• 5  of the strongest proposals were selected for Executive Committee approval
• 3 charities were narrowed down and brought forward to pitch to a panel of representatives from across the business last week.

Following the pitch, we have decided to bring all 3 charities forward for our colleagues and member panel to vote on. I’m sure you will recognise all the charities on the final short list, but there will be more information on the voting emails – both about what they do, and what they hope to achieve with the support and funding that the partnership with YBS can provide.

YBS aims to partner with a charity that aligns with our purpose - a place to call home and/or enabling people to become financially resilient. We also want a great charity partner that will appeal to colleagues and members, in order to generate wide support. As a reminder, the charities are:

Casting your vote

E-mails were sent out to all agency inboxes on Monday 11^th May 2020, and we’d encourage you and all of your team to have your say (the link can be used by multiple colleagues).

You can use the following link to vote: https://www.smartsurvey.co.uk/s/IG87RX/

Votes must be cast by Friday 29^th May 2020 - any votes after this time will not be counted. The outcome of the vote will be communicated to all colleagues and the member panel in June, with the result announced to the public later this year in advance of the partnership starting. I’ll keep you posted.

Blog content

You’ll notice that there’s no extra blog or video content this month.  We’ll kick off the Growth Series articles again as soon we feel the time is right – there’s lots of useful content to look forward to.   

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