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Skipton Group Annual Report & Accounts 2024 2
We help people have a home
We help people finance homes
through Skipton Building Society and
Skipton International Limited (SIL),
and support people in buying, selling,
and renting homes through our
property group, Connells.
We make money work harder
We are here to make members’
money work harder, with a range of
savings products, financial advice
products, and services through
Skipton Building Society and SIL.
We are built on two
core foundations –
homes and money
We’re diverse and
resilient
Leveraging the Group’s structure, unique mix of businesses, and our proud
mutual status allows us to give more to our members, where they need it
most – to be there during the moments that matter.
It provides us with a diversified range of capabilities and enhanced
financial strength; with our strong performance showing just how valuable
our diverse Group is in meeting customers’ financial needs.
Skipton Building Society has come a long way since it was founded in
1853, supporting members with their financial wellbeing. What has never
changed is its mutual values of looking after members, with our purpose
having remained the same.
We are here to help people have a home, save for life ahead, and
support long-term financial wellbeing.
We’re driven by our
mutual heritage
The Skipton Group model was developed in the 1980s. The aim was to
build on the Society’s mutual roots, by developing a diverse range of
businesses that help people with a variety of financial needs.
Across our businesses we offer products and services that make a
difference to millions of lives. We innovate, campaign on issues that
matter, and strive to do things that benefit our communities and bring
value to society as a whole. Our mutual backdrop gives us the opportunity
to do that.
In addition to our Homes and Money businesses (Skipton Building Society,
Skipton International and Connells Group), our diverse Group also includes
innovative New Zealand-based AI-software company, Jade, and our invoice
financing business, Skipton Business Finance (SBF).
We’re a financially
strong and diverse
organisation, with
many areas of skills
and knowledge
We’re harnessing the collective power of the Group to offer products and
services to meet the needs of our members and customers, providing
innovative and unique solutions to real-life problems.
We’re also using our Group platform to be an advocate for change - we
recognise the role we have as Skipton Group to enable us to become a
powerful voice campaigning on societal issues.
Building a better
Society
Skipton Group Annual Report & Accounts 2024 3
Performance & Strategy Governance Financial Statements
Other Information
By clicking on the tabs at the top of each page, you can quickly and easily navigate to the beginning of each
key section within this report.
Independent Auditor’s Report | 129
Income Statements | 143
Statements of Comprehensive Income | 144
Statements of Financial Position | 145
Statements of Changes in Members’ Interests | 147
Statements of Cashflows | 150
Notes to the Accounts | 152
Chair’s Statement | 5
Group Chief Executive’s Report | 8
Strategic Report | 12
Board of Directors | 55
Directors’ Report | 62
Corporate Governance Report | 68
Board Audit Committee Report | 84
Board Change Committee Report | 92
Risk Management Report | 95
Directors’ Remuneration Report | 105
Country by Country Reporting | 295
Annual Business Statement | 297
Glossary | 300
Performance & Strategy
Governance
Financial Statements
Other Information
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you have struggled understanding any of our report and would like the data in plain text, please let us know.
Skipton Group Annual Report & Accounts 2024 5
2024 has been another successful year for the
Skipton Group. We have continued to invest in our
products as we help more first-time buyers onto the
property ladder, and we have worked hard to
enhance our members' access to the advice they
need to support their long-term financial goals. Our
Group Chief Executive’s Report contains more detail
on these important areas.
Skipton Building Society’s 172
nd
year saw a general
election in the UK, which provided greater political
certainty for the next few years, although some
economic volatility persists. Inflation fell
significantly, from 4.0% at the start of the year to
2.5% by December. Similarly, we saw interest rates
begin to fall, with the Bank of England base rate at
4.75% by the end of the year. But, cost-of-living
challenges do persist, and the interests of our
members and customers remain our prime
consideration.
Our Group
Our Group is made up of diverse and strong
businesses.
Skipton Building Society (the Society) has continued
to deliver on our purpose – to help more people have
a home, help people save for life ahead and support
long-term financial wellbeing.
In 2024 we helped 41,658 customers secure a
mortgage, including supporting over 20,000 first-time
buyers to take their first step onto the property
ladder. We significantly expanded our advice
proposition and helped 13,998 young people to save
for their first home or retirement with a Lifetime ISA.
In doing so, we continued to share our success as a
mutual and invest in competitive rates for our
mortgage and savings members.
We made significant progress during 2024 on our
transformation programme to build our capability
and provide a digitally led, seamless experience for
savings customers. This is expected to be fully
completed during 2025 and provide members with
more choice around how they want to open and
manage their accounts.
Connells, our property group, delivered a significant
increase in annual profits during 2024, providing
£20m of dividends to the Society, reflecting an
improving UK housing market and increased demand
for lettings and rentals. The business grew its stock
of houses offered for sale by 33%, and increased its
market share during the year, to over 10%. The land
and new homes division remains the leading agent in
new homes sales.
Skipton International Ltd (SIL), our Guernsey-based
savings and mortgage bank, generated £31.0m of
pre-tax profits in the year and invested significantly
in enhancing its systems.
Performance & Strategy Governance Financial Statements
Other Information
“Our mutual status and our values
enable us to make decisions
prudently and for the long term,
which is very different to the major
banks. We continue to safeguard
Skipton’s long-term stability and the
Group’s robust 2024 performance
reflects this.”
Gwyn Burr,
Group Chair
Skipton Group Annual Report & Accounts 2024 6
Skipton Business Finance (SBF), our invoice
financing business, achieved record profit in excess
of £10m in 2024. This success was attributable to
growing our geographical footprint that now
incorporates Scotland. Monies advanced to clients
also reached record levels of over £190m, with the
business positioned for future growth through an
enhanced customer proposition in 2025.
Jade, our AI-software business based in New
Zealand, continued to grow during the year and
increased its profitability by 8% to £1.4m.
Our strategy
Our five-year Strategic Plan will maximise the unique
opportunities of the Skipton Group. As we move into
2025 our priorities remain to help more people have
a home, make money work harder and make
membership matter. We will leverage our Group
advantage, investing and collaborating to strengthen
delivery of our objectives, outcomes and, ultimately,
our purpose. The next five years will set us up to do
even more - unlocking more opportunities, being
even more innovative, and leading the way in the
sectors in which our businesses operate.
The Board met regularly with the Group Executive
Committee during 2024 to review progress against
the Strategic Plan (further details of which are set
out in the Strategic Report).
Our colleagues
I am proud to share our ongoing success, driven by
the dedication and enthusiasm of our colleagues.
Their unwavering commitment to going the extra
mile for our members and customers is truly
inspiring.
In 2024, the Society remained steadfast in our
commitment to building an engaged and valued
workforce. We have enhanced our Diversity and
Inclusion efforts by establishing a comprehensive
baseline for colleague diversity data, setting clear
improvement targets and investing in Employee
Resource Groups and leadership skills to foster an
inclusive culture. This provides a strong foundation
to drive impact while also addressing increasing
regulatory obligations. Our measures of progress
and success will include strengthening colleague
feedback during 2025 as we introduce new
engagement and listening tools.
The Society’s gender pay gap decreased slightly in
2024 from 21.7% in 2023 to 21.6%. We aspire to
achieve gender parity in senior roles within the
Society and will continue to strive for 50%
representation by the end of 2027.
We are committed to supporting all colleagues
wanting to advance in their careers across the
Skipton Group, ensuring that we maintain and
enhance an environment where all colleagues can
thrive.
Sustainability
Our businesses have collaborated to establish a
Group-wide net zero commitment and are focused
on developing our execution plan to achieve our net
zero target by 2050, with the aim to agree interim
targets for publication towards the end of 2025. Our
efforts remain focused on reducing our emissions
and exploring ways to support the decarbonisation
of the UK housing stock, including applying learnings
from the retrofit of a house in Skipton that was
completed at the end of 2024.
This year, we have successfully established a Group
Sustainability Committee to progress our approach
to sustainability. We recognise the impact our
individual businesses have on climate change, and
we continue to take steps to minimise this. More
details can be found in our 2024 Skipton Group
Sustainability Report.
Built on the Society’s mutual heritage, we remain
committed to giving back to our communities. We
continue to pledge 1% of our annual Group profit
before tax to charitable causes every year that align
closely with our purpose. Members will be able to
vote on future strategic charity partnerships over the
coming years. At the 2024 Annual General Meeting
(AGM) members voted to give over £2m to Age UK
over the next three years.
Board changes
During 2024 we continued to strengthen our Board
and conducted a full review of corporate governance
arrangements across our Group, to ensure that the
boards of our key subsidiaries operate with an
appropriate level of independence and flexibility.
I was delighted to welcome Paul Chambers to the
Board as Group Chief Financial Officer (CFO) in Q1
2024. Paul was introduced to our members at the
2024 AGM.
In November 2024 we welcomed Hasintha
Gunawickrema to the Board as a non-executive
director. Hasintha has held numerous executive
positions in financial services throughout her career
of more than two decades, including at HSBC in the
UK and India. Hasintha also brings an impressive
academic background, as an alumna of Harvard
Business School, and we look forward to having her
expertise on our Board.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 7
I would also like to thank Bobby Ndawula (our former
Group Chief Financial Officer) and Sarah Whitney
(non-executive director) for their contributions.
Bobby and Sarah stepped down from the Board prior
to the 2024 AGM.
Andrew Bottomley, the CEO of the Society's Money
business, has announced he will be retiring in the
spring of 2025 after more than nine years at Skipton.
Andrew has been an exceptional leader of our Money
business and leaves with our very best wishes and I
thank him for his outstanding impact.
Following our review of Group governance
arrangements, non-executive directors of the Society
will no longer sit on subsidiary boards. Accordingly,
Philip Moore will be stepping down as a director of
the Connells Group and chair of its Board Audit and
Risk Committee with effect from the date of the
Society's AGM in April 2025. Philip has decided that
this would also be the right time for him to step
down as a non-executive director of the Society and
he will not therefore be standing for re-election at the
AGM. I would like to thank Philip for his many
contributions to both boards and know that we will
all wish him our very best for the future.
Mark Lund will also be retiring from the Board at the
2025 AGM. Mark has been a remarkable non-
executive director over the last nine years and I have
immensely valued his support as Senior Independent
Director. Mark will remain as Connells Group’s chair
following the 2025 AGM and we hope to announce a
new chair of Connells Group towards the end of
2025.
Changes across Skipton Group
We have also made senior appointments to boards
across the Skipton Group during the year.
In October 2024, Helen Charlesworth joined Connells
Group as Chief Executive Officer, replacing Richard
Twigg who had been serving as interim CEO since
Autumn 2023 and has since reverted to his CFO role.
In October 2024, after an extensive external search,
Eric Barnett was appointed as independent chair of
SIL, replacing Bobby Ndawula.
Both appointments demonstrate our commitment to
invest in talent and stand as testament to the
attractiveness of the Skipton Group and its desire to
make a difference.
SIL Chief Executive Officer Jim Coupe will begin his
well-earned retirement in June 2025. Jim has been a
driving force behind the growth of SIL since its
inception and it is now one of the largest lenders of
its kind, with mortgage lending surpassing £2bn. I
would like to thank Jim for his work over the years.
We hope to announce the appointment of Jim's
successor later in 2025.
Outlook
I continue to be excited about our opportunities over
the coming years for us to deliver real value for our
members and customers.
My focus as we move into 2025 will be to ensure
that the Group remains strong, agile and able to
grasp the significant opportunities in an increasingly
changing world.
We have a Group to be proud of – both individually
as businesses and collectively as the Skipton Group.
We are strong and resilient. We are ambitious and
innovative. And we are making membership matter
more than ever before.
Gwyn Burr
Group Chair
25 February 2025
Performance & Strategy Governance Financial Statements
Other Information
G Burr
Skipton Group Annual Report & Accounts 2024 8
Collectively, we have one purpose - to help more
people have a home, help people save for life ahead
and support long-term financial wellbeing. As we
navigate societal shifts, this is as relevant today as it
has been since Skipton Building Society was
founded back in 1853.
Our core businesses are directly aligned to our
members’ needs; namely, to finance their homes
(Home Financing and SIL), to make their money work
harder (Money and SIL) and to help them buy and
sell homes (Connells Group). These businesses
directly benefit our members through their product
and service offerings.
In 2024 we have delivered against our purpose, with
over 20,000 first-time buyers given the keys to their
first home, equating to 44% of our new lending.
As part of our commitment to providing free advice
to all of our members, we also saw our skilled
colleagues have over 39,000 advice conversations
with members to help make their money work harder
and support their long-term financial wellbeing.
In Connells, our property group, we grew our profits
by £47.5m, provided almost 79,000 exchanges on
properties for sale to enable more people to get the
keys to their home, and grew our lettings business to
over 126,000 properties under management.
We grew our market share in the year and
maintained our clear leadership position, with over
10% of UK house listings being dealt with through
our estate agency arm.
“Quote.”
Performance & Strategy Governance Financial Statements
Other Information
“2024 has been a very successful year
commercially, building the capability and
collaboration across our Skipton Group, as we
further embed our Group structure to enable
us to give more back to our members and
society.“
Stuart Haire,
Group Chief Executive
(31 December 2023: 19,120)
Keys for first-
time buyers
(31 December 2023: N/A, new metric for 2024)
Non-regulated
advice
conversations held
(31 December 2023: 10.0%)
Connells Group
estate agency
market share
Skipton Group Annual Report & Accounts 2024 9
Across our broader Group, we own Skipton Business
Finance (invoice financing and asset-based lending)
and Jade (AI and software company). These
businesses both had a strong year of performance,
with profits up 12% in Skipton Business Finance and
8% in Jade. The profits of these businesses are
reinvested into the Society, creating a sustainable
and resilient financial and service platform for our
members and customers, both now and in the future.
In combination, our Group businesses delivered
another year of excellent financial performance.
Our Group mortgage and savings growth of 8.2% and
8.9% respectively, materially beat the market and
somewhat offset the reduction in margins caused by
our strong member pricing strategy and Bank of
England base rate reductions.
Through high quality products and propositions, we
grew our member base by 3% and now have over
1.26m members benefiting from Skipton products
and services to support their financial wellbeing.
Our members enjoyed improved customer
satisfaction across our Society, with an overall
increase of 1% from the end of 2023. Through our
member panel, Trustpilot reviews and colleague
listening, we strive to ensure our members’ voices
are always heard, so that we can continue to build on
the excellent service we provide and are recognised
for.
Skipton Group Home Affordability Index
In July we launched our Skipton Group Home
Affordability Index, with our second iteration
launched in February 2025. The index uses the
collective power of our Group data to help first-time
buyers understand housing costs in their area, and
shed light on where the biggest challenges lie.
Our Index revealed that only one in eight first-time
buyers can afford their first home in their local area,
and 80% lack sufficient savings for their deposit. At
Skipton it has always been our mission to change
that; it is why we launched our market leading Track
Record mortgage product in 2023, and why we
innovated further across our entire product range
throughout the year, supporting more members to
get onto the housing ladder without a deposit, and
our broader member base in having a place they call
home.
Our collective Group data is our strength as we strive
to enhance our products, driven by the needs of our
members and society, so that we can enable more
people to achieve their aspirations of home
ownership.
Performance & Strategy Governance Financial Statements
Other Information
(31 December 2023: £308.6m)
Group
underlying
profit
before tax
(31 December 2023: 1,229,888)
Society
members
(31 December 2023: 89%)
Society customer
satisfaction
on essential housing costs
of their income
Almost of potential
first-time buyers across Great
Britain cannot afford to get
onto the property ladder
based on their own financial
situation
least affordable areas
for first-time buyers are in Wales, with
Scotland dominating the most affordable
potential first-
time buyers spend over
Skipton Group Annual Report & Accounts 2024 10
The Power of Skipton Group
Our Group is well positioned to drive innovative
change and finding solutions for industry wide
challenges in digitising the end-to-end home buying
and selling journey. Approximately one third of house
sales continue to fall through before completion,
which can cause difficulties and challenges for all
parties – delays and disappointment for our
members and customers, and for the professionals
involved throughout the journey.
Through the Connells Group’s partnership and part
ownership of Legal Marketing Services Ltd (LMS)
(the UK’s leading provider of conveyancing services),
we successfully piloted and deployed a market first
solution for streamlining and automating the proof
of funds element of the transaction. Our Group
structure allows us to play our part in the broader
ecosystem.
Home ownership is only one of the life events that
requires sound advice to achieve financial wellbeing.
Free advice, accessible for all members
We have stood by our commitment to provide free
access to financial education and advice for our
members. We know the UK advice gap continues to
widen and, unlike our competitors, we provide
regulated financial advice for those with a minimum
of £20,000 in assets to invest. In 2024 we have gone
further; we also recognise that support and advice
below that amount is crucial for many of our
members. We launched our free My Money Review
service at the start of the year and have further
expanded it by launching My Money Enquiry (a
lighter version of our My Money Review that can be
completed over the counter in branch, over the
phone, or via Skipton video link), offering free
accessible advice to all of our members, regardless
of how much they have to invest.
Our advice has already positively shaped the
decisions that members have made. During the pilot
of our My Money Review service, over 40% of
members reassessed their financial planning,
choosing options that are better suited to their
needs, helping their money work harder.
This activity has been enabled by investment in our
colleagues, upskilling them to hold advice
conversations with confidence.
Membership means more
Alongside helping our members align their savings,
investments, and borrowings with their personal
circumstances, we want them to feel rewarded for
the trust they place in Skipton. This year we have
developed more new member benefits: exclusive
rates, products, and services which cater for a
diverse range of needs. On average we paid 0.74%
higher interest than the rest of the market average
for banks and building societies (Source: CACI
Current Account and Savings Database, Stock, Jan-
Dec 2024), giving more value back to our members.
We are member owned, and our members are central
to our Society, so we are putting more focus on
making membership truly matter. As part of our
commitments we continue to invest in an ongoing
programme of branch refurbishment and upgrading
our colleague systems to help better serve our
members through our telephony channel.
We are also acutely aware of the impact we have on
the planet. By working across our Group companies
and partnering with others, we have developed a
greater understanding of the role we can play in
supporting members as they seek to make their
homes more sustainable and energy efficient. This
culminated in the complete retrofitting of a house in
Skipton which will become a show-home to de-
mystify the retrofitting process.
To support our ambitions, we have strengthened our
Group Executive team throughout the year,
increasing diversity across our Group and fostering
further collaboration and innovation.
Our passion and drive to deliver our purpose
resonates throughout our Group, with colleagues
coming together across all of our business lines to
share knowledge and experience, solving challenges
that our members, customers and society face.
We are undertaking big technological changes
across the Group that support our members and
customers to interact with us more digitally and
more efficiently - whether through our branches, our
contact centres, or through self-service functionality.
We are committed to delivering products and
services that are accessible and inclusive to all,
balancing digital needs with our expert colleagues,
and providing the excellent customer service that
has long been associated with Skipton.
Performance & Strategy Governance Financial Statements
Other Information
(31 December 2023: £148m)
Value returned to
members through
above market average
savings rates
Members reassessed their
financial planning after
their advice conversation
Skipton Group Annual Report & Accounts 2024 11
We have implemented Microsoft Copilot, an Artificial
Intelligence (AI) solution to help our colleagues to
deliver more value, more efficiently.
We are also investing in retooling our businesses
with automation and data capability, platform
enhancements and digital assets to enhance the
service we can provide.
I am proud that our dedication to our members has
been reflected in the excellent customer satisfaction
scores that we have seen across our businesses,
and the recognition we have received from the
industry through a multitude of awards.
Conclusion and outlook
By combining our collective efforts across the Group,
and unlocking the power of our data, I believe we can
continue to provide more opportunities for members
to have a home, save for life ahead and support long-
term financial wellbeing. At a time when more people
are struggling to buy their first homes or change their
homes, and one in three people have no savings, it is
more vital than ever that we play our role in building
a more resilient society.
Alongside our products and services, raising
awareness and lobbying for societal change is also
core to our purpose. Financial education is essential
to unlock better outcomes; whether it be tackling
challenges for first-time buyers, narrowing the advice
gap, or how we all play our part in reaching net zero
by 2050. We understand that we cannot do this
alone, but collectively we can make a difference, and
we will play a leading role.
Stuart Haire
Group Chief Executive
25 February 2025
Moneyfacts Consumer Awards
• Winner, Best Online Mortgage Provider
(Homes)
• Highly Commended, First-Time Mortgage
Buyers’ Choice (Homes)
MoneyAge Mortgage Awards
• Winner, Best BTL Broker of the Year
(Connells Group)
• Winner, Specialist Broker of the Year
(Connells Group)
YourMortgage.com
• Winner, Best First-Time Buyer Mortgage
Lender (Homes)
What Mortgage
• Winner, Best Intermediary Lender (Homes)
Moneynet Personal Finance Awards
• Winner, Best Building Society Savings
Provider (Money)
Moneyfacts Consumer Awards
• Winner, Offshore Account Provider of the
Year (SIL)
• Highly Commended, High Street Savings
Provider of the Year (Money)
What Mortgage
• Winner, Best National Building Society
(Homes & Money)
Feefo
• Exceptional Service Award (Connells Group)
• Platinum Service Award (SIL)
Performance & Strategy Governance Financial Statements
Other Information
2024 Awards
S Haire
Making Money Work Harder
Helping People Have a Home
Serving our Members and Customers
Skipton Group Annual Report & Accounts 2024 13
Together, we are stronger than the sum of our individual parts, and all our business lines play an integral part in
delivering our purpose and ultimately making membership matter.
You can read more about how we segment our Group in Note 45.
Performance & Strategy Governance Financial Statements
Other Information
Key Business Lines
Other Business Lines
We have other smaller business interests that are not separately reportable, primarily concerned with income
generation and enabling capability to support delivery of our collective Group purpose. These smaller
businesses are combined within the ‘Other’ category in our financial reporting, together with the impact of
Group consolidation adjustments.
• Skipton Business Finance (SBF) provides invoice financing and bad debt protection to small and medium-
sized enterprises, based at our Head Office in Skipton.
• Jade Software Corporation is based in New Zealand, specialising in digital and large IT enterprise solutions
globally, and provides the Society’s core database and software development language.
Skipton Building Society is the UK’s fourth largest building society, offering
mortgages, savings and financial advice with a national presence represented by
a network of 82 branches. Skipton Building Society is authorised by the
Prudential Regulation Authority (PRA) and regulated by the Financial Conduct
Authority (FCA) and the PRA.
Skipton International Ltd (SIL) carries out mortgage lending in the Channel
Islands and buy-to-let lending in the UK and accepts deposits in Guernsey from
an international customer base. SIL is licensed under the Banking Supervision
(Bailiwick of Guernsey) Law 2020, as amended and regulated by the Guernsey
Financial Services Commission.
Connells Group is the UK’s largest high street estate agency and property group
with a c.10% market share in its estate agency arm. Across its 80+ brands and
network of over 1,200 branches nationwide, Connells Group combines residential
sales and lettings with a range of consumer and corporate services including
land and new homes, mortgage services, conveyancing, auctions, surveying and
valuations, commercial property services, Energy Performance Certificate (EPC)
provision and asset management.
Skipton Group Annual Report & Accounts 2024 14
Our Home Financing business within the Society
provides loans to borrowers to purchase and own
their home, whilst also supporting the private rental
sector through the provision of buy-to-let mortgages
to landlords. This is further strengthened through our
mortgage lending by SIL in the Channel Islands.
Our Money business within the Society brings
together a secure place for our members’ savings
with the provision of high-quality non-regulated free
education and advice to our customers to support
their long-term financial wellbeing. Combined with
the additional provision of regulated Financial
Advice, our offering sets us apart from many of our
peers.
Our property business (Connells Group) is focused
on delivering for customers and clients throughout
the process of buying, selling and renting homes.
Connells’ services include new homes, mortgage
services and conveyancing. The Connells Group also
supports customers to have a home through its
lettings business and is one of the largest providers
of residential survey and valuation services in the UK.
To supplement our core activities, we also source
funding from the wholesale markets, which
diversifies our funding base and supports our long-
term financial stability.
Our mutual status means we don’t have
shareholders or dividends to pay out. We are
member-owned, and we have a responsibility to our
members to remain financially sustainable,
generating profit to invest back into our businesses
for the future benefit of members. This means we
reinvest our profits to support sustainable growth, to
modernise and remain relevant with new capabilities
and propositions, and to preserve a strong capital
position, supporting and protecting our members,
customers and creditors today and in the future.
Performance & Strategy Governance Financial Statements
Other Information
The Skipton Group Business Model
• Savings deposits from members and customers
• Deposits from other banks, institutions and other financing e.g. covered bonds
• Retained earnings from previous profits and dividends from our Group
businesses
• Lend on mortgages to customers, through brokers and direct to customers
• Lend working capital to finance small and medium-sized businesses through
SBF
• Fees and commissions charged for regulated Financial Advice, mortgages,
buying, selling and renting homes and other financial products
• The difference between the interest we receive from mortgages and assets,
and the interest we pay on savings and deposits from other banks and
institutions
• Paying and developing our colleagues
• Distribution costs, e.g. our branches, offices and broker procuration fees
• Unpaid debts and other impairment losses
• Taxes
• Enhancing experiences and driving additional value for members and customers
• Providing multi-channel support to our members, customers and brokers
• Investing in the future of our Group, ensuring we maintain capital strength
• Committed to donating 1% of PBT to charity, to do good for society
Where the
money
comes from
What we do
with it
How we
generate
income
Where we
incur costs
What we
use our
profits for
Skipton Group Annual Report & Accounts 2024 15
Decision-making
Achieving the right balance of risk and reward is
essential to ensuring the long-term sustainability of
the Group and enables us to deliver our Corporate
Plan. Through the Board Risk Committee approved
risk management framework and governance
structure, the Group has a formal mechanism for
identifying and managing risks throughout the
business, further details of which can be found in the
Risk Management Report.
The Group’s 2025 – 2029 Corporate Plan is
developed in line with this framework and was
approved by the Board in December 2024.
Strategic Priorities
2025 is about building on the foundations from 2024,
delivering core capabilities for our members and
customers and further enhancing our membership
proposition, giving back even more value when and
where it matters.
Our three key strategic priorities keep us focused on
purposeful change as we continue into 2025:
• Helping more people have a home - We will
continue to strive to make home-ownership a
reality for more people, with a strong focus on
first-time buyers.
• Making money work harder - We will invest more
to ensure our members receive above-market
average interest rates for their savings and have
access to free financial advice to help them plan
their financial futures.
• Making membership matter - Our members will
see and feel the value of Skipton membership,
being rewarded for their loyalty and tenure and
having more of a voice in the running of their
Society.
The Board’s Approach to Policies and Practices
The Board is responsible for approving the Group
strategy, for managing risk, and overseeing its
systems of internal control. The ongoing
effectiveness of these controls are reviewed by the
Board on a regular basis (see below).
The Society maintains a high standard of corporate
governance for the benefit of its current and future
members, and to conduct its business in a prudent
and well organised manner. The Board’s terms of
reference clearly set out its responsibility for the
overall stewardship of the Group in line with the
Society’s ‘Principles of Governance’, as set out in the
Corporate Governance Report and available at
skipton.co.uk/about-us/our-people/our-board.
Our strategic priorities, together with our strategic
outcomes, are monitored and reported to the Board
and senior management on an ongoing basis. This
enables the Board’s management of the business
and its decision-making processes.
Respect for our environment and the communities in
which we operate is also a key part (see Building a
Sustainable Society, pages 32 to 38).
Economic and market background
2024 was a year that brought extreme global
weather events, continued fighting in Ukraine and the
Middle East, and fifty countries voting in elections.
Following the UK General Election result, a level of
uncertainty remained regarding the impact of new
fiscal policies.
Strong economic growth was seen in the first half of
2024, but the UK stagnated in the second half of the
year, with business confidence having declined.
Inflation continued to reduce gradually falling to
2.5% by December and the Bank of England also
reduced bank base rate to 4.75% by the year end;
while unemployment has remained broadly stable
over the year. The UK housing market compared
favourably to 2023, and key house price indices
report that house prices increased marginally during
2024. However, the cost-of-living challenges remain,
and changing customer behaviours have presented
both challenges and opportunities across our
diversified Group.
Looking ahead, UK growth outlook remains
dampened, with economies across the globe facing
significant uncertainties and continued geopolitical
tensions. A significant cause of economic
uncertainty in 2025 will be whether President Trump
will press ahead with tariffs. Budget measures are
set to weigh on private sector activity too, as a result
of higher minimum wage and employer national
insurance contributions; with government spending
and investment now a greater driver of any
expansion. Fiscal loosening means inflation is
expected to remain stubbornly above the Bank of
England’s 2% target. However, further interest rate
cuts are expected, though at a slower pace. Despite
inflation returning to more normal levels and wage
growth helping to soften cost of living pressures,
there remains significant strain on some household
finances though, with rising utility costs expected to
impact disposable incomes.
While events and conditions evolve in the UK
economy, the outlook for Skipton Group remains
positive. The Group remains robust, with strong
capital and liquidity ratios, healthy and sustainable
growth in both mortgage and savings balances, good
underlying profitability, and a diversified business
model.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 16
We will continue to innovate and provide solutions to
support more people into homeownership and
through the home buying and selling process,
enabled by a seamless customer experience, and
excellent broker relationships.
Our ambition is to help drive societal change,
becoming a key influencer in a thriving housing
system and facing into the UK’s housing crisis by
supporting borrowers through enhanced and
innovative products and propositions, and financial
education. Our Homes business has three strategic
priorities to realise our ambition:
• Helping People Have a Home
• Creating Outstanding Experiences
• Championing the Intermediary Market
Helping People Have a Home
Following a successful launch last year, we continue
to evolve and enhance our Track Record Mortgage
(first-time buyer, no deposit required product),
making it more accessible to more borrowers, with
613 (December 2023: 199) keys to first-time buyers
through this product alone. Our enhancements
throughout 2024 demonstrate our commitment to
helping as many aspiring homeowners as possible.
Our research and insight through our Skipton Group
Home Affordability Index demonstrates that finding
a deposit is still one of the biggest barriers to
homeownership, and whilst we have seen some
strides in the industry to address this challenge, our
Track Record product remains unique.
We further strengthened our proposition with the
launch of our first-time buyer product range, which
coincided with the launch of the Affordability Index.
2024 saw us partner with Channel 4 to produce the
“Make Your Move” series, and with Phil Spencer's
Move IQ to produce a YouTube Series and Podcast
to help borrowers navigate the often-daunting
journey to home ownership.
Finding the right education, coupled with data, is
challenging, and can make the process feel too
overwhelming for some aspiring first-time buyers.
That’s why across the Skipton Group we are
passionate about campaigning for change – raising
awareness and highlighting options that borrowers
might not realise they have.
Our purpose driven ambition to support more first-
time buyers is a core strategic focus. This year we
have supported 20,071 (2023: 19,120) first-time
buyers in having the keys to their first ever home.
This represented 44% of all new lending (2023: 40% -
restated*), with December 2024 being a record
month of completions to this segment at 48%. As we
move into 2025, continuing to innovate to positively
impact the market through first-time buyer
propositions will remain a priority for us.
We continue to support home ownership aspirations
across our mortgage portfolio for home-movers and
those remortgaging, providing affordable solutions
through our broad product set.
Skipton Group Affordability Index
(31 December 2023: 40%*) (*restated from 33%)
New lending to
first-time buyers
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 17
We remain committed to driving a more sustainable
housing market through creative solutions. We will
use our Group to test and learn, developing
opportunities to play our part in decarbonising
homes, and taking learnings from our recent Regent
Road Retrofit project in partnership with Leeds
Beckett and Leeds universities to understand the
costs, behaviours and experiences faced when
undertaking a retrofit; to support and promote
activity to a wider cross-section of customers.
To support our members, we continue to offer free
Home Energy efficiency reports (EPC+) and lower-
interest additional borrowing products for anyone
who is looking to make energy efficient home
improvements (see page 26 for further details).
Creating Outstanding Experiences
Our excellent customer and broker service continues
to be a priority for us, we want to enable customers
to interact seamlessly in their channel of choice.
Throughout the year we have developed customer
journey enhancements and despite a slight
reduction, maintained excellent service, reflected in
our market leading customer satisfaction. Work in
this area continues into 2025.
Our customer satisfaction score is the percentage of
members and customers surveyed that scored
satisfaction as 5, 6 or 7 minus those scoring 1, 2 or 3
(on a scale of 1-7).
We will continue to invest in leveraging technology,
data and insight to personalise and optimise
customer and broker journeys. Our aspiration is for
technology to do the ordinary, so that our people can
continue to do the extraordinary, balancing our
investment in both.
Our experienced colleagues are not targeted on call
times, which means we will always dedicate the time
needed to help understand and support our
customers’ mortgage needs.
This service has contributed to our Homes business
ranking number 1 for Net Promoter Score (NPS) in
the BVA BDRC competitor monitoring syndicate
survey in Q2 and Q3 2024. This is in addition to our
strong customer satisfaction performance.
The experience of our brokers is just as important,
and through our commitment to the intermediary
market, we are proud to consistently maintain
excellent broker feedback and broker satisfaction
scores, which continues to be a future focus.
Brokers satisfaction score is the percentage of
brokers surveyed that scored satisfaction of 6 or 7
(on a scale of 1-7).
(31 December 2023: 92%)
Broker
satisfaction
score
(31 December 2023: 93%)
Homes customer
satisfaction
Performance & Strategy Governance Financial Statements
Other Information
“Skipton helped our family buy
a large house so we could live
together. It was life changing
for us and we cannot thank
them enough.”
Customer Relationship Survey, 2024
Skipton Group Annual Report & Accounts 2024 18
Our average underwriting time from application to
offer reflects our ability to use technology and
combine it with our experienced colleagues to
support customers. Our underwriting speed from
application to offer remains excellent, whilst
supporting strong growth of completions in 2024.
Championing the Intermediary Market
We will continue to advocate for brokers,
strengthening our lending ambitions through a
commitment to the intermediary market and being
recognised as a lender of choice for first-time
buyers.
Brokers are key to providing advice to borrowers
who continue to have complex needs. As we see the
market dynamics change, with interest rates
reducing and new government intervention to
support affordable housing, we expect to see more
aspiring homeowners seek advice and reassurance
on their journey to purchase their first home.
Maintaining our position as an intermediary led
lender, we will continue to strengthen the excellent
relationships we already possess, providing more
options to brokers to help their clients through
innovative products and propositions, listening to
their feedback to enhance our offering.
The strengthened relationships we will drive will
result in better experiences for brokers, customers
and colleagues. Our continued focus on the
Intermediary market will see increased advocacy
amongst brokers, which in turn will be reflected in
increased repeat business.
We continue to be recognised for listening to our
borrowers and brokers, with Skipton being named
the What Mortgage Awards 2024 – Best National
Building Society for the 11th year in a row and Best
Intermediary Lender.
(31 December 2023: 9.0 days)
Speed of
underwriting
(application to
offer)
Skipton International Limited (SIL)
Our lending spans into the Channel Islands, with SIL
(our Channel Islands bank based in Guernsey)
offering a UK mortgage proposition specifically for
UK buy-to-let investors resident overseas.
The offering is simple and hassle-free, available
online, by phone or video with a personal point of
contact throughout.
SIL reports another successful year of mortgage
lending, whilst also creating further roles in the
Executive team and strengthening the control
environment.
Looking forward, SIL will focus on enhancing its
excellent customer service through new digital and
self-service capabilities, and utilising our Group to
collectively identify and implement new strategic
growth opportunities.
Performance & Strategy Governance Financial Statements
Other Information
“Great support pre-application
combined with a very efficient
underwrite and offer. For a
young, nervous first-time
buyer couple this kind of
service makes a huge
difference and provides great
reassurance”
Broker Experience Survey, 2024
Skipton Group Annual Report & Accounts 2024 19
Mortgage Lending Performance
Through our mortgage offerings for residential
homeowners, buy-to-let landlords, and our offshore
lending in the Channel Islands through SIL, 2024 has
yet again been a year of growth for the Group.
Our Group mortgage portfolio grew by 8.2% (2023:
12.1%) whilst maintaining our prudent credit risk
appetite. The Group has increased its market share
of balances to 1.81% (2023: 1.69%) (Source: Bank of
England statistics, ‘Lending secured on dwellings’).
The Group’s UK residential mortgages in arrears by
three months or more remained low, representing
only 0.29% of mortgage accounts (2023: 0.23%)
which compares to the industry average of 0.91%
(Source: UK Finance industry arrears data
(residential mortgages in arrears by more than three
months).
This is testament to our strong up-front lending
controls and proactive credit management, whereby
we closely monitor and manage mortgages that
have fallen into arrears, supporting borrowers to find
solutions that are appropriate for their individual
circumstances.
We remain focused on executing our lending
strategy throughout 2025. Our primary focus will be
on innovating when developing our propositions and
delivering value to both customers and brokers
through agile, impactful change. We will continue to
push boundaries, ensuring that every step we take
drives meaningful results and strengthens our
position in the mortgage market.
Home Buying and Selling
Across the Connells Group, we support around one in
ten individuals looking to buy and sell homes in the
UK through our estate agency network.
We continue to innovate, champion and support
industry initiatives that seek to improve the home
buying and selling experience for all parties.
Our service in the industry is already award winning,
being awarded the Exceptional Service Awards
(Feefo) and the Gold and Platinum Fee Service
Awards for 2023 and 2024, scoring 4.8/5.0 at 31
December 2024 (31 December 2023: 4.8/5.0).
(Note: Feefo is the gold standard customer review
platform with a minimum rating of 4.5/5.0 required).
(31 December 2023: 10.0%)
Connells Group
estate agency
market share
(31 December 2023: 12.1%)
Group mortgage
portfolio growth
Performance & Strategy Governance Financial Statements
Other Information
“I found Connells very friendly
and approachable. I used
them on my previous house
move, and was confident
using 23 years later."
Connells Feefo Review, 2024
Skipton Group Annual Report & Accounts 2024 20
As the housing market recovered during 2024, with
base rate pressures easing and house prices
increasing, the UK property market showed resiliency
and annual growth, providing further momentum as
we move into 2025 to drive innovation across the
sector. Our ambition is to continue to play an active
part in this, driving a reduction in time from offer to
completion for all parties, which we are uniquely
placed to do, given our size and scale in the market.
The breadth of the Connells Group operations
provides us with unique insights into some of the
challenges that have hindered progress in the home
buying and selling process in recent years. Our
collaboration with Legal Marketing Services Ltd
(LMS) and their partners, provided an opportunity to
rapidly test and validate how key stakeholders in the
journey can work together to overcome challenges to
deliver a faster, more seamless and less stressful
experience for all parties involved.
The partnership with LMS enabled us to launch a
market first trial in September 2024 to test digitising
the proof of funds element of the journey, which will
move to full roll out upon proving success of the
concept.
Connells Group Performance
We are pleased to report another successful year for
the Connells Group. Our mortgage services
proposition continued to deliver for our customers,
offering whole of market advice. Connells generated
lending through the year of £31.7bn (2023: £30.9bn)
across all UK mortgage providers, and continued to
generate mortgage lending across our Skipton
Group.
The Connells Group lettings business manages
properties on behalf of landlords, with the number of
properties under management at 31 December 2024
increasing by over 900 from 31 December 2023,
generating further income for the Group.
Across the market, a reduction in rental properties
overall has seen rental costs rising, albeit at a slower
rate than in 2023. Combined with a reduction in
mortgage interest rates, we expect this to fuel the
first-time buyer market in 2025.
The properties available for sale across our
1,200+ estate agency branches was
up from 52 per branch at December 2023
Performance & Strategy Governance Financial Statements
Other Information
(31 December 2023: 125,666)
Connells lettings
properties under
management
House viewings in 2024 were
higher than the same period in 2023
Rental properties in arrears represents
of tenancies managed (December 2023: 5.3%)
The average tenancy length in months was
(December 2023: 29.6 months)
At end of tenancy, Connells Group re-let
of properties in 2024 (2023: 77%)
The number of properties for sale on which
Connells Group exchanged contracts during the
year was
compared to 2023 (December 2023: 70,971)
Skipton Group Annual Report & Accounts 2024 21
We will continue to ensure our members receive
above-market average interest rates for their
savings and have access to free advice to help them
plan their financial futures.
Our ambition is to help members' money work harder
for them. By giving more people access to financial
education and advice, along with high quality
products and services, we play our part in reducing
the Advice Gap. An estimated 12.4 million adults in
the UK fall into the Advice Gap which encompasses
existing investors and cash savers with more than
£10,000 in cash (Source: Boring Money, June 2024).
Our three strategic priorities for the Money business
do just that:
• Offering High Quality Products and Services
• Broadening Access to Advice
• Making Every Interaction Count
Offering High Quality Products and Services
As the base rate fell in 2024, we remained
committed to paying competitive savings rates to
our members and bolstering our offering with
member exclusives. Our minimum variable savings
rate in December 2024 was 2.80%.
Our existing members have benefited from an
increased range of member exclusive products
including a Regular Saver, Fixed Rate Member Bond,
Member Income Bond, and Member Bonus Saver,
which have provided over 107,000 new accounts for
our members.
We have also strengthened our product offerings
through the launch of new and innovative products,
namely a Base Rate Tracker Bond and Over 66+
Income Bond. These complement our existing range
and support a growing number of savers and
investors to make their money work harder.
We delivered growth in our business without
compromising on service, achieving an increase in
net customer satisfaction of 4% when compared to
December 2023 (being the percentage of members
and customers surveyed that scored satisfaction as
5, 6 or 7 minus those scoring 1, 2 or 3 on a scale of
1-7).
Our average time to speak to members through
savings-related calls and webchats was 147
seconds (2023: 156 seconds), despite high levels of
savings maturities. This has enabled us to maintain
a strong Trustpilot rating of 4.3 stars out of 5 (31
December 2023: 4.3 stars).
(31 December 2023: 985k)
Savers and
investors
(31 December 2023: 86%)
Money customer
satisfaction
Performance & Strategy Governance Financial Statements
Other Information
Image to update
We launched ‘Love the Taxman’ ISA campaign to help members make the most of tax-free savings
through products available to them. To encourage members and customers to talk openly about money,
we provided Savings Booths as part of UK Savings week in September 2024. We also focused an episode
of ‘Make Your Move’, in partnership with Channel 4, on making better financial choices.
Skipton Group Annual Report & Accounts 2024 22
Broadening Access to Advice
Skipton is the only Building Society to still offer a
direct Financial Advice proposition to support those
who need it, reaffirming our purpose in supporting
long-term financial wellbeing.
Our advice proposition supports customers through
significant life events to help them confidently
achieve their desired lifestyle, whilst also ensuring
they can leave a meaningful legacy to their loved
ones through Inheritance Tax Planning services.
We broadened our advice proposition by introducing
free financial reviews with our skilled branch
colleagues. We did this through the launch of the My
Money Review and My Money Enquiry. Over 40% of
members who attended the review took a different
action as a result, and 97% were satisfied with the
service they received. The feedback truly
demonstrates the value we provide to our members.
Our proposition was supported by the launch of two
public relations campaigns focused on the
difference between the conversations that the nation
have with their friends and family compared to a
professional financial advisor. Supported by TV
finance guru Tayo Oguntonade, we discussed why
parents struggle to talk about money with their
children and the importance of seeking accredited
financial advice.
Looking ahead to 2025, we expect to see the number
of advice conversations increase, encouraging more
members to make informed decisions to support
their financial futures. We will achieve this goal by
providing education and advice through our skilled
colleagues and interactive tools. Data will also play a
key part by informing our product offering and
enabling us to personalise interactions.
Reflecting our continued efforts to delivering positive
experiences and great outcomes to our members,
we have maintained our award-winning customer
service, consistently ranking towards the top across
industry customer service league tables, as well as
retaining the Fairer Finance Gold Award in their latest
customer experience ratings. This demonstrates the
skills, care and empathy with which our customer-
facing colleagues engage our members.
Delivering good customer outcomes remains at the
heart of our purpose. Our colleagues’ continuous
learning has ensured that we can have confident and
trusted conversations with our members and
customers, particularly when identifying
vulnerabilities. We have specifically taken steps to
adapt our services to become more accessible and
inclusive. Amongst many initiatives last year, we
added British Sign Language (BSL) interpretation to
the disclosure videos in branches and started to
introduce service counters that now have a lowered
central section, making them more accessible.
(31 December 2023: N/A, new metric for 2024)
Non-regulated
advice
conversations held
Performance & Strategy Governance Financial Statements
Other Information
“I opened savings accounts for
my grandchildren with Skipton.
It's the only way we can help our
grandchildren as they grow up,
either for University, buying a car
or for a deposit on a house”.
Customer Relationship Survey, 2024
Skipton Group Annual Report & Accounts 2024 23
Research by Abrdn shows that:
As we recognise the importance of educating
members and helping them make sound financial
decisions, we have collaborated with a third party to
trial a free education offering with our member panel,
enabling us to shape our future provision of
education that is aligned to their needs.
Through our regulated financial advice provision, we
have supported 5,385 customers (2023: 6,000) with
needs ranging from Stocks & Shares ISAs through to
accessing pension benefits, growing our funds under
management in the year.
Aligned to our ESG ambitions, we have a set of
investment options which integrate environmental,
social and governance criteria, to screen out certain
products or industries, such as those which produce
tobacco, controversial weapons, and thermal coal.
Making Every Interaction Count
Across our savings propositions, we have delivered
significant enhancements to our journeys across
digital and face-to-face channels, creating
consistent, easier and more efficient experiences
that embed Consumer Duty principles for the benefit
of our members.
Whilst we strive to get things right for our customers
first time every time, we recognise that on occasion
things can go wrong. Where customers complain, we
deal with these complaints efficiently and with
empathy, putting right what has gone wrong. We aim
to respond to complaints as quickly as possible, and
more than half our complaints in 2024 for mortgages
and savings were responded to within 3 days
(54.3%). More details can be found on our website
(within the ‘Make a complaint’ tab).
We look to continuously minimise complaints
through our investment in new technology, including
AI capabilities, and internal processes to maintain
excellent customer service levels and support longer-
term financial wellbeing. Notably, we have enabled
our colleagues across the Money and Homes
businesses to onboard customers in real-time to our
Mobile App and Portal using the One Time Code
offering. This means our members can gain
immediate access to online platforms without the
need to wait for information in the post.
Throughout our digital transformation programme
activity in 2024 we have transitioned an additional
seven of our most frequently issued
communications to paperless, notifying
approximately 130,000 members of their ability to
switch to paperless preference for those key
documents, with only 0.5% of those members opting
out. We have also provided AI-enabled knowledge
management support for over 1,000 colleagues to
bring information to their fingertips when supporting
our members.
Our ambition is to make our journeys fully omni-
channel (available across all of our channels) where
we see large volumes of interaction and where
members tell us it matters the most. Journeys that
are omni-channel enabled will increase as we move
into 2025 and we launch our new Mobile App and
Portal that we have created the foundations for in
2024.
Significant investment has been made into our
technical and foundational capabilities that allow our
colleagues to provide the best service to our
members whenever they need it.
Through our regulated Advice proposition, we have
collaborated with Focus Advice Technology to
define, test and implement an Advice Engine to
assist in building personalised financial Advice in
real time. This innovative capability was recognised
as market leading by the Financial Technology
Research Centre at the Empowering Advice Through
Technology event 2024 as the Best in Show Winner.
The technology enables the Society to support more
customers with their long-term financial wellbeing
through the provision of Advice.
(31 December 2023: N/A, new metric for 2024)
of our savings
journeys are omni-
channel enabled
“44% of people in the UK are
unable to answer important
questions on interest rates,
inflation or basic investment
concepts, equating to 23.3million
adults.”
(31 December 2023: £4.3bn)
Funds Under
Management
Performance & Strategy Governance Financial Statements
Other Information
Savings Ladder Index by Abrdn.
Skipton Group Annual Report & Accounts 2024 24
Society Savings Performance
Across the Society and SIL, our savings offerings
have resulted in another year of growth, through
retaining and growing balances.
The Money business’ competitive savings rates
resulted in total balances growing in the period by
8.9% to £28.3bn (2023: 15.4% to £26.0bn),
compared to the UK savings market where net
savings grew by only 5.1% (2023: 1.9%) (Source:
Bank of England Statistics).
Being the UK’s first, and one of the biggest providers
of the cash Lifetime ISA (LISA), we hold balances of
£1.2bn (2023: £1.2bn) for customers who are saving
hard for their first home or planning for retirement.
These customers benefited from government
bonuses in the period of £56.2m (2023: £49.5m).
(31 December 2023: 1.30%)
Society market
share of savings
balances
We will continue to drive forward the technological
and in-branch capabilities that will see us meet the
needs of our members better, now and in the future,
ensuring we enhance both our digital and ever
important human interactions, while the banks
withdraw from the high street with branch closures.
Simplification and automation will drive efficiencies
resulting in more streamlined journeys, and better
experience for our members.
Skipton International Limited (SIL)
SIL offers some of the best offshore interest rates
whilst being committed to providing personal service
- a winning combination when depositing money in
an offshore savings account. SIL offers Sterling and
US Dollar savings in fixed rate bonds, notice and
easy access accounts.
SIL’s retail deposits held strong at £2.42bn
(December 2023: £2.45bn) despite not actively
pursuing growth in balances in the period.
Growth will resume in 2025, which will be supported
by investing in digital onboarding and maintaining
excellent customer service levels though improved
customer journeys and process enhancements. This
is aligned to our Society aspirations in ensuring we
are offering all of our Group customers and
members the service they want.
Our dedication to our customers in the Channel
Islands is also award winning, and we consistently
achieve Feefo scores for service and product of
>4.5/5.0 (note: Feefo is the gold standard customer
review platform with a minimum of 4.5/5.0).
SIL are a four-time Feefo Platinum Trusted Service
Provider, having been awarded gold prior to this for
eight years running.
(31 December 2023: 4.7/5.0)
out of 5.0 Feefo
review score
Performance & Strategy Governance Financial Statements
Other Information
“I was treated as an individual and
my views and queries were
respected by well trained staff”
Skipton International Ltd, Feefo Review, 2024
Skipton Group Annual Report & Accounts 2024 25
Our members will see and feel the value of Skipton
membership.
Key to our purpose and sitting at the heart of our
collective Group businesses, is membership. We are
growing membership in a sustainable manner and
bringing the benefits of membership to an increasing
number of people. Throughout the year, Society
membership numbers grew by 36,720, taking our
total membership base to 1,266,608 (2023:
1,229,888).
The branch network continues to play a key role in
supporting our growing member base, and as part of
our member commitments we will keep all of our
branches open until at least 2026. The Society
currently has 82 branches (with the wider Group
totalling over 1,300 branches including those of
Connells Group). We will continue to invest in our
network to ensure our branches remain relevant now,
and in the future, giving our members and customers
the option to choose how they interact with us, such
as by telephone, video, webchat and through our
digital assets.
As part of our commitment to our branch network,
we have invested in refurbishing the branch spaces,
using our experienced colleagues in branches who
are closest to our members and customers to assist
with the design. We want our branches to be
accessible, with an environment suited for a variety
of member and customer needs. With a long proud
history in Skipton, our flagship branch has already
undergone refurbishment, reinforcing to our
members that we’ll be here for them for years to
come, just as we have been for our 172-year history.
In 2024, we launched our Member Commitments.
The promise we give to our members in 2025 is that
you’re more than a customer, to us, that means you
deserve more. More value. More for you. More of a
say. And that’s exactly what we’re committed to.
We’ll review our Commitments annually to ensure
they remain relevant and valuable for our members.
At Skipton Building Society, membership means
more.
We have three membership priorities:
• Creating Value Exchange
• Encouraging Meaningful Participation
• Supporting Communities
You can read more about these priorities on the
following pages.
Measuring Membership
Our three priorities within membership will be
measured by surveying our members monthly to ask
if we are delivering what matters to them:
• I am rewarded for being a member of Skipton
Building Society
• There is an opportunity to influence decision
making
• Skipton Building Society demonstrates a
commitment to supporting local communities
Our roadmap continues to build on our member
proposition, providing member exclusives and
personalised experiences, and empowering our
colleagues to recognise members for their loyalty.
(31 December 2023: N/A, new metric for 2024)
Society membership
score
Performance & Strategy Governance Financial Statements
Other Information
“Whether contacting Skipton in
branch, online or on the phone,
the team are always on hand to
help. Nothing is too much trouble
and information is easy to obtain.
A building society that I am
pleased to be a member of”
Customer Relationship Survey, July 2024
Skipton Group Annual Report & Accounts 2024 26
Creating Value Exchange
We will demonstrate the value of membership
through providing great value products and services,
as well as rewarding and recognising the loyalty of
members.
Member exclusive savings products with preferential
interest rates have proven extremely successful, with
over 107,000 of these taken by our members in 2024,
and will be a continued feature of our approach in
future years.
On average, we paid 0.74% higher interest (2023:
0.65% higher interest) than the rest of market
average for banks and building societies (Source:
CACI Current Account & Savings Database, Stock,
January - December 2024). This equates to an extra
£197m paid to members (2023: £148m).
Our member exclusive products and rates not only
span our savings range, but we guarantee that our
borrowers will always get our best deal too, with
access to retention products which match or beat
our on-sale range (subject to eligibility and individual
circumstances).
Alongside our product rates, our members also
benefit from access to free or discounted products
through partnerships we have established. We
continued to offer our members a free Energy
Performance Certificate Plus (EPC) in partnership
with Vibrant Energy (a Connells Group company)
which includes recommendations for energy
efficiency and improvements, and funding options
where available. Since launch in November 2022,
10,417 surveys have been conducted providing over
£774,000 of benefit to our members, with a further
75 scheduled (as of 31 December 2024).
In October 2024 we launched our Home Move box,
helping first-time buyers and home movers settle
into their new homes with some carefully selected
gifts, and in December 2024 we empowered our
colleagues to surprise members at moments that
matter through meaningful acts of kindness.
We will continue to evolve our member proposition
and complimentary services, either at a discounted
rate or entirely free. Our members will feel
recognised with rewards that are relevant and
valuable to them.
Encouraging Meaningful Participation
Members will have the opportunity to participate in
making decisions about their Society, including
having a say in who runs our Society and voting for
our Board of Directors at the AGM, in person or
online. We are proud that in our 2024 AGM, almost
64,000 of our members exercised their voting rights,
an increase of over 4,300 from 2023.
Our members’ voices matter and we continue to
encourage member participation across a range of
different forums, including growing our member
panel and digital collaboration platforms, and we will
invest in helping more members realise the true
value of membership with the Society.
There are over 23,500 in our Member Panel, helping
to shape the products and services they want to see.
(31 December 2023: 0.65%)
Above market
average savings
rates
Performance & Strategy Governance Financial Statements
Other Information
“I have used Skipton for about 7
years and I have never had even a
mildly unpleasant experience. I can
speak with a person very quickly
and they are always super polite
and helpful. They are an outlier in
today's world.”
Skipton Building Society Trustpilot, July 2024
Skipton Group Annual Report & Accounts 2024 27
Supporting Communities
Our support to wider society and making a real
difference to our local communities continues to be
a core priority of membership. Colleague
volunteering opportunities have ensured we have
continued to support local charities and
communities throughout the year, with colleagues
able to dedicate three days each to volunteering
opportunities of their choice.
Core to our purpose, volunteering will continue to be
a priority, supporting our communities in which we
live and work, helping them to thrive.
We have an opportunity to further use branch spaces
to provide community workshops which will
help educate members and their communities on
important topics including fraud, financial wellbeing
and digital skills, for which we have a part to play.
Further, as we look to support causes in our local
communities, we will provide every branch with more
opportunities to do so, increasing the number of
members who vote for our Charity Partners by
elevating awareness of the impact we make.
The Skipton Group remains committed to donating
1% of its pre-tax profit to charity each year. For 2024
this means we have donated over £3m to over 500
charitable causes across our Group based on our
2023 pre-tax profits.
The causes we donate to are aligned to our overall
purpose through charity partnerships and focused on
three core areas to support our communities:
• Helping people to have a home
• Championing warm and efficient homes
• Supporting better financial education
Our members and colleagues have a say in which
strategic charity partner we donate a proportion of
our profits to. At our AGM in June 2024, our
members voted to support Age UK with our 2023
donation to help people have a home, whilst our
colleagues voted to support National Energy Action,
aligned to championing warm and efficient homes.
We also continue to support colleague and
community schemes through the Skipton Building
Society Charitable Foundation (which has now
donated over £3m since its launch in 2000).
(December 2023: £2.9m)
Donated to good
causes in 2024
Performance & Strategy Governance Financial Statements
Other Information
This year we were delighted to support our communities to gift the magic of Christmas, with a £50,000
donation to Cash for Kids ‘Mission Christmas’ toy collection appeals across our entire branch network
and Skipton customer service centre, and a host of PR activity to help amplify our campaign. We enrolled
the support of BBC’s Dilly Carter to help shout about our campaign, raising awareness and ensuring more
children have a gift to open at this special time of year.
Number of
charities supported
in 2024
Skipton Group Annual Report & Accounts 2024 28
We will continue to invest in resilient technology as
we innovate and build new platforms. Our systems
will remain robust and make it even safer for
members and customers to do business with us.
The financial services sector is rapidly evolving due
to technological advancements. The demand for
digital experiences continues to grow as consumers
want faster, more convenient, and secure transaction
methods, which increases cybersecurity measures.
By working together across the Skipton Group, we
maximise the value and sustainability of our
technology investments and ensure our innovation
supports our core purpose. Our technology choices,
and use of data will enable products and
propositions to be created to serve the needs of our
members, customers and colleagues better.
Technology and Data Transformation
Our commitment to service is driving significant
activity across our digital transformation
programme, replatforming our businesses with a
cloud-first approach and integrating third party
software with high quality, internally built software.
2023 marked the start of our digital transformation
programme. We have progressed at pace throughout
2024, as we successfully built the foundations for
our infrastructure.
This has been a tremendous effort from our
colleagues, challenging ourselves to deliver the most
value to our members. We have learnt to adapt -
being brave in taking different decisions throughout
our journey, championing an environment to be more
agile in delivery, and pivoting where it made sense to
do so.
Our digital transformation has seen us deliver some
further key milestones throughout the year. We’ve
migrated our telephony platform to the cloud,
upgraded our mailroom facility, and utilised AI for
document reading to drive efficiencies across our
operations. We laid the foundations for an enhanced
online authentication journey for our members who
use our mobile app and portal, addressing some of
the most common issues experienced and improving
overall customer satisfaction.
We also launched a new Skipton Building Society
and Skipton Group website to make Skipton more
accessible and engaging for all our stakeholders.
In leveraging the power of our Group, we have also
started to harness our incredible data assets which
give us unique insights across the UK housing
market, as demonstrated by the launch of the
Skipton Group Home Affordability Index. This means
we can make data led, strategic investments and
decisions that drive tangible and purposeful
difference and play a key role in supporting members
and customers and driving societal change.
As we move forward, we will continue to bring
together our data capability across the Group to
support more members and customers achieve their
aspirations of home ownership and long-term
financial wellbeing through product solutions.
Performance & Strategy Governance Financial Statements
Other Information
We’ve been recognised externally, and our progress in the transformation space has seen us receive two
awards:
• Winner of the Most Effective Strategic Transformation Programme award at the European Contact
Centre and Customer Awards
• Best Financial Services Transformation Project at the 2024 UK IT Awards
Skipton Group Annual Report & Accounts 2024 29
Enhancing Change Execution
Throughout the year, in order to deliver more value
back to our members, we continued to accelerate
our agile transformation activity, aligned to our
cultural renovation and the desire to increase our
agile maturity. We have invested in our colleagues by
providing training and professional qualifications in
the Scaled Agile Framework and in Product
Ownership, which helps us to deliver change in a way
that is aligned to industry standards. We have also
trialled and implemented new ways of working by
way of quarterly Programme Increment (PI) Planning,
bringing colleagues together to plan the increments
of work that deliver against our strategic priorities.
The dedication from our colleagues has been
inspiring, having successfully completed three PI
planning sessions with over 450 colleagues in
attendance across two days every quarter. We have
completed projects that deliver maximum value back
to our members and customers, ensuring we are
always regulatory compliant, that we fix any issues
that don’t deliver the service our customers and
members expect from us, and deliver our strategy.
We recognise that our colleagues play a critical part
in our technology enablement, and we will continue
to build out our Group technology talent. Specifically,
we are creating new technical councils across the
Group and are ensuring strategic, architectural
alignment across our technology assets, to allow us
to innovate and deliver faster.
The Board and senior management remain
committed to maintaining an inclusive culture where
we continue to invest in our colleagues’ skills,
personal and career development and well-being.
By empowering colleague decision-making close to
our members and customers, we can deliver on our
purpose. We have implemented new systems and
technology throughout the year to support our
colleagues’ development journeys and our overall
culture, improving ways of working and promoting
efficiencies.
The Skipton Group has also welcomed new faces to
the Executive team throughout the year, bringing with
them a wealth of experience and leadership in
continuing to drive forward a sustainable business
for our members.
Performance & Strategy Governance Financial Statements
Other Information
Being an Inclusive Employer of Choice
We are building an increasingly diverse pipeline of
talent and investing in our places of work, not only
through the branches but through our central contact
centres.. Last year we defined a target ambition for
our culture across the Society, building on the
behaviours our colleagues showcase on a daily
basis, and enabling us to further drive innovation in a
changing world.
Our Behaviours
• Be Accountable
• Be Brave
• Be Curious
• Be Collaborative
We believe that these behaviours and culture, along
with the unique benefits and experiences our Skipton
Group provides, offers something special to current
and future employees.
In 2024, we completed our refurbishment of The Bailey, our head office in Skipton; home to c.1,964
colleagues. The refurbishment has provided more open and collaborative spaces for our colleagues to
work face-to-face, championing innovation and really delivering value back to members.
Skipton Group Annual Report & Accounts 2024 30
As we move into 2025, we will continue to build our
Employee Value Proposition, bringing to life who we
are and what we stand for. Our current and
prospective employees will clearly understand our
purpose, our culture and history, and our approach to
personal development and career opportunities.
During 2024 we built on our commitment to build a
truly diverse workforce across our Society, and
across our Skipton Group. We are proud to have
received the prestigious Silver Status as part of the
Ministry of Defence’s Employer Recognition Scheme
supporting the Armed Forces community across
Yorkshire and the Humber region. Our Society is a
Disability Confident Committed Employer, as
awarded by the Department of Work and Pensions.
Our accreditation means we are committed to
ensuring our recruitment process and our support to
existing colleagues is inclusive and accessible to all.
We recognise that support and allyship across all
areas of Diversity and Inclusion is of the upmost
importance, and the Society is proud to have a
variety of colleague-led Employee Resource Groups
(ERG’s) who have pursued a range of successful
activities across the year. Most notably, the ERG’s
donated £5,000 per network to charities aligned to
their specific values. The Gender Equity network
supported the ‘Pass On Preloved Items (POPI)’ Baby
Bank while the Women in Technology Group
supported Disability Action Yorkshire.
The ERG’s have also spearheaded a range of other
noteworthy activities, including Skipton’s support
and attendance at Leeds Pride (co-ordinated by the
Pride Alliance Group); keynote speakers during Black
History month; and the continued partnership
between Skipton and Women into Science and
Engineering (WISE), with Skipton being a headline
sponsor of the WISE annual conference (via the
Women in Technology Group).
Defining a Clear Colleague Experience
Throughout 2024 we have enabled more of our
colleagues to focus on their personal development,
providing online and in-person development
materials tailored to individual development needs.
We’ve also enhanced our management and
leadership capabilities. Our colleagues have
undertaken courses to increase self-awareness,
develop leadership styles in line with the longer-term
societal shifts that we see on a daily basis, and to
underpin all of this, developed techniques to support
more impactful conversations.
Supporting our colleagues enables us to foster talent
across our Society and our Group, providing long
term succession planning and sustainability for the
future of our Group. We will continue to build Group
wide programmes that develop leaders and
colleagues, aligning systems, data and metrics to
enhance career mobility, both nationally and
internationally.
Supporting wellbeing in the workplace has never
been so important. This has been emphasised as a
key part of the role of our managers this year and our
community of mental health first aiders are trained
and upskilled on an ongoing basis, bringing mental
health support to our leaders and colleagues.
Performance & Strategy Governance Financial Statements
Other Information
We launched a podcast to showcase some of our diverse talent discussing their career highs and
important lessons they've learned over their careers. Titled ‘Career Catastrophes' it proved popular
charting the top 100 business podcasts in Apple Podcasts UK.
Skipton Group Annual Report & Accounts 2024 31
The split of colleagues by gender employed in the Group and Society as at 31 December 2024 is outlined
below:
1. Society Board directors only
2. Comprises Society’s senior leaders (other than executive directors) and executive directors of other Group businesses
3. Includes senior leaders of other Group businesses
Diversity and Inclusion
Inclusion is at the heart of the work we do at Skipton
Group. Our commitment goes beyond compliance,
we want to ensure every colleague feels respected,
valued, and has a sense of belonging. This not only
makes an impact on our colleagues and members,
but it also makes a difference to the communities in
which we serve.
Our aim remains to further build on our progress, to
ensure our colleagues can perform at their full
potential. We seek to provide a work environment
that is safe and accessible, free from unfair
treatment, discrimination and harassment and gives
fair and equitable access to learning, development,
reward and promotion opportunities.
We have a range of policies and practices which
support these aims and monitor their application.
The Society’s latest Gender Pay report, published in
April 2024, highlights actions we’ve taken to increase
the number of female applicants for senior roles. Our
Employee Resource Groups are an integral part
of Diversity and Inclusion. We value the contributions
they provide in enhancing policies and processes
and the support they provide for colleagues. In
supporting these networks, they have each been
provided with a budget, training, an Executive team
sponsor and protected working time to drive activity
forward.
Change activity continues to enhance our colleague
data to understand our workforce and enable
development through evidenced based and data
driven initiatives. Throughout 2024 we enhanced the
capability to overlay diversity data with people
processes, identifying trends and providing
interventions as required.
We have continued to partner with organisations like
WISE (Women in Science and Engineering) to help us
to further embed our commitment to ensuring
gender parity across the Society. We are continuing
our membership with Inclusive Employers and
Progress Together, an organisation focused on
increasing the representation of those from lower
socio-economic backgrounds into senior roles in the
financial sector.
External benchmarking has been used to scrutinise
our socio-economic background data, to further
understand our baseline and make evidenced-based
and data-driven decisions on interventions required
to support progression for colleagues of all
backgrounds.
Furthermore, we are continually reviewing and
improving our People Policies, one example being
development of a Colleague Transition policy which
outlines the support and assistance that can be
provided to colleagues who are undergoing gender
reassignment. Updates to our processes will reflect
the changes outlined in the policy to ensure they are
inclusive for any colleagues transitioning.
Through dedicated events, we bring our colleagues
together to spotlight inclusion, with a dedicated
month in June, and a fortnight in October. This year
we have delivered over 40 sessions to colleagues on
all areas of inclusion and wellbeing.
100%
63%
57%
46%
38%
43%
54%
Executive Directors
Non-Executive Directors
Senior Leaders
Other Employees
Male Female
Performance & Strategy Governance Financial Statements
Other Information
1
2
3
100%
63%
52%
43%
38%
48%
57%
Executive Directors
Non-Executive Directors
Senior Leaders
Other Employees
Male Female
Skipton Group
Society
(3 colleagues)
(8 colleagues)
(84 colleagues)
(18,089 colleagues)
(3 colleagues)
(8 colleagues)
(73 colleagues)
(2,412 colleagues)
Skipton Group Annual Report & Accounts 2024 32
Responsible and sustainable
It is essential that businesses take action to help tackle the profound environmental and social challenges our
country and our planet face. This is a responsibility we place significant importance on. As a member-owned
business, we don’t have shareholders or dividends to distribute. Instead, our responsibility is to maintain
financial sustainability, generating profit that can be reinvested into our business for the long-term benefit of
our members.
Our strategy for making positive change aligns with five of the United Nations (UN) Sustainable Development
Goals. The Group’s approach is also underpinned by an alignment with the UN Principles for Responsible
Banking to which our banking businesses, the Society and SIL, are signatories.
Our separate 2024 Group Sustainability Report documents our progress on how we are evolving to meet social
and environmental challenges, and the ways we are holding ourselves accountable.
Climate and Energy Efficiency
Ongoing higher energy costs combined with the UK’s
poorly insulated housing stock put a significant
strain on the finances of many households, hitting
those on the lowest incomes the hardest. That’s why
we will play our part to support customers with
retrofitting and making their homes more energy
efficient, in line with national net zero targets. Our
ability, and the ability of our customers, to achieve
net zero are heavily reliant on external factors. These
include the actions of the UK Government and clear,
early policy intervention, specifically those linked to
upskilling and suitable home retrofit funding
schemes. Please see Helping People Have a Home
to read more on our retrofit project and Making
Membership Matter to read about how we are
supporting members and colleagues to improve the
energy efficiency of their homes.
Supporting our customers and communities
The Skipton Group is united by a common purpose
to help more people have a home, help people save
for life ahead and support long-term financial
wellbeing. We believe this is the most significant
contribution we can make to building a better, more
sustainable society, fit for the future.
Performance & Strategy Governance Financial Statements
Other Information
Goal 8
Decent Work and
Economic Growth:
“Promote sustained,
inclusive and
sustainable
economic growth,
full and productive
employment and
decent work for all”
As a leading lender
and operating one of
the largest networks
of high street estate
agencies, we’re well
placed to help widen
access to financial
services and the
housing market,
supporting both
renters and
homeowners.
Goal 10
Reduced
Inequalities:
“Reduce inequality
within and among
countries”
With over 18,000
people working
across the Group,
we recognise there’s
a significant
opportunity to
champion diversity
and inclusion
across our
businesses.
Goal 11
Sustainable Cities
and Communities:
“Make cities and
human
settlements
inclusive, safe,
resilient and
sustainable”
We can use our
skills and knowhow
to help members
and customers
make their homes
more sustainable.
Goal 16
Peace, Justice and
Strong Institutions:
“Promote peaceful
and inclusive
societies for
sustainable
development, provide
access to justice for
all and build effective,
accountable and
inclusive institutions
at all levels”
Financial
sustainability
underpins our
decision making, in
turn creating mutual
value for members,
customers,
colleagues and
communities.
Goal 13
Climate Action:
“Take urgent action
to combat climate
change and its
impacts”
We're committed to
reduce our carbon
footprint, and the
emissions related to
our lending and
supply chain.
Skipton Group Annual Report & Accounts 2024 33
Responsible supply chain
The Society works in partnership and closely
monitors relationships with key suppliers. On an
ongoing basis we assess any risk of adverse impact,
on our customers, colleagues or the environment, as
a result of these relationships. Our suppliers are
requested to agree with the Society’s Code of
Conduct as part of our onboarding process. This
includes commitment to being a responsible and
sustainable business, as well as supporting our
business ethics and complying with the Modern
Slavery Act 2015.
Suppliers’ service-delivery is tracked against key
performance indicators to ensure the service
provided is of an acceptable standard and the
Society are working with EcoVadis, a sustainability
ratings provider, to assess the sustainability
standards within our supply chain.
In 2025, we will work across the Group to identify
opportunities to reduce upstream emissions in our
supply chain. This will involve developing and
tracking a supplier engagement plan to understand
our most critical (“material”) suppliers' approach to
reducing emissions – initially at a Society level but
then expanding out to other Group companies. We
appreciate that this will require supplier participation
and there is a risk that some suppliers may not
participate. The data we collect from this will
therefore be limited.
Being Accountable
The Group is committed to a zero-tolerance
approach to instances of bribery or corruption
across any area of our business. We have anti-
corruption and anti-bribery policies in place in each
business line, which are readily available. The
policies provide guidance about what constitutes a
bribe and prohibits the offering, giving, solicitation or
the acceptance of any bribe to or from any person or
company, by any individual colleague, agent or other
person or body acting on behalf of the Skipton
Group. In addition, our colleagues and employees are
required to complete annual training to refresh their
knowledge.
The Society’s Board fully supports the objectives of
the Modern Slavery Act 2015, further details of which
can be found at skipton.co.uk/about-us/governance.
We have a position of zero tolerance of modern
slavery and human trafficking in any form in our UK
business and supply chains. Suppliers to our UK-
based business lines must comply with the Modern
Slavery Act 2015, where applicable, and ensure their
supply chain is transparent about the process
through which employees are managed.
The Group also has regard to the above matters as
part of our risk assessment processes; a full
description of our principal risks and how we
manage these is found in the Risk Management
Report.
To read more on how we keep ourselves
accountable and for details of our corporate
governance, please see the Corporate Governance
Report.
Climate-related disclosures
The devastating effects of climate change are
happening right now, including the extreme weather
conditions we are seeing. Without urgent action, the
impacts will become even more damaging in the
future. So, to reduce the impacts of climate change,
the UK has made a commitment: to reach net zero
by 2050.
As a Group, we not only recognise the importance of
reducing the impact our own operations have on the
environment. We want to raise awareness and
support members in decarbonising their homes –
with emissions from households being a key
contributor to the UK’s carbon footprint.
The Group continues to embed climate resilience in
our decision-making. We continue to follow the
recommendations of the Taskforce on Climate-
related Financial Disclosures (TCFD) and present
information against the TCFD reporting framework,
under the four pillars: Governance, Strategy, Risk
Management, and Metrics and Targets. Further
details on how we manage climate-related risk can
be found in the Group Climate-related
Disclosures published on our website
www.skipton.co.uk.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 34
Board oversight of climate-related risks and
opportunities
The Society’s Board has delegated oversight of
climate-related risk for the Society and its subsidiary
businesses to the Board Risk Committee, although
ultimate oversight continues to reside with the
Society’s Board.
Board Risk Committee (BRC)
In 2024, the BRC was informed about climate-related
issues on three separate occasions. Recent areas of
focus include assessment of:
• Group climate risk scenario analysis results;
• mortgage credit risk - climate risk management
information; and
• credit risk appetite limits.
The Board Remuneration Committee
ESG performance is linked to remuneration through
the Single Variable Pay Arrangement (SVPA), the
discretionary annual bonus plan in which the
executive directors and selected members of the
Group Executive Committee participates. The
measures used to calculate outcomes under this
scheme are selected because they directly support
our ESG purpose, strategic priorities and goals. For
further disclosure on performance objectives please
refer to the Directors' Remuneration Report.
The Board Audit Committee (BAC)
The BAC is responsible for review and approval of
external sustainability reporting, including the annual
Climate-Related Financial Disclosures.
Board Training
To help the Board provide effective oversight of our
response to climate-related risks, a dedicated
climate risk training session led by external
specialists was held during 2024.
Management’s role in assessing and managing
climate related risks and opportunities
The Group Executive Committee and the boards of
subsidiary firms are responsible for the proactive
management of the financial and operational risks
arising from climate change and the strategy to
mitigate these risks. Climate-related risks are
overseen by the Society’s Executive Risk Committee
which has a reporting line into the Group Executive
Committee.
The Society has embedded capabilities to meet the
requirements of the PRA’s Supervisory Statement
3/19 (SS3/19) ‘Enhancing banks’ and insurers’
approaches to managing the financial risks from
climate change’. Following the implementation of a
new target operating model at the beginning of 2024,
Senior Management Function responsibility for the
identification and management of the financial risks
from climate change transferred from the Group
Chief Risk Officer to the Group Chief Financial
Officer.
The Climate Change Risk Forum (CCRF) includes
senior representation from around the Group and
meets on a periodic basis to coordinate activity
associated with the identification, assessment and
monitoring of climate risk. During 2024, the CCRF
members reviewed the key physical and transition
risks to which the Group and the Society are
exposed.
The Stress Testing Steering Committee, which has a
reporting line into the Society’s Executive Risk
Committee, is responsible for review and challenge
of the design of the climate risk scenarios, the
assumptions applied and the outputs, with final
approval provided by the BRC.
This year, we established the Group Sustainability
Committee (Group SusCo) to provide executive
oversight and monitoring of the delivery of the
Group’s approach to sustainability, including our
approach to achieving net zero. During 2024, the
Group SusCo received an update on the climate-
related risk scenario analysis results and provided
input into the Group net zero targets. Further
information on the governance of sustainability
matters can be found in the 2024 Group
Sustainability Report.
Connells Group operates a group Audit & Risk
Committee which reports directly to the Connells
board. Management responsibility for financial risks
from climate change is allocated to the Connells
Group Chief Finance Officer. For the other main
subsidiaries, the management responsibility sits with
the respective CEOs and boards.
Performance & Strategy Governance Financial Statements
Other Information
Governance: Governance across the Skipton Group around climate-related risks and opportunities.
Skipton Group Annual Report & Accounts 2024 35
Performance & Strategy Governance Financial Statements
Other Information
Climate-related risks and opportunities the
organisation has identified over the short, medium,
and long-term
During 2024, the members of the Climate Change
Risk Forum completed a review of the key climate-
related risks that are likely to impact the Group.
Further details on the potential risks identified can be
found in the Group Climate-related Disclosures
Report published on our website www.skipton.co.uk.
The risks have been split into transitional risk and
physical risk and a time horizon has been assigned
to each risk:
• Short-term: <5 years, aligned with the Group’s
financial planning horizon
• Medium term: 5-10 years, covering the main
horizon for key transition risks
• Long-term: 10+ years, covering the future position
including key physical risks
Climate change also presents potential
opportunities, for example to build business
resilience and develop new products, for our
customers.
Impact of climate-related risks and opportunities on
organisational business, strategy and financial
planning:
We have considered the impact of transitioning to a
low-carbon economy and the physical risks from
climate change. Consideration has also been given
to the impact of climate risks on our Group going
concern assessment - please see the Directors'
Report. An assessment of climate change on the
Society’s financial position has been conducted and
separately Connells Group have considered the
financial impact of the risks on its income and costs,
business strategy and financial planning.
While climate-related risk may impact our business
model in a range of ways, the most material
potential impact relates to credit risk in our
residential mortgage portfolio. Changes in climate
have the potential to increase the frequency and
severity of physical risks, which could lead to an
increasing number of properties subject to physical
flooding or subsidence, for example. This could
potentially result in a decrease in the valuation of the
property which is used as collateral to mitigate
mortgage credit risk. In addition, transitional risks
associated with progress towards a net zero
economy could lead to reduced property valuations
or affect a borrower’s ability to service their
mortgage loan.
The Society has set quantitative Credit Risk Appetite
limits to manage the financial risks from climate
change. Limits are in place for the physical and
transition risks identified as high-risk segments from
the annual scenario analysis activity. We manage our
climate risk exposures where possible and have
implemented enhanced lending controls for flooding
and coastal erosion to provide further physical risk
mitigation. We continue to monitor Energy
Performance Certificate (EPC) transition risk to track
mortgage portfolio property retrofitting.
We are also taking action to help the transition
towards a net zero carbon economy, including
playing a bigger role to support the improvement of
energy efficiency of UK homes and to support our
customers to improve their residential energy
efficiency.
Resilience of the strategy, taking into consideration
different climate-related scenarios, including a
below 2°C rise in global temperature scenario
To help inform our strategic planning and determine
the impact of the financial risks from climate change
on our overall risk profile and business strategy, in
2024 we performed detailed quantitative analysis,
with qualitative assessments for less material
exposures. In each case, through the combination of
existing risk management practices and existing
climate-related actions, no areas of concern were
identified.
The most material risks are primarily focused on the
impact of climate change on our residential
mortgage portfolio. Dedicated quantitative climate
risk stress testing on the Group’s credit risk
management was conducted across four climate
risk scenarios, including a below 2°C scenario. The
scenario narrative was created by Skipton, informed
by climate pathways such as the Network for
Greening the Financial System (NGFS) scenarios.
This included assessing the residential lending
portfolio at property level to determine the potential
impact of key climate-related physical and
transitional risks. A quantitative assessment of IFRS
9 Expected Credit Losses (ECL) for the credit risk in
the residential mortgage portfolio (excluding equity
release) was also performed.
In addition, Connells Group have considered the
relevant scenarios with quantitative modelling of a
below 2°C scenario, with additional assumptions for
the volume of properties sold.
Strategy: impacts of climate-related risks and opportunities on Skipton Group strategy and financial planning.
Skipton Group Annual Report & Accounts 2024 36
Performance & Strategy Governance Financial Statements
Other Information
Processes for identifying and assessing climate-
related risk
The annual climate risk impact assessment seeks to
identify potential risks that could result in financial or
reputational damage and is reviewed by members of
the Climate Change Risk Forum (CCRF). Through the
CCRF we review climate-related risks to which the
Group is exposed. We continue to refine and
enhance our approach as new data and best practice
emerges.
The assessment to identify risks involves relevant
subject matter experts from across the Group and
considers the likelihood of risk crystallisation and
potential risk impact to the Group and our
customers. We continue to make progress to
develop a more consistent and collaborative Group
approach as subsidiaries continue to evolve their
understanding of climate risk across their individual
businesses.
Processes for managing climate-related risks
Consideration of climate risk is incorporated into
relevant first line processes, risk appetites and
control frameworks. With respect to mortgage credit
risk, identified as our key climate-related risk, our
current controls for managing new lending include
conducting a physical or desktop inspection of the
property for higher loan to values, where any known
flood risk or risk of coastal erosion will be reflected
in the valuation.
Any postcode identified as potentially at risk of
future coastal erosion requires a desktop or physical
survey to capture local knowledge of the risks to
each property.
The Society’s loan conditions require insurance at
the point of completion which provides assurance
that the property is insurable at that point in time.
Our concentration risk rules consider flood risk.
How processes for climate-related risks are
integrated into overall risk management
Our ongoing approach to credit risk management is
carefully considered, based on experience from our
stress scenario analysis. Regular monitoring
provides oversight of any emerging concentration
risks on the mortgage portfolio.
We continue to be prudent and proportionate in our
approach; balancing the risks with any adverse
impacts on our members and the wider UK housing
market.
Risk management framework
Our climate-related risk management processes are
aligned and integrated into the Group’s risk
management processes. The Group has a formal
structure for identifying and managing risks
throughout the business. This framework is designed
to support the delivery of the Corporate Plan in line
with the Board’s overall risk appetite and is based
upon the three lines of defence risk management
model with risks rated on magnitude and likelihood.
Climate risk is managed in other risk areas through
various mechanisms including consideration as part
of the Internal Capital and Liquidity Adequacy
Assessment Processes (ICAAP and ILAAP) and the
inclusion of climate-related risks within our
Operational Risk Framework.
Further details on climate risk are included in the
principal risks and uncertainties section of the Risk
Management Report.
Risk Management: How Skipton Group identifies, assesses, and manages climate-related risks.
Skipton Group Annual Report & Accounts 2024 37
Performance & Strategy Governance Financial Statements
Other Information
The metrics used to monitor climate-related risks
are:
• Society mortgage portfolio properties classed in
the highest flood risk category
• Society mortgage portfolio properties classed in
the highest subsidence risk category
• Society mortgage portfolio properties at risk of
being impacted by coastal erosion
• Society mortgage portfolio properties by current
EPC category assessment level
• Connells Group professional indemnity claims
caused by physical climate change
• Group scope 1 and 2 GHG emissions
• Estimations of Group scope 3 value chain
emissions
• Estimations of Group scope 3 financed emissions
for the mortgage portfolio (Society and SIL)
The Society continues to monitor and manage
physical and transition risk impacts across our
mortgage portfolio and has quantitative portfolio
credit risk appetite limits to directly manage physical
risks.
Please refer to the Directors’ Remuneration Report
for further details on the integration of climate-
related performance indicators through the Single
Variable Pay Arrangement (SVPA).
Skipton’s scope 1, 2 and 3 GHG emissions
Across the Skipton Group we collect data to monitor
and assess energy used and emissions generated
across our operations. Group emissions are reported
under both the market-based and location-based
methods.
Our scope 1 and 2 GHG emissions relate to the
energy we use to operate our branches and offices,
and our company owned or operated vehicles for our
employees. Most of our operations are based in the
UK, with smaller facilities in Australia, Guernsey,
Jersey and New Zealand.
Our scope 1 and 2 location-based emissions have
reduced 11% from 2023, and our energy
consumption is down 9%. Our market-based
emissions have reduced 47% due to increased
purchasing of electricity from renewable sources, at
86% in 2024 (2023: 55%). We aim to purchase
renewable electricity tariffs, with a renewable energy
guarantee of origin (REGO) for our Group operations,
with the Society purchasing a green gas tariff, with
renewable gas certification (RGGO).
The work to lower energy used across our offices
and branches has continued throughout 2024,
switching to more energy-efficient LED lighting, and
installing smart electricity and gas meters.
Additionally, Connells Group continue the transition
of their fleet to lower emission vehicles, with 20% of
the fleet being hybrid or electric at the end of 2024.
We report estimated scope 3 data covering financed
emissions from our lending for our residential and
legacy commercial mortgage portfolio (Society and
SIL). The GHG emissions are estimated based on
the LTV ratio, property type, and EPC data available.
As at 30 September, 81% of properties in our
residential book had an EPC. In 2024, the total
attributed mortgage financed emissions increased
11% from 2023, due to an overall growth in the
mortgage balances and a slight increase in the
overall LTV ratio.
We recognise that there are certain limitations in the
collection of such data which will affect both the
metrics and our targets, and the usefulness of this
data for our strategic decision-making.
Metrics and Targets: How Skipton Group assesses and manages climate-related risks and opportunities.
Skipton Group Annual Report & Accounts 2024 38
Notes
1. Further information on our scope 1, 2 and 3 emissions, as well as our climate data limitations, can be found in the
2024 Group Sustainability Report.
2. For scope 1 and 2, where actuals data was not available, consumption was estimated using average consumption or
proxy data. 2023 data has been restated due to improved data.
3. For market-based emissions where consumption was not on a renewable electricity tariff backed by a REGO certificate
or the status was unknown, a residual or location-based factor has been applied. Our renewable gas certificates
(RGGOs) are not currently used to count towards any scope 1 emission reductions for either the market or location-
based method.
4. Estimated scope 3 financed emissions have been calculated based on an annual 30 September snapshot basis, using
the GHG Protocol Partnership for Carbon Accounting Financials (PCAF 2019) standard and using PCAF’s emission
factors. The financed emissions data for 2023 has been restated due to application of an improved methodology for
modelled EPCs and floor area data. The LTV attribution ratio applied in this method is based on the valuation of the
property at loan origination.
Targets used to manage climate-related risks and opportunities and performance against targets
We are committed to reducing the impact of our operations on the environment and to playing our part in
achieving the UK economy net zero target by 2050.
We have agreed a Group-wide approach to reduce our scope 1 and 2, and selected categories of scope 3 value
chain emissions, in line with net zero by 2050 or earlier. In addition, we have an ambition to reduce our financed
emissions intensity (kgCO2e/m2) of our residential mortgage lending in line with a net zero pathway. Further
information can be found in the 2024 Group Sustainability Report.
We recognise, to reach our net zero ambition, there are many factors and uncertainties beyond our control and
require the involvement of others including policy makers, governments, suppliers, and customers. Whilst we
appreciate that these may impact our ability to meet our climate-related targets, or make them more
challenging, and there is a risk that all or some of them will not be achieved, we continue to focus our efforts on
transitioning the factors within our control.
Scope 1 and 2
(notes 2 and 3)
Metric Detail
2024 2023
Scope 1
- offices, branches and company vehicles
tCO
₂
e 3,380 4,023
Scope 2 (location
-based) electricity
tCO
₂
e 5,343 5772
Scope 2 (market
-based) electricity
tCO₂e
1,231 4,618
Scope 1 & 2 energy usage
kWh 42,501,013 46,851,915
Total scope 1 & 2 emissions (location
-based)
tCO₂e
8,723 9,794
Scope 1 & 2 emissions from UK operations
% 99% 99%
Total scope 1 & 2 emissions (market
-based)
CO₂e
4,611 8,640
Scope 1 & 2 location
-based emissions intensity ratio
tCO
₂
e / £m turnover 5.39 6.30
Scope 3 financed emissions
(note 4) 2024 2023
Estimated attributed financed emissions
- mortgage
lending from residential and commercial mortgage
portfolio
Category 15 financed
emissions (tCO
₂
e)
267,117 241,102
Performance & Strategy Governance Financial Statements
Other Information
Group GHG emissions and energy data (note 1)
Skipton Group Annual Report & Accounts 2024 39
Key Financial Performance Indicators
Group profit before tax to ensure we generate the capital
necessary to grow the business
Page
40
Underlying Group profit before tax to ensure we generate the
necessary capital to grow the business (note 1)
Page
41
Group net interest margin (% of mean assets) to manage the
earnings of our business
Pages
42 - 44
Costs to mean assets (Society only) to maintain a manageable
cost base to ensure we remain efficient
Page
42
Group retail funding (as a % of total funding) to ensure we can
fund most of our mortgages through retail savings
Page
47
Liquidity Coverage Ratio (LCR) (Prudential Group) to ensure we
hold sufficient levels and quality of liquidity (note 2)
Page
45
Common Equity Tier 1 (CET1) ratio (Prudential Group) to
ensure financial strength by having a strong (risk weighted)
capital base (note 2, 3)
Page
48
Leverage ratio (Prudential Group) to ensure financial strength
by having a strong (non-risk weighted) capital base (note 2, 3)
Page
48
£298.8m
£333.4m
£318.6m
2022
2023
2024
xx
Notes
1. Included as a key measure in the executive directors’ remuneration policy calculations. For further details see the
Directors’ Remuneration Report.
2. The Prudential Group comprises the entire Group except Connells Group, Jade Software Corporation Limited and a
small number of other entities whose activities are not closely aligned with the core business.
3. These ratios apply International Financial Reporting Standard 9 (IFRS 9) transitional arrangements.
£297.7m
£308.6m
£302.3m
2022
2023
2024
1.35%
1.53%
1.28%
2022
2023
2024
0.66%
0.72%
0.73%
2022
2023
2024
78.9%
83.2%
85.6%
2022
2023
2024
175%
173%
193%
2022
2023
2024
25.8%
26.0%
28.7%
2022
2023
2024
6.8%
6.7%
6.6%
2022
2023
2024
Performance & Strategy Governance Financial Statements
Other Information
“A robust financial performance across
all businesses in our Group in 2024
ensures that we can continue to invest
for the future benefit of our members
whilst providing the products and
service levels that they require today.
We have maintained our strong capital
position and have continued to optimise
our liquidity balances to ensure we
remain resilient in challenging
conditions”
Paul Chambers,
Group Chief Financial Officer
Skipton Group Annual Report & Accounts 2024 40
Financial performance
Summary Group Income Statement
2024 (£m) 2023 (£m)
Net interest income 488.4 542.8
Fees and commissions receivable 1,109.6 985.4
Fair value gains on the financial instruments mandatorily held at FVTL 18.0 23.5
Other operating income 3.2 2.9
Total income 1,619.2 1,554.6
Administrative expenses (1,312.3) (1,224.8)
Operating profit before impairment loss and provisions 306.9 329.8
Impairment and provisions 11.7 3.6
Total Group profit before tax 318.6 333.4
Tax expense (78.1) (78.8)
Total Group profit for the year 240.5 254.6
The Group delivered a robust financial performance
in 2024, achieving £318.6m profit before tax (PBT)
(2023: £333.4m) despite challenges from a shifting
interest rate environment. Growth in estate agency
and surveying income in Connells Group, driven by a
resilient housing market, offset pressures on net
interest income in the Society and SIL as Base Rate
peaked mid-year before easing to 4.75% by
November.
The Society delivered a resilient performance,
generating £209.9m (2023: £283.7m) in profits
(excluding income from shares in subsidiary
undertakings). SIL performed similarly, with PBT of
£31.0m (2023: £47.3m). Whilst the higher interest
rate environment supported increased interest
income, a proportionally larger increase in interest
payable led to an anticipated decline in overall net
interest compared to last year (as detailed on pages
42 to 44). In contrast, Connells Group achieved
increased profits of £61.3m (2023: £13.8m), as
housing market activity continued to improve (as
detailed on page 44).
Managing our cost base remains a key component
of our strategy. For the Group, administrative
expenses increased in 2024 by £87.5m (7.1%) to
£1,312.3m (2023: £1,224.8m). Spend in the year
reflects further investment in our services and in our
people, particularly in Connells Group where stronger
trading led to an increase in variable compensation;
enabling better outcomes for our members.
The Group recognised a reduction in expected credit
losses on loans and advances to customers of
£17.1m during the year (2023: £3.1m reduction) as
the economic outlook started to improve. Movement
in impairment in the year predominantly relates to
loans and advances in the Home Financing business,
and is detailed on page 43.
Ongoing proactive management of our credit risk
exposure from our mortgage portfolios remains a
key priority, in order to minimise losses to the Group
and to help our customers through financial
difficulties wherever possible. The Group adopts a
responsible approach to mortgage lending, ensuring
that we only lend where the level of risk is acceptable
and where customers are assessed as being able to
afford to repay the loan.
Consolidated total assets have increased by 4.8% to
£39.0bn (2023: £37.2bn) predominantly due to
growth in our mortgage balances, which was partly
offset by a reduction in surplus liquidity as we
sought to optimise our asset mix.
Both residential mortgages and retail savings have
seen strong growth in a competitive market; helping
more people have a home and make their money
work harder. Our mortgage balances remain mostly
funded by retail deposits, our primary source of
funding – in line with our mutual ethos; whilst we
also make use of longer-term funding from the
wholesale markets to minimise refinance risk,
accessing funds from a number of diverse sources.
This balanced approach helps us offer competitive
rates and align the duration of our funding with the
longer-term mortgages many of our members want.
In the year, the Society raised funding by the
issuance of a new covered bond through the
wholesale markets, further details of which are noted
on page 47.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 41
Alternative performance measures
The Board monitors and reports profits at a statutory level, governed by accounting standards and practices,
and at an ‘underlying’ level to give greater transparency of the performance of the Group’s ongoing trading
activities. Per the Group’s policy on alternative performance measures agreed by the Board Audit Committee,
we also report earnings before interest, tax, depreciation and amortisation (EBITDA) for Connells’ Group.
^The £9.3m gain (2023: £11.0m gain) is comprised of fair value losses of £12.6m (2023: £9.2m gains) and fair value gains
of £21.9m (2023: £1.8m gains) on the associated derivatives held to economically hedge these fair value movements, as
shown in Note 5 to the Accounts.
Underlying Group Profit 2024 (£m) 2023 (£m)
Total Group profit before tax 318.6 333.4
Less fair value gains in relation to the equity release portfolio^ (9.3) (11.0)
Less fair value gains on share warrants and equity share investments (7.0) (13.8)
Underlying Group Profit before Tax 302.3 308.6
Underlying Group PBT
Underlying profit is used to measure the progress of
the Group against its strategic objectives and the
Board uses this measure to aid in strategic decision-
making. The following items are excluded from
statutory profit to arrive at underlying profit: gains or
losses on disposal of Group undertakings,
impairment of Group undertakings, fair value
movements in relation to the equity release portfolio,
and fair value movements in respect of share
warrants, equity share investments and Group
undertakings.
This reflects the Group’s current strategy and
business model, the majority of these items being
generated from the Group’s investments in other
entities not considered part of the Group’s core
strategy and thus excluded from underlying profit on
that basis. The other items listed above are excluded
from underlying profit on the following basis:
• Fair value movements in relation to the equity
release portfolio and associated derivatives -
under IFRS 9, the equity release portfolio is held
entirely at fair value, as are the associated
derivatives, with resulting gains / losses taken to
the Income Statement and as a result, the Group
is exposed to significant income statement
volatility. Such gains / losses are therefore
excluded from underlying PBT on the grounds
that they are not reflective of the underlying
trading performance.
• Fair value gains or losses on equity share
investments and share warrants are recognised
through the Income Statement (except for certain
investments elected to be recognised through
other comprehensive income). As above, we
exclude any gains or losses from the disposal of
Group undertakings, and therefore on the same
basis, fair value gains / losses on equity share
investments and share warrants are also
excluded from underlying PBT.
Underlying profit provides greater transparency of
the performance of the Group’s ongoing trading
activities and improves the comparability of
information between reporting periods.
The Group’s policy is to not adjust for amortisation
charges or acquisition costs when calculating
underlying profits. Therefore, amortisation charges
arising from the acquisition of Countrywide by
Connells Group in March 2021 are included within
underlying PBT - these charges will not recur in the
medium term.
Connells Group EBITDA - This is a common
performance measure used in the estate agency
industry, and which is calculated by excluding
interest charged on debt financing, interest received,
taxes paid, depreciation and amortisation, gains /
losses on investments, impairment and fair value
movements of group undertakings, profits or losses
from joint ventures and dividends paid to non-
controlling interests.
Performance & Strategy Governance Financial Statements
Other Information
The Group maintains sufficient levels of high-quality
liquid assets in order to support growth plans and
recognise market uncertainty. Stress testing
scenarios are regularly run to help ensure we remain
within our liquidity risk appetite and meet all
regulatory requirements. Extreme economic
scenarios are also run to ensure our contingency
plans remain robust.
Capital resources are in excess of regulatory
requirements, with substantial buffers across risk-
based and leverage frameworks. Skipton’s Common
Equity Tier 1 (CET1) ratio increased to 28.7% (2023:
26.0% - restated), driven by increased total
regulatory capital; and the leverage ratio was 6.6%
(2023: 6.7%).
Skipton Group Annual Report & Accounts 2024 42
Group PBT 2024 (£m) 2023 (£m)
Society 209.9 283.7
SIL 31.0 47.3
Connells Group 61.3 13.8
Other^ 16.4 (11.4)
Total 318.6 333.4
Group Underlying PBT 2024 (£m) 2023 (£m)
Society 200.6 272.7
SIL 31.0 47.3
Connells Group 54.3 2.5
Other^ 16.4 (13.9)
Total 302.3 308.6
Performance by segment
The Group’s total profit before tax and underlying profit before tax by key business line was as follows:
^ Information regarding segments that are not separately reportable is combined within the ‘Other’ category, together with
the impact of Group consolidation adjustments.
Society
The Society reported lower underlying pre-tax profits
of £200.6m for the year (2023: £272.7m).
Net interest income earned on assets (principally
mortgages, other loans and advances, and liquidity),
less that paid on liabilities (principally retail savings,
wholesale funding, subscribed capital and
subordinated debt) amounted to £407.2m (2023:
£458.7m).
The Society’s net interest margin was lower for 2024
at 1.14% (2023: 1.39%). The Base Rate remained at
5.25% throughout the first half of the year, creating
opportunities to generate higher interest income,
which we are investing to deliver future benefits for
our members; before the first reduction of 0.25% on
1 August. Interest payable rose more quickly,
however, as we continue to ensure our members
receive above-market interest rates on their savings;
ultimately impacting upon interest margin.
Administrative expenses for the Society, including
depreciation and amortisation, increased by £22.9m
compared to last year, rising to £262.0m (2023:
£239.1m). Of this increase, £5.0m relates to the
Bank of England levy, which replaced the Cash Ratio
Deposit scheme, used to fund the Bank’s policy
functions.
We are investing heavily in our service, through
improved digital pathways, in order to create
excellent customer and member experiences; and in
our people, including colleague pay awards, together
with continued investment in our principal office and
branch network. In the short term this has meant an
increase in costs through targeted investments,
however our focus on efficiencies and service
enhancement remains.
Despite increased investment, our ratio of costs to
mean assets, a traditional measure of efficiency,
remained relatively stable at 0.73% (2023: 0.72%)
reflecting our strong balance sheet growth (as
outlined on pages 45 to 47). This is expected to
reduce significantly over the life of our Corporate
Planning horizon, post-investment, as cost savings
come to fruition.
Performance & Strategy Governance Financial Statements
Other Information
£200.6m
£209.9m
£31.0m
£31.0m
£54.3m
£61.3m
£16.4m
£16.4m
Group
Underlying
PBT
Group
PBT
Society SIL Connells Group Other
Group
PBT
Group
Underlying
PBT
Skipton Group Annual Report & Accounts 2024 43
Home Financing - Our Home Financing business is
designed to provide finance in order to access the
housing market and ‘help more people have a home’.
Gross mortgage advances in our Home Financing
business were £5,940m (2023: £6,326m), whilst net
lending was £2,375m (2023: £2,883m). Despite the
uncertain economic environment, the Home
Financing business achieved strong net mortgage
book growth in the period of 9.0% (2023: 12.3%),
without compromising the quality of our mortgage
assets.
Residential mortgages in arrears by three months or
more totalled 541 cases representing only 0.29% of
mortgage accounts (2023: 419 cases, representing
0.23%). An increase in arrears was anticipated as
cost-of-living pressures started to flow through to
customers, particularly for those coming off low
fixed rates. However, arrears remain low, and this is
testament to our aforementioned proactive credit
management. Despite the increase in arrears,
impairment held against residential mortgages has
reduced.
At the year end, the Home Financing business’s
residential impairment loss allowance was £12.8m
(2023: £27.9m), with a related credit to the Income
Statement of £14.1m (2023: £3.5m credit). These
movements reflect the impact of changes to the
Group’s forward-looking economic assumptions,
which have been updated during the year to reflect
changes in the external environment, and the impact
of revisions to certain judgemental adjustments,
including improving affordability in line with the
reducing Base Rate (as discussed further in Note 1v)
to the Accounts).
The commercial lending portfolio, closed to new
business since 2008, stands at £114.3m (2023:
£135.2m) with an average loan size of £231.2k. The
proportion of accounts in arrears by three months or
more in this portfolio was 1.69% (2023: 1.62%). The
commercial impairment loss allowance stood at
£4.7m (2023: £9.0m), with a related credit to the
Income Statement of £2.9m (2023: £0.9m credit).
The reduction in the impairment allowance is
principally due to changes in portfolio quality, with
the level of allowance required reducing over time as
this closed book continues to run-off.
Home Financing holds an equity release mortgage
book which is closed to new business. We have seen
a net fair value gain on our equity release portfolio
and associated derivatives of £9.3m (2023: net gain
of £11.0m). This net fair value gain is driven by
changes in market expectations of long-term interest
rates, inflation and house price growth.
Refer to Note 15 and Note 18 to the Condensed
Consolidated Financial Statements for further details on
loans and advances to customers and our equity release
portfolio.
Money
- Our Money business helps our members’
‘money work harder’ and combines our savings and
financial advice businesses with our online, branch
and contact centre capabilities.
Savings balances increased by £2,317m in the year,
which represents growth of 8.9% (2023: 15.4%)
compared to the UK savings market where net
savings grew by only 5.1% (Source: Bank of England
Statistics, December 2024).
LISA customers continue to be well represented in
our customer base and at 31 December 2024 we had
167,660 LISA customers (2023: 164,956) with total
balances of £1,170m (2023: £1,153m), saving hard
for their first home or for later life.
The Society’s net non-interest income, which is
predominantly made up of financial advice fees and
commissions receivable, was £43.9m (2023:
£39.9m). Funds under management, as part of our
financial advice offering, totalled £4.7bn as at the
year end (2023: £4.3bn).
(2023: 12.3%)
Mortgage book
growth rate
(2023: 164,956)
Lifetime ISA
customers
(2023: 15.4%)
Savings balance
growth rate
(2023: 0.23%)
Residential mortgages
in arrears by three
months or more
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 44
Skipton International Limited (SIL)
SIL recorded underlying pre-tax profits in the year of
£31.0m (2023: £47.3m). The decrease in profits
reflects an increase in cost of funds, due to the
higher interest rate environment; which has impacted
SIL’s net interest margin, reducing to 1.97% (2023:
2.37%) combined with a reduction in the balance
sheet, as noted below.
Furthermore, SIL has strengthened its customer
offering and strategic implementation, and continued
to increase capacity in back-office teams, while
improving their control environment, which has
resulted in an increase in administration expenses
during the year. The ratio of costs to mean assets
increased to 0.81% (2023: 0.47%) due to the higher
costs, impacting PBT, with administrative expenses
as a percentage of income rising to 41.2% (2023:
19.9%). Administrative expenses rose by 79.8% to
£21.4m (2023: £11.9m) as a result of this
investment. Excluding investment-related costs of
£6.3m, administrative expenses total £15.1m.
SIL’s savings book reduced by 1.2% in the year to
£2,418m (2023: £2,446m). SIL also reported a
reduction in its mortgage book, which decreased by
2.3% to £2,101m (2023: £2,151m); the quality of the
mortgage book remains good, with only 10 cases in
arrears by three months or more (2023: four cases).
The business has purposefully slowed growth in the
year as it focusses on a project to transition its
offering in order to better support clients in the
future.
Connells Group
An improvement in UK housing market conditions in
2024, as interest rates stabilised and
macroeconomic factors such as inflation reduced,
created a more positive outlook. Whilst the general
election provided further clarity to the market,
helping Connells Group to achieve underlying PBT of
£54.3m (2023: £2.5m). EBITDA, a more commonly
used performance measure in the estate agency
industry, was £108.3m (2023: £63.7m).
The number of properties that the business arranged
the sale of during the year was 11% higher than in
2023, reflecting the improved market conditions and
growth in market share. The surveying business also
benefitted from the increased activity, whilst average
fees have been strong. The financial services
proposition continues to perform well. The number
of mortgages arranged increased by 7%, with the
value of lending generated for UK mortgage
providers during the year totalling £31.7bn (2023:
£30.9bn).
The lettings business has continued to grow, with
properties under management increasing to 126,590
at the year end (2023: 125,666). The Group is
currently re-letting over 79% (2023: 77%) of
properties at the end of their tenancies and rental
arrears have remained low, representing just 5.0% of
tenancies managed (2023: 5.3%).
Administrative expenses totalled £1,008.9m (2023:
£938.6m), an increase of £70.3m (7.5%) on last year.
This was driven in the main by higher wages and
salaries, taking into account annual pay increases
and higher variable pay as a result of improved
trading in the year. With over 15,000 employees,
there will be cost pressures in 2025 as a result of the
increase in National Living Wage and employer’s
national insurance contributions from April 2025.
Nevertheless, Connells intends to make significant
investment in technology in 2025 to support its
people, customers and provide a platform for further
growth.
Connells Group enters 2025 with a 33% higher sales
pipeline than 2024, due to the higher level of sales
towards the end of the year. Mortgage rates continue
to be stable, inflation has reduced, and the Bank of
England Base Rate is trending down slowly. While
changes to stamp duty for first-time buyers and
second homeowners will have an impact on
transactions, there remains steady levels of stock
and there are a good number of buyers in the market.
Sales are expected to continue at or above current
levels into 2025, and Connells Group is well placed to
take advantage of whatever market conditions
prevail.
Other
SBF generated a pre-tax profit of £10.8m, up 12.4%
on last year (2023: £9.6m). Total drawn funds stood
at £190.1m as at 31 December 2024, a record level
(2023: £171.2m), despite total client numbers
remaining largely static at 871 (2023: 872). The
growth in PBT and total lending is aligned with SBF’s
key strategic priority to onboard larger transactions
and to increase product penetration across their
client portfolio, whilst maintaining credit risk
appetite. The quality of SBF’s lending continues to be
good, with impairment as a percentage of drawn
funds remaining low at 0.78% (2023: 0.94%).
Jade reported a profit of £1.4m for the year (2023:
£1.3m). The total of the other remaining business
lines, including the impact of Group consolidation
adjustments, increased overall Group profit by £4.2m
(2023: decrease to profits of £22.3m).
During the year, the remaining participant in the
Connells management incentive scheme left the
scheme resulting in a release to the liability
previously held and an associated credit to the
income statement of £4.2m.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 45
Financial position
A summary Statement of Financial Position is set out
below:
Consolidated total assets have increased by 4.8% to
£39.0bn at 31 December 2024. This overall balance
sheet growth is predominantly due to our increased
trading, with good growth in both our mortgage and
savings books. Our financial position is analysed
below by our key balance sheet areas.
Liquidity
The Group continues to hold strong levels of liquid
assets to ensure it can meet its liabilities as they fall
due and to help mitigate the current economic
uncertainties. The Liquidity Coverage Ratio (LCR), a
measure designed to ensure that financial
institutions have sufficient high-quality assets
available to meet their liquidity needs for a 30-day
liquidity stress scenario, was 193% (2023: 173%).
The Group’s liquidity levels are closely managed by
senior management and have remained above
internal and regulatory limits throughout the year.
Liquid assets at 31 December 2024 were £6.7bn
(2023: £7.1bn). When measured as a percentage of
shares, deposits and borrowings, the liquidity ratio
remained strong at 19.1% (2023: 21.3%) providing
the Group flexibility in an unpredictable market.
At 31 December 2024, the Society held £5.8bn (2023:
£5.9bn) of High Quality Liquid Assets (HQLA) as
analysed below:
The Society also holds a portfolio of other liquid
assets, which are not categorised as HQLA, as
shown below:
*The tables above differ to the total amount of liquid
assets shown within the Group’s Statement of Financial
Position (2024: £6.7bn; 2023: £7.1bn) due to certain items
that are excluded from these tables, such as liquid assets
used as collateral and those used in repurchase (or ‘repo’)
transactions.
Liquidity 2024 (£m) 2023 (£m)
Balances with the
Bank of England
1,928.6 3,155.5
Gilts 885.5 369.4
Treasury bills 321.3 493.6
Fixed rate bonds 1,267.6 580.0
Floating rate notes - 169.6
Residential mortgage
backed securities
619.9 408.2
Covered bonds 770.1 758.6
Total 5,793.0 5,934.9
Group 2024 (£m) 2023 (£m)
Certificates of deposit - 97.9
Cash with other
Institutions
1.0 0.5
Total 1.0 98.4
Liabilities 2024 (£m) 2023 (£m)
Shares 28,268.5 25,949.8
Borrowings 6,786.0 7,316.9
Derivatives 225.1 452.2
Other liabilities 336.5 354.8
Subordinated
liabilities and
subscribed capital
731.8 726.9
Reserves 2,667.6 2,421.5
Non-controlling
Assets
(0.2) (0.2)
Total liabilities and
equities
39,015.3 37,221.9
Assets 2024 (£m) 2023 (£m)
Liquid assets 6,694.8 7,092.7
Loan and advances to
customers held at
amortised cost
30,601.1 28,161.4
Loans and advances
to customers held at
FVTPL
0.9 0.9
Equity release
portfolio
277.2 293.3
Derivatives 752.1 1,000.8
Fixed and other
assets
689.2 672.8
Total 39,015.3 37,221.9
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 46
The Group’s treasury investments are held to provide
liquidity and over 99% (2023: over 99%) of the
Group’s treasury investments, excluding exposures
to a central clearing house used to clear derivatives,
are rated A3 or better. The Group’s policy is that
investments in treasury assets are typically A3 or
better (with the exception of some unrated building
societies where separate credit analysis is
undertaken).
The Net Stable Funding Ratio (NSFR) is a longer-term
stable funding metric, which measures the stability
of our funding sources relative to the assets (e.g.
mortgage balances) we are required to fund. The
Group’s NSFR (2024: 140.3%; 2023: 137.1%) is well
in excess of the regulatory requirement of 100%,
confirming that the Group holds sufficient stable
funding to meet this requirement.
The Group regularly conducts an Internal Liquidity
Adequacy Assessment Process (ILAAP) in
accordance with the Prudential Regulation
Authority’s (PRA) liquidity guidelines and the Board
remains satisfied that the Group has sufficient liquid
assets at its disposal in order to meet its obligations
as they fall due.
Loans and advances to customers
The Group continues to grow its mortgage assets in
a controlled manner, lending within clearly defined
risk appetites through both the Home Financing
business and SIL. The Group achieved net mortgage
growth of 8.2% (2023: 12.1%) with mortgage
balances increasing in the year from £28.6bn at the
end of 2023 to £30.9bn. The Group has continued to
lend to a broad range of borrowers, within our credit
risk appetite, throughout the year. New lending,
delivered through both mortgage intermediaries and
our own distribution channels, amounted to £6.1bn
(2023: £6.7bn). Net mortgage lending totalled £2.3bn
(excluding impairment and fair value adjustments for
hedged risk) (2023: £3.1bn). Of the new lending in
the year, more than ever was in relation to first-time
buyers, which represented c.44% of all new lending.
The average residential loan-to-value (LTV) ratio
(calculated on a valuation-weighted basis) on new
lending has increased slightly to 65.3% (2023:
63.0%). We consider our new lending to remain
prudent and the mortgage book to be well diversified
by geographical location. As at 31 December 2024,
the average valuation-weighted LTV of the total
residential mortgage book (excluding equity release)
was 46.1% (2023: 44.5%).
Our well-managed spread of risk ensures that the
quality of the Group’s lending remains high, as such
we are well placed to deal with uncertainty ahead.
This is evidenced by the proportion of residential
mortgage accounts in arrears by three months or
more which remained low at 0.29% (2023: 0.23%)
excluding non-UK lending; this compares favourably
with the industry average of 0.91% (2023: 0.91%) of
UK mortgages in arrears by more than three months
(Source: UK Finance).
The Group’s commercial mortgage portfolio reduced
in the year by 15.5% to £114.3m. The average LTV of
this portfolio reduced from 42.5% to 42.3% and the
proportion of accounts in arrears by three months or
more in this portfolio was 1.69% (2023: 1.62%).
At 31 December 2024, the fair value of the Group’s
equity release portfolio was £277.2m (2023:
£293.3m). The decrease in fair value of equity
release mortgages is primarily due to movements in
external market rates which form the basis of the
rate at which the portfolio’s cash flows are
discounted to (see Note 18 for further details).
We aim to support our customers who find
themselves in financial difficulty and where
appropriate we will apply a policy of forbearance
which could include arrears capitalisation, a
reduction in the monthly payment, a payment
deferral, a conversion to interest only or a mortgage
term extension, based on the customer’s individual
circumstances and needs. Ensuring a fair outcome
for our customers is central to our strategy of
forbearance, further details of which can be found in
Note 43 to the Accounts. As a signatory to the
Mortgage Charter, which outlines the standards
lenders have agreed to uphold for customers
affected by the increase in mortgage rates and the
elevated cost of living, further demonstrates our
commitment to our customers and members.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 47
Retail funding
As a mutual building society we remain committed
to providing savers with competitive returns along
with offering excellent customer service, which is
reflected in the 8.9% increase in retail savings
balances during the year, as detailed on page 43.
In addition to our UK retail funding, the Group also
accepts deposits through SIL (our Channel Islands
based business). SIL’s funding base totalled £2.4bn
(2023: £2.4bn); these balances are included in
‘Amounts owed to other customers’ within the Group
Statement of Financial Position.
Wholesale funding
At 31 December 2024 the Society’s wholesale
funding ratio was 14.4% (2023: 16.8%), with £4.4bn
(2023: £4.9bn) of our funding coming from the
wholesale markets, as analysed below:
In June 2024, the Society issued a €500m 5-year
covered bond and in October the Society
successfully completed its sixth securitisation
transaction through Darrowby No. 6 plc, allowing the
Society to raise £500m of funding.
At 31 December 2024 the Society had £1.0bn
outstanding under the Bank of England’s ‘Term
Funding Scheme with additional incentives for SMEs’
(TFSME) (2023: £1.35bn of TFSME outstanding),
which is all due for repayment in October 2025.
The credit ratings of the Society are assigned by two
major credit rating agencies, Fitch and Moody’s. In
October 2024 Fitch affirmed the Society’s Long-Term
Issuer Default Rating (IDR) at ‘A-‘ with a Stable
Outlook, Short-term IDR at ‘F1’ and Viability Rating
(VR) at ‘a-‘. In July 2024 Fitch also affirmed the
Society’s mortgage covered bonds at ‘AAA’ with a
Stable Outlook. In July 2024 Moody’s affirmed the
Society’s Baseline Credit Assessment (BCA) at ‘A3’,
it’s ‘A2’ long-term deposit and senior debt ratings
with a Stable Outlook, and Short-term at ‘P-1’.
Moody’s also assigns ‘Aaa’ to the Society’s
Mortgage Covered Bonds. The ratings reflect the
continued financial strength of the Society, which
compares favourably to other large building
societies.
The Society’s current credit ratings, which have not
changed since 2021, are summarised below:
The Class A Notes of our rated securitisation
transaction (Darrowby No. 6 plc) is ‘Aaa’ rated by
both agencies.
Funding
The Group, through our Money business, continues
to manage the mix of retail and wholesale funding in
the best interests of members. Optimising the mix of
retail and wholesale funding is essential to our Group
achieving both its retail savings and lending growth
objectives. We maintain a diverse funding portfolio
to prevent over-reliance on one source and, taking
into consideration the term profile of our lending,
closely manage the term of our funding in order to
manage the risks of duration mis-match.
The Group remains primarily funded by retail
savings:
Notes
1. Excludes shares held by others and fair value
adjustments totalling £325.0m (2023: 271.2m) which
are classified as wholesale funding.
2. Wholesale funding balances exclude £2,417.7m (2023:
2,446.0m) of offshore funding in our Channel Islands
based business, SIL.
Group 2024 (£m) 2023 (£m)
Repo and other
secured agreements
1,019.2 1,472.0
Deposits 913.8 984.2
Certificates of
deposit
5.1 -
Covered bonds 1,934.9 2,251.5
Securitisation 491.6 186.0
Fair value
adjustments
3.7 (22.8)
Total 4,368.3 4,870.9
Group Fitch Moody’s
Covered bonds AAA Aaa
Senior Preferred A A2
Baseline Credit
Assessment (BCA)
N/A A3
Issuer Default Rating
(IDR)
A- N/A
Short Term F1 P-1
Senior Non-Preferred A- Baa1
Outlook Stable Stable
Last change of rating August
2021
July 2021
Group 2024 (£m) 2023 (£m)
Shares held by
individuals (note 1)
27,943.5 25,678.6
Wholesale funding
(note 2)
4,368.3 4,870.9
Total 32,311.8 30,549.5
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 48
Capital (unaudited)
Capital comprises principally the general reserve and
subscribed capital provided through Permanent
Interest-Bearing Shares (PIBS). Capital is ultimately
held for the protection of depositors and other
creditors by providing a buffer against unexpected
losses.
We monitor our capital at a prudential consolidation
group level (comprising the entire Group except
Connells Group, Jade Software Corporation Limited
and a small number of other entities whose activities
are not closely aligned with the core business) and at
a Society only level by applying the Capital
Requirements Directive V (CRD V) effective from
December 2020, and the UK Capital Requirements
Regulation (UK CRR), as implemented from January
2022.
The capital requirements under the prudential
consolidation group are higher than for the Society.
On the basis that the prudential consolidation group
represents the lowest capital adequacy and leverage
positions, and the same risk management
framework is applied to both, the analysis
throughout this Capital section has been disclosed
at a prudential consolidation group level only.
We have PRA permission to apply the internal
ratings-based (IRB) approach to certain credit risk
exposures. From 1 January 2022, we apply a
temporary model adjustment (TMA) to the Society’s
regulator-approved IRB model output. The Society
submitted an update to the incumbent regulator-
approved IRB model to the PRA in 2021 and a
revised version addressing the PRA feedback in
2024. During 2024, the TMA has been updated to
adjust IRB outputs to align with the IRB models that
were resubmitted to the PRA in January 2024. Until
the updated IRB models are approved by the PRA,
the TMA remains subject to change and may cause
further movements in the capital metrics. There have
not been, and we do not expect there to be, any
material changes to the risk profile or strategy of the
Society as a result of changes to the TMA.
Total regulatory capital has increased by £179.9m
from 31 December 2023 to £2,415.1m as at 31
December 2024 (2023: £2,235.2m). This is mainly
due to the retained profits accumulated during 2024.
Risk weighted exposure amounts (RWAs) have
reduced by £155.1m in the year to £8,277.4m (2023:
£8,432.5m - restated). The decrease is principally
driven by the updates made to the IRB models
described above, partially offset by strong residential
mortgage book growth in the year.
The Common Equity Tier 1 (CET1) ratio has
increased to 28.7%, up from the restated 26.0% as at
31 December 2023, driven by the increase in total
regulatory capital, and the reduction in RWAs. The
leverage ratio has reduced to 6.6% (2023: 6.7%)
mainly due to the growth of the balance sheet during
year driven by an increase in mortgage lending.
The following table shows the composition of the
prudential group’s regulatory capital as at 31
December 2024. IFRS 9
Financial Instruments
transitional arrangements are applied throughout.
*These comparative figures are restated following a review
of the interpretations and capital calculations in relation to
the risk exposure amount for operational risk. The impact
of the restatement is a decrease to CET1, Tier 1 and total
capital ratios of 0.3% as at 31 December 2023. There was
no change to the leverage ratio as at 31 December 2023.
Notes
1. The capital ratios are calculated as relevant capital
divided by RWAs. The leverage ratio is calculated as
Tier 1 capital divided by total exposure, i.e. total
assets per the prudential consolidation group, less
deposits with central banks and regulatory
adjustments.
2. The leverage ratio represents the UK regulatory
regime, which excludes deposits with central banks
from the leverage exposure measure.
Group 2024 (£m) 2023 (£m)
Capital resources
CET1 capital 2,375.1 2,195.2
Total Tier 1 Capital 2,375.1 2,195.2
Total Tier 2 capital 40.0 40.0
Total regulatory
capital
2,415.1 2,235.2
Risk weighted assets 8,277.4 8,432.5*
Capital and leverage ratios (note 1)
CET1 capital 28.7% 26.0%*
Tier 1 ratio 28.7% 26.0%*
Total capital ratio 29.2% 26.5%*
Leverage ratio (note 2) 6.6% 6.7%
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 49
Capital management
The Group is regulated by the PRA and is required to
manage its capital in accordance with the rules and
guidance issued by the PRA under CRD V, the UK
CRR and the PRA rulebook.
The Group completes an Internal Capital Adequacy
Assessment Process (ICAAP) at least annually to
assess current and projected capital requirements to
support the current risks in the business and future
risks arising from the Corporate Plan. The ICAAP
considers all of the Group’s material risks and
includes Board-approved stress scenarios which are
intended, as a minimum, to meet regulatory
requirements.
Minimum Requirement for Own Funds and Eligible
Liabilities (MREL)
MREL is a regulatory requirement set by the Bank of
England to ensure institutions can cover losses that
would need to be absorbed in the event of a
resolution scenario. The amount of MREL that
institutions need to have is linked to the resolution
strategy chosen for each firm.
The Bank of England’s preferred resolution strategy
for Skipton Building Society is a single point of entry
bail-in under Part 1 of the Banking Act 2009. From 1
January 2023, our MREL requirement is 2x (pillar 1
plus pillar 2A capital requirements) plus the
applicable capital requirement buffers issued by the
Bank of England. This amounts to 20.1% (2023:
20.1%) of RWAs plus capital buffers.
At 31 December 2024, total MREL resources,
including MREL eligible senior non-preferred debt,
were 37.6% of RWAs (2023: 34.8% - restated). The
increase in the year is mainly due to the retained
profits accumulated during the year, combined with
the decrease in RWAs described above. At 37.6%,
this exceeds the 2024 MREL requirement of 20.1%.
Pillar 1
The Group holds capital to meet Pillar 1
requirements for credit risk, operational risk, and
market risk. The IRB approach is applied to calculate
the capital for the majority of requirement for
residential mortgages in the Group, and for equity
and non-credit obligation exposures. The
standardised approach is applied to all other
exposures, operational risk, market risk and credit
valuation adjustments.
Pillar 2A
The PRA requires the Group to hold additional Pillar
2A capital for risks not covered under Pillar 1 such
as pension and interest rate risk. At 31 December
2024 this was £170.2m (2023: £172.6m - restated).
The Pillar 2A capital requirement for 31 December
2023 has been restated following a review of the
interpretations and capital calculations in relation to
the risk exposure amount for operational risk.
The combination of Pillar 1 and Pillar 2A
requirements form the Group’s Total Capital
Requirement (TCR).
Further information on the Society's financial
strength can be found in the Group’s Pillar 3
Disclosures, which are published on the Society’s
website
skipton.co.uk
.
Taxation
The Group tax charge for the year is £78.1m (2023:
£78.8m) with an effective tax rate of 24.6% (2023:
23.7%). For the Society, the tax charge for the year is
£56.7m (2023: £76.8m) with an effective rate of
23.1% (2023: 24.7%). In addition to UK corporation
tax payable on its profits, the Society’s taxable
profits above £100m are subject to a 3% banking
surcharge which increases the tax charge for 2024
by £3.3m for both the Group and Society (2023:
£9.1m). The Group’s effective tax rate is offset by
the impact of lower tax rates in other jurisdictions,
whilst the Society’s effective rate of tax is also
impacted by non-taxable dividend income of £36.0m
(2023: £27.0m).
A reconciliation of the effective tax rate to the
statutory tax rate in the UK is provided in Note 12.
More detailed tax disclosures are provided in Note
33 to the Accounts and in the Country by Country
Reporting section.
Further details of the Group’s taxation strategy can
be found at www.skipton.co.uk/about-
us/governance.
Taxes borne are a direct cost, which impact the
financial results of the Group - the table below shows
the total UK tax contribution borne in the year:
Group 2024 (£m) 2023 (£m)
Corporation tax 73.5 74.1
Taxes on property 18.9 16.1
Employment taxes 79.8 73.0
Irrecoverable VAT 22.5 19.7
Total 194.7 182.9
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 50
Pension funds
The Group manages three funded defined benefit
schemes as described in Note 34 to the Accounts.
Using the methodology set out in IAS 19
Employee
Benefits
, the aggregate valuation of the three
schemes at 31 December 2024 was a combined
deficit of £3.8m (2023: £26.2m deficit). The
decrease in the deficit in 2024 was largely due to a
lump sum payment of £23.0m to the Skipton (2015)
Scheme on 2 January 2024.
We continue to take steps to manage the Group’s
exposure to the schemes and all schemes are closed
to new members and to future accrual of benefit.
The actuarial valuation deficits, as described in Note
34 to the Accounts, are used to judge the level of
contributions that should be made and a schedule of
deficit contributions has been agreed between the
Trustees and the Group.
In addition to the lump sum payment above, the
Group also made two further payments to the
Skipton Building Society (2015) Group Pension
Scheme in January 2025 to facilitate a full Scheme
buy-in with Rothesay.
The first was a loan to the Scheme of £14.6m in
recognition of the fact the Scheme holds illiquid
assets of the same value. The loan will be repaid as
the illiquid assets currently held by the Scheme
mature. The second was a payment of £10.7m to top
up the Scheme’s assets to the buy-in policy’s value
of £101m.
Successfully entering in to a buy-in with Rothesay
removes much of the future volatility in the Scheme
and further de-risks the Society’s exposure to the
Scheme as the insurance policy will provide the
necessary money to pay members’ benefits.
This transaction will be reflected in the 2025
accounts of the Society; refer to Note 48 for further
details.
The pension Trustees will continue to monitor and
manage the pension schemes in a responsible
manner, working with the employer to share the aim
of ultimately eliminating the actuarial funding deficit.
The Group also operates defined contribution
schemes into which eligible employees are
automatically enrolled.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 51
The UK growth outlook remains uncertain, with the economy remaining subdued throughout much of 2024,
and economies across the globe still facing significant uncertainties and continued geopolitical tensions.
Despite inflation returning to more normal levels through 2024, and wage growth helping to soften cost-of-
living pressures, there remains significant strain on some household finances, with inflation remaining slightly
above its target and unemployment forecast to rise slowly through 2025.
The reduction in the Bank of England’s base rate in the second half of 2024, and likely further reductions,
together with changing customer behaviours, presents both challenges and opportunities across our
diversified Group. Following the UK General Election result, a level of uncertainty remains regarding the impact
of new fiscal policies, as set out in the new government’s first Budget.
Principal Risks and Uncertainties
The outlook for the Group remains positive, but the performance of the UK economy in the coming years may
impact our performance against the Group’s 5-year Corporate Plan. At this stage, other than the challenges
remaining in the economic environment, and uncertainty around government policy following the General
Election, the Directors do not consider that the principal risks and uncertainties affecting the Group have
changed materially since the publication of the 2023 Annual Report and Accounts and the 2024 interim
financial management report. However, these continue to evolve, and will continue to be managed throughout
2025 and beyond.
The Board promotes the need to maintain a forward-looking focus and run appropriate severe scenarios to
test the Group’s resilience to these and possibly other unforeseen risk events, and is confident that the Group
is well placed to react appropriately.
Emerging Risks and Uncertainties
The FCA’s Disclosure and Transparency Rules require that the Annual Report and Accounts must include a
description of the principal risks and uncertainties for the 2025 financial year.
The principal financial and non-financial risks faced by the Group, which are common to most financial
services firms in the UK, and how the Group seeks to mitigate them, can be found in the Risk Management
Report, with the most significant emerging risks described below, together with mitigating actions we are
taking to manage the risk:
Risk description Mitigation
Economic environment and geopolitical
A significant escalation in
ongoing or new conflicts, a
significant change in
government policy or
sudden economic impacts
to the housing market could
detrimentally impact growth
plans.
Macroeconomic and geopolitical risks continue to be closely monitored
across all Group businesses, as the near
-term outlook remains uncertain.
Risks associated with the housing market and future trajectory for UK inflation
and interest rates are closely managed as part of our strategic planning, to
ensure any potential consequences can be considered and acted on in a timely
manner.
Continued monitoring of both direct and potential secondary impact risks
associated with ongoing or new conflicts remains a key consideration.
The impact of changes to existing or new policies resulting from the change in
UK government will be closely monitored through 2025 and beyond.
Technology and innovation
Potential for losses or
operational disruptions
that can arise from the use,
ownership, operation,
influence, and adoption of
technology e.g.
cybersecurity, Artificial
Intelligence (AI), cloud,
third party risk
management.
The Group continues to strengthen our governance, processes and controls,
including robust cybersecurity measures, regular system maintenance, and
disaster recovery planning.
The Group has an ambitious change agenda and continues to invest in
innovation and the integration of third
-party software with internally built
platforms through our change management approach. Informed decision
making enables us to strike a balance between the opportunities of utilising
technology such as cloud, and managing any associated risks, to ensure our
technology and processes are secure and resilient by design.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 52
Risk description Mitigation
Regulatory environment
Potential for losses or
adverse outcomes arising
from failure to comply with
applicable laws, regulations,
and industry standards.
Well established processes are in place to enable compliance with existing
and new regulations across the Group.
The embedding of Consumer Duty principles will continue to minimise conduct
related risks and support good customer outcomes, and work is underway to
ensure we are well prepared for emerging regulatory expectations including
the Basel 3.1 reforms and the UK Corporate Governance Code. All Group
businesses maintain an open relationship with regulators.
Operational resilience
A major operational risk
event such as a cyber
-
attack or national
infrastructure failure could
disrupt our ability to
provide key services to
members and customers.
The Group has a robust approach to scenario planning to ensure effective
plans are in place to respond and recover from a material risk event.
As the Group increases reliance on outsourced service providers, we will
continue to enhance our ‘outsourcing and third
-party risk management’
processes and controls to ensure such providers
are capable of maintaining
their services and service standards to us, even in a stressed environment.
Market environment
Mortgage credit conditions
have the potential to be
more challenging in 2025.
Our diversified business model ensures the Group is well placed to respond to
a variety of market conditions and remains both financially and operationally
resilient.
Regular stress testing is performed to ensure the Group has considered severe
but plausible scenarios and maintains the ability to withstand any such
stresses.
Environmental, Social and Governance (ESG) and Climate risk
The risk associated with
increased supervisory
expectations and
regulatory requirements for
ESG and disclosure
requirements.
The Group is committed to embedding the management of ESG and climate
risk across its businesses. Our 2024 Group Sustainability Report details our
approach to managing these risks.
The Group will continue to review available data sources and enhance our
methodology and processes to improve the robustness of our ESG governance
and reporting, aligned with emerging developments and regulatory
requirements in 2025 and beyond.
Changing customer behaviours
The risk of an adverse
impact on profitability if
customers are more
actively seeking a better
rate through ease of
switching and increased
competition.
Enabling current and future members to interact with us through a channel
that suits their needs and delivers good outcomes remains a key focus.
The Group is responding to these risks by investing in digital infrastructure,
enhancing our customer engagement strategies, and adapting our product
offerings to meet evolving customer needs and behaviours.
Supporting more of our members to interact digitally and removing more paper
from our journeys supports our ambitions to become paperless.
Group reputational risk
The risk that a significant
event within a Skipton
Group business
detrimentally impacts the
Group or an individual
Group business, leading to
operational, financial and
reputational impacts.
2024 has seen the development of a more prominent Skipton Group brand, as
we look to develop opportunities for members, customers and colleagues by
harnessing the power of the Group.
We have strengthened our Group operating model and risk management
framework; this will continue through 2025 to ensure the right resources and
capabilities are in place to minimise any associated risks.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 53
Non-financial Information Statement
The Society, although not required to follow the Companies Act 2006, has sought to voluntarily comply with
elements of s414CB of the Act by including certain non-financial information within our Annual Report &
Accounts to provide our stakeholders with a fuller picture of our performance.
Information regarding the following matters can be found on the following pages:
Non-Financial information Further Detail
Business model Pages 13 and 14
Key performance indicators Pages 16 to 27, and page 39
Key risks Pages 51 to 52, and pages 95 to 104
Climate matters Pages 32 to 38
Environmental matters Pages 32 to 38
Colleagues Pages 64
Societal matters Pages 32 to 38
Respect for human rights Pages 29 to 31, page 33 and 64
Anti-corruption and anti-bribery Page 33
This Strategic Report was approved by the Board of Directors on 25 February 2025 and signed on behalf of
the Board by:
Paul Chambers
Group Chief Financial Officer
Performance & Strategy Governance Financial Statements
Other Information
P Chambers
Skipton Group Annual Report & Accounts 2024
56
“My role is to lead the board’s focus on the
development and delivery of the corporate plan. I
also remain focused on making membership
matter. As members’ behaviour in dealing with
their financial affairs continues to evolve, I’m
working with the team to ensure we serve the
needs of our members today and in the future. This
includes championing change to deliver increased
support for our members – which can be seen in
the initiatives we’ve launched already and those we
plan to introduce. I’m proud to lead a board that’s
tireless in its efforts to support our members and
colleagues and have a positive impact on their
lives.”
“I am fully focused on creating a strong franchise
by careful stewardship of the Group. This will
ensure that it matters more to our members and
customers. The Skipton Group is an incredible set
of businesses. It’s well placed to address
challenges such as access to your first home,
financial education and quality impartial advice, as
well as improving access to the housing market
and energy efficiency in UK homes. We’ve made a
start, but there’s so much more we need to do to
support people in these crucial areas. My job is to
make our organisation even more relevant for both
existing and new members as they consider their
long-term financial needs and aspirations.”
• Chair of the Board
• Chair of the Board Nominations Committee
• Chair of the Non-Executive Remuneration
Committee
• Group Chief Executive
• Chair of the Group Executive Committee
• Member of the Non-Executive Remuneration
Committee
Appointed to the Board: 2022 Appointed to the Board: 2022
Gwyn brings wide-ranging executive experience in
retail, thanks to her directorships at Asda and
Sainsbury’s. She also has significant financial
services experience, having previously held non-
executive director positions with Principality
Building Society, Sainsbury's Bank plc and the
Financial Ombudsman Service. She is currently a
non-executive director at Metro AG and Ingleby
Farms and Forests.
Stuart has over 20 years of business leadership
experience across financial services. He brings a
unique blend of technical and customer facing
skills and experience which will support delivering
value to our members and the modernisation of
the Group. Stuart is driven by the purpose of
serving members' interests now and preparing the
business so we can serve those interests in
future. He’s previously held senior executive roles
at NatWest and HSBC and was CEO of Wealth
and Personal Banking at HSBC UK.
Performance & Strategy Governance Financial Statements
Other Information
Stuart Haire
Executive Director
Gwyn Burr
Non-Executive Director
Skipton Group Annual Report & Accounts 2024
57
• Chief Executive Officer - Money
• Member of the Group Executive Committee
• Member of the Non-Executive Remuneration
Committee
• Chair of the Board Audit Committee
• Member of the Board Change Committee
• Member of the Board Nominations Committee
• Member of the Board Risk Committee
Appointed to board: 2016 Appointed to board: 2022
Andrew has extensive experience in financial
services having previously worked in Lloyds
Banking Group, Halifax and Bank of Scotland. He
has served in a variety of senior roles across
mortgages, savings and financial advice. He is the
Chief Executive Officer for our ‘Money’ business,
which helps members make the most of their
savings and investments.
Andrew will retire from Skipton Group in June 2025.
Iain is a Fellow of the Institute of Chartered
Accountants in England and Wales with over 35
years of experience working in the financial
sector. He was a partner at KPMG for over 24
years, working with banks and other major
financial services firms in both audit and advisory
roles, including three years leading KPMG's
banking audit practice. He is a non-executive
director of Rathbones Group plc (a listed wealth
manager), where he is Chair of the Audit
Committee, and a non-executive director of
Tradition London Group, which comprises the UK
subsidiaries of Compagnie Financiere Tradition
SA (an interdealer broker), where he is Chair of the
Audit and Risk Committees.
“My priority has been to define a clear member
focused strategy for the new ‘Money’ business, as
well as mobilising our two-year project investing in
technology to build a seamless digital experience
for members. My focus is to broaden the access
members have to advice on their money, along with
high quality products and services. I’m most
passionate about helping members achieve their
financial goals, whether that’s saving for their first
home or planning for retirement. I want our
members to be able to speak to our experts in our
branches, over the phone or through our digital
teams, so that they can be confident their money is
working hard for them.”
“I was attracted to an organisation that takes a
long-term view and focuses on delivering value to
its members, through supporting them with their
mortgages to helping them plan and save for their
future. In what was a year of significant change for
the Society, my main priority was to ensure a
smooth transition for our new Group Chief
Financial Officer. This year, I’ll be focusing on our
assessment of our controls over financial reporting
to meet the requirements of the updated Corporate
Governance Code and our realisation of the value
for members from the considerable levels of
investment and change within the Society.”
Performance & Strategy Governance Financial Statements
Other Information
Andrew Bottomley
Executive Director
Iain Cummings
Non-Executive Director
Skipton Group Annual Report & Accounts 2024
58
“My focus is on fairness and always considering
situations from a member viewpoint. I want to
make sure the change initiatives we’re planning
make the lives of our members and customers
better and easier. Having always lived in Yorkshire,
I’m focused on value for money! Making sure we
have a positive impact on our members is what
drives me personally. I am hugely motivated by the
Society’s colleagues' desire to serve all members’
best interests and by our strong purpose.”
“I’m a huge fan of the Society’s mutual business
model. I’m as excited as I’ve ever been about the
opportunities it brings – especially for our
membership, which is my priority. I’m delighted the
Society has now introduced our member-only
benefits. I want to make sure we have a strong and
resilient business – with a clear plan that continues
to develop the Society for the benefit of our
members.”
• Chair of the Board Change Committee
• Member of the Board Nominations Committee
• Member of the Board Remuneration Committee
• Member of the Board Risk Committee
• Deputy Chair of the Board
• Senior Independent Director
• Member of the Board Audit Committee
• Member of the Board Nominations Committee
• Member of the Board Remuneration Committee
• Chair and independent non-executive director of
Connells
Appointed to board: 2018 Appointed to board: 2016
Heather brings her strong business operations,
technology, strategy and change background which
is vital as the Society focuses on improving our
customer journeys through all channels and on our
use of data to support better decision making. She
has 25 years’ experience in senior executive roles at
Lloyds plc, Capital One, Boots the Chemist, Asda
and Burton Group plc. She’s a non-executive
director for Ikano Bank Europe, Rothesay and The
Veterinary Defence Society as well as a trustee
director of Yorkshire Cancer Research.
Mark’s experience at senior leadership level in
financial advice and investment management
enables him to provide relevant insight which is
particularly important as the Society develops its
financial advice business. He has more than 40
years’ experience in commercial and financial
services. His previous roles include CEO of St
James’s Place plc, CEO of Virgin Direct and
Director of Henderson Investors plc. He is a non-
executive director of Coutts & Co.
Mark will retire from Skipton Group Board in April
2025, but will remain on Connells board as Chair.
Performance & Strategy Governance Financial Statements
Other Information
Heather Jackson
Non-Executive Director
Mark Lund
Non-Executive Director
Skipton Group Annual Report & Accounts 2024
59
“As our Consumer Duty Board Champion, I’ve
continued to spend time with our colleagues to
ensure we’re delivering good customer outcomes
and meeting our regulatory requirements. This year
I’m particularly keen to understand the key
frustrations for our members across all channels
and to support the organisation in delivery of our
business plan. I’ve always been driven by making a
difference for both customers and colleagues. We
are very fortunate to have colleagues who are
passionate about doing the right thing for our
members.”
“My priority has always been on making sure the
interests of our members are safeguarded.
Whatever happens in the world, it’s important that
we service their needs effectively. I’m a big
advocate of Skipton’s core principle in putting
members first. And it’s been great to see our
member-driven values and purpose grow even
further over the years. As well as the Society, I also
serve on the boards of other financial institutions
in Europe. This keeps me informed on current
issues, so I can contribute to the Society by
weighing up different approaches to common
challenges.”
• Chair of the Board Remuneration Committee
• Member of the Board Nominations Committee
• Chair of the Board Risk Committee
• Member of the Board Audit Committee
• Member of the Board Nominations Committee
Appointed to board: 2023 Appointed to board: 2017
Steven has over 35 years’ experience in retail, FMCG
and financial services, in the UK and abroad. Over
the past 20 years he’s held senior executive roles in
HR, retail operations and change management,
always with a strong focus on the colleague and
customer experience. His last role was with
Sainsbury’s Bank, where he also sat on the
Sainsbury’s Group HR Executive. Steven is a non-
executive director of Peter Vardy, Scottish Ballet
and Philip Kingsley. He brings a wealth of
experience in strategy, change leadership and
building strong customer propositions.
Denis has worked in senior risk roles with
Citibank, Deutsche Bank and GE Capital. He
brings a wide knowledge of risk management,
regulation and financial services enabling him to
Chair the Board Risk Committee and provide
support, advice and challenge to the executive
team on risk management issues. Denis is a non-
executive director of Germany's Aareal Bank
where he sits on the Risk Committee and is Chair
of the Audit Committee. He’s also a non-executive
director for Moneta Bank in the Czech Republic
where he sits on both the Risk and Audit
Committees and non-executive director and Chair
of the Risk and Audit Committee for Auxmoney
Holding in Ireland.
Performance & Strategy Governance Financial Statements
Other Information
Steven Davis
Non-Executive Director
Denis Hall
Non-Executive Director
Steven Davis
Non-Executive Director
Skipton Group Annual Report & Accounts 2024
60
“I want all members to feel proud they’re part of the
Society. And over the past year, my priority has
been on making sure we deliver even more value for
our members. I joined the Board because of the
Society’s strong mutual values and clear purpose.
These attributes have created a financially strong,
member-focused organisation.”
“My priority in 2025 is to continue to understand
the drivers of profitability across our Group. We
need to ensure we optimise profit levels in an
environment of increased downward pressure on
interest margins, in our lending and deposits
businesses, and continued inflationary pressures
on our expenses. This will support us in our
objective of making membership mean more,
whilst continuing to fund the transformation of our
products and services across our Group.”
• Member of the Board Audit Committee
• Member of the Board Nominations Committee
• Member of the Board Risk Committee
• He is also a non-executive director of Connells
and Chair of Connells’ Audit and Risk Committee
• Group Chief Financial Officer
• Member of the Group Executive Committee
• Member of the Non-Executive Remuneration
Committee
Appointed to board: 2021 Appointed to board: 2024
Philip has over 40 years’ experience in international
financial services, spending nearly 20 years as a
CFO, including of a FTSE 100 company, followed by
consulting partner roles in the UK and South East
Asia, building his commercial, strategic and
regulatory expertise. He has experience of chairing
audit, risk and remuneration committees for a
number of companies, including Bank of Ireland
(UK) plc and Wesleyan Assurance Society. He is
also a trustee of homelessness charity St Mungo’s
and a Governor of North Herts College.
Phillip will retire from Skipton Group Board in April
2025.
Paul brings over 25 years’ financial services
experience, across international banking, wealth
management and management consulting. He
joined the board from Standard Chartered Group,
where he held a number of senior leadership
roles, the most recent being Group Financial
Controller. Paul has an extensive track record of
leading diverse teams through periods of change,
from market entry to market exit. This includes
launching new products and services, reporting
and control process re-design, and core system
change.
Performance & Strategy Governance Financial Statements
Other Information
Philip Moore
Non-Executive Director
Philip Moore
Non-Executive Director
Paul Chambers
Executive Director
Paul Chambers
Executive Director
Skipton Group Annual Report & Accounts 2024
61
“Skipton’s mission of helping people into homes,
saving for the future, and enjoying long-term
financial security, resonates deeply with my own
values. I firmly believe that financial services have
the potential to create meaningful and positive
changes in people’s lives. As a mutual organisation
owned by its members, Skipton’s focus on giving
back to the community and prioritising its members’
needs is something I am passionate about. I look
forward to making a real difference in people’s lives
through integrity, responsibility, and a commitment
to their long-term well-being.”
Appointed to board: 2024
Hasintha brings 21 years of experience in financial
services, working at Barclays Bank and HSBC Bank
plc in Europe, India and the UK. In that time, she has
led large-scale initiatives aimed at driving growth,
including business, risk, digital, and culture
transformation programs. Hasintha is an alumna of
Harvard Business School and is a member of the
Chartered Institute of Management Accountants
(CIMA) - UK. She’s a coach and mentor, dedicated
to empowering future leaders.
Board Changes throughout 2024
During 2024 we continued to strengthen our Board
and conducted a full review of corporate governance
arrangements across our Group, in order to ensure
that the boards of our key subsidiaries operate with
an appropriate level of independence and flexibility.
Bobby Ndawula and Sarah Whitney stepped down
from Skipton Group Board in 2024.
Performance & Strategy Governance Financial Statements
Other Information
• Member of the Board Nominations Committee
Hasintha Gunawickrema
Non-Executive Director
Skipton Group Annual Report & Accounts 2024 63
Dear Member,
The Directors have pleasure in presenting the
Group's Annual Report & Accounts for the year
ended 31 December 2024.
The financial information included in this Directors’
Report is taken from the statutory Accounts on
pages 142 to 293 prepared in accordance with UK-
adopted International Accounting Standards in
accordance with the requirements of the Building
Societies Act 1986 and with those parts of the
Building Societies (Accounts and Related
Provisions) Regulations 1998 that are applicable.
Further unaudited information which allows
comparison between 2024 and 2023 is set out in
the Strategic Report.
Gwyn Burr,
Group Chair
Business objectives
The business objectives of the Group are set out in
‘Our Group Business Model’ and ‘Focusing on
Ensuring Long-term Success’ sections of the
Strategic Report.
Business review and future developments
The Chair’s Statement, the Group Chief Executive’s
Report and the Strategic Report set out the
performance of the business and its future
objectives.
Profits and capital
Group profit before tax (PBT) was £318.6m (2023:
£333.4m). Total profit after tax (attributable to the
Group) transferred to the general reserve was
£240.5m (2023: £254.6m).
Total Group reserves at 31 December 2024
(excluding non-controlling interests) were £2,667.6m
(2023: £2,421.5m) including the fair value reserve of
£(10.6)m (2023: £(9.5)m), the cash flow hedging
reserve of £16.6m (2023: £4.9m), the cost of
hedging reserve of £(1.4)m (2023: £(0.5)m), and the
translation reserve of £3.2m (2023: £4.6m).
Gross capital at 31 December 2024 was £3,399.2m
(2023: £3,148.2m) including £690.2m (2023:
£685.3m) of subordinated liabilities and £41.6m
(2023: £41.6m) of subscribed capital. The ratio of
gross capital as a percentage of shares, deposits
and borrowings at 31 December 2024 was 9.70%
(2023: 9.46%) and the free capital ratio was 8.31%
(2023: 7.98%). The Annual Business Statement gives
an explanation of these ratios.
Mortgage arrears
Group mortgage balances at 31 December 2024
included 80 cases (2023: 57) either in possession or
where payments were 12 months or more in arrears.
The capital balances of these loans were £14.1m
(2023: £8.0m - restated). The total amount of arrears
on these loans was £1.3m (2023: £0.7m).
Charitable and political donations
In the year, the Group made charitable donations of
£3.3m in relation to our 2023 commitment to
donating 1% of pre-tax Group profits. A further £1.8m
was paid over, as pledged at 31 December 2023 to
fulfil our commitment on year end 2022’s results,
taking the total donated in relation to 2022 PBT to
£2.9m. Our performance this year means we will
donate £3.1m (being 1% of pre-tax Group profits for
2024), which will be paid in 2025.
No contributions were made for political purposes
(2023: £nil).
Creditor payment policy
The Group’s policy concerning the payment of
suppliers is to negotiate and agree terms and
conditions with all suppliers and upon complete
provision of goods and services, unless there is an
express provision for stage payments, undertake to
pay suppliers within the agreed payment period. The
number of trade payable days as at 31 December
2024 for the Group was 11 days (2023: 11 days).
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 64
Principal risks and uncertainties
The principal risks and uncertainties are set out in
the ‘Principal risks and uncertainties’ section of the
Risk Management Report and in Notes 41 to 43 to
the Accounts.
Financial risk management objectives and policies
Details of the key risks to which the Group is
exposed in relation to its financial instruments, and
how these risks are managed, are set out in the
‘Principal risks and uncertainties’ section of the Risk
Management Report and in Notes 41 to 43 of the
Notes to the Accounts.
Colleagues
The Group remains committed to its policy of
treating all colleagues and job applicants fairly,
ensuring equal opportunities. Our policy is that no
colleague, or potential colleague, is treated less
favourably on any grounds including age, race,
colour, religion, nationality, ethnic origin, gender,
marital status or sexual orientation. We also give all
applications from disabled people full consideration
in relation to the vacancy concerned and their own
aptitudes and abilities. In the event of an existing
colleague becoming disabled, we make every effort
to maintain their present position or to employ them
in alternative suitable work.
We also aim to provide high quality relevant training
and development opportunities to all colleagues,
which enables them to achieve their full potential
and helps the Group meet its corporate objectives.
The Board is briefed regularly on key colleague
matters as they arise. There is a comprehensive
internal communications structure to cascade
relevant business information to colleagues
throughout the Society in an appropriate and timely
way. The Group’s other businesses have similar
arrangements in place to ensure effective
communication of relevant matters.
The Society recognises an independent trade union
(Aegis) with which management meets regularly to
consult and negotiate on a wide variety of matters
and to which colleagues may make their views
known on issues affecting their interests.
Property, plant and equipment
The Directors consider that the overall market value
of the freehold and leasehold properties occupied by
the Group, excluding the principal office of the
Society, is in excess of their corresponding book
value that is included within property, plant and
equipment (per Note 21 to the Accounts). In arriving
at this view, the Directors have taken account of the
value-in-use, together with internal and external
valuations of the Group’s property portfolio.
It is difficult to ascertain a reliable market value for
the principal office of the Society, which is a special
purpose facility, however the Board considers that its
value in use to the Group is greater than its book
value.
Investment property
The Directors have considered the overall market
value of investment properties. In arriving at a view,
the Directors review internal valuations, and obtain
external market valuations for investment properties,
at least every three years. The Directors consider
that the overall market value of the investment
properties held are in excess of their corresponding
book values that are included within investment
properties (per Note 23 to the Accounts).
Directors’ responsibilities in respect of the
preparation of the Annual Report, Annual Business
Statement, Directors’ Report and Annual Accounts
This statement, which should be read in conjunction
with the Independent Auditor’s Report, is made by
the Directors to explain their responsibilities in
relation to the preparation of the Annual Report &
Accounts.
The Directors are responsible for preparing the
Annual Report, Annual Business Statement,
Directors’ Report and the Annual Accounts in
accordance with applicable laws and regulations.
The Building Societies Act 1986 requires the
Directors to prepare Group and Society Annual
Accounts for each financial year. Under that law they
are required to prepare the Group Annual Accounts
in accordance with UK-adopted international
accounting standards in conformity with the
requirements of the Building Societies Act 1986 and
have elected to prepare the Society Annual Accounts
on the same basis.
The Group and Society Annual Accounts are required
by law and UK-adopted International Accounting
Standards, in accordance with the requirements of
the Building Societies Act 1986 and with those parts
of the Building Societies (Accounts and Related
Provisions) Regulations 1998 that are applicable, to
present fairly the financial position and the
performance of the Group and the Society. The
Building Societies Act 1986 provides in relation to
such annual accounts that references in the relevant
part of that Act to annual accounts giving a true and
fair view are references to their achieving a fair
presentation.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 65
Under the Financial Conduct Authority’s Disclosure
Guidance and Transparency Rules, group financial
statements are required to be prepared in
accordance with UK-adopted international
accounting standards.
In preparing each of the Group and Society Annual
Accounts, the Directors are required to:
• select suitable accounting policies in accordance
with IAS 8 Accounting Polices, Changes in
Accounting Estimates and Errors and apply them
consistently;
• present information, including accounting
policies, in a manner that provides relevant,
reliable, comparable and understandable
information;
• make judgements and accounting estimates that
are reasonable and prudent;
• state whether they have been prepared in
accordance with UK-adopted International
Accounting Standards in accordance with the
requirements of the Building Societies Act 1986
and with those parts of the Building Societies
(Accounts and Related Provisions) Regulations
1998 that are applicable, subject to any material
departures disclosed and explained in the
financial statements;
• assess the Group and Society’s ability to continue
as a going concern, disclosing, as applicable,
matters related to going concern; and
• use the going concern basis of accounting unless
they either intend to liquidate the Group or the
Society or to cease operations, or have no
realistic alternative but to do so.
In addition to the Annual Accounts, the Act requires
the Directors to prepare, for each financial year, an
Annual Business Statement and a Directors’ Report,
each containing prescribed information relating to
the business of the Group.
The Directors are also required by the Disclosure and
Transparency Rules of the Financial Conduct
Authority to include a management report containing
a fair review of the business, which is set out in the
Strategic Report, and a description of the principal
risks and uncertainties facing the Group which is set
out in the ‘Principal risks and uncertainties’ section
of the Risk Management Report.
The Directors have decided to prepare voluntarily a
report on the relevant aspects of corporate
governance as if the Society were required to comply
with the Listing Rules and the Disclosure and
Transparency Rules of the Financial Conduct
Authority in relation to those applicable matters. This
is set out in the Corporate Governance Report.
A copy of these Annual Report & Accounts is placed
on the Society’s website. Information in respect of
the Capital Requirements (Country-by-Country
Reporting) Regulations 2014 is included as an annex
to these Annual Accounts.
Directors’ responsibilities for accounting records
and internal controls
The Directors are responsible for ensuring that the
Group:
• keeps proper accounting records that disclose
with reasonable accuracy at any time the financial
position of the Group and Society, in accordance
with the Act; and
• takes reasonable care to establish, maintain,
document and review such systems and controls
as are appropriate to its business in accordance
with the rules made by the Financial Conduct
Authority and Prudential Regulation Authority
under the Financial Services and Markets Act
2000.
The Directors are responsible for such internal
control as they determine is necessary to enable the
preparation of annual accounts that are free from
material misstatement, whether due to fraud or error,
and have general responsibility for taking such steps
as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud
and other irregularities.
The Directors are responsible for the maintenance
and integrity of the corporate and financial
information included on the Society’s website.
Legislation in the UK governing the preparation and
dissemination of annual accounts may differ from
legislation in other jurisdictions.
Directors’ responsibilities in respect of going
concern
The Group’s business activities together with its
financial position, capital resources and the factors
likely to affect its future development and
performance, including the impact of climate risks
are set out in the Strategic Report and the ‘Principal
risks and uncertainties’ section of the Risk
Management Report. In addition, Notes 41 to 43 of
the Annual Accounts include the Group’s objectives,
policies and processes for managing its liquidity risk,
details of financial instruments and hedging
activities, and its exposure to credit risk, liquidity risk
and market risk.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 66
In common with many financial institutions, the
Group meets its day-to-day liquidity requirements
through managing both its retail and wholesale
funding sources, and is required to maintain a
sufficient buffer over regulatory capital requirements
in order to continue to be authorised to carry on its
business. The Group’s forecasts and objectives,
which take into account potential changes in trading
performance and funding retention, indicate that the
Group expects to be able to operate at adequate
levels of both liquidity and capital for the next 12-
month period.
Consequently, after reviewing the Group’s forecasts
and the risks it faces, the Directors are satisfied that
there are no material uncertainties that may cast
significant doubt about the Group’s ability to
continue as a going concern and have, therefore,
continued to adopt the going concern basis in
preparing these Annual Accounts, as explained in
Note 1b) of Notes to the Accounts.
Directors’ statement of longer-term viability
In accordance with the UK Corporate Governance
Code, the Directors have assessed the prospects and
the ongoing viability of the Group over a longer
period than the 12-month period required by the
going concern basis of accounting.
The Directors’ assessment of the medium-term
prospects of the Group is based on the Group’s
corporate plans, which project the Group’s
performance, profitability, capital, liquidity and
funding position over a five-year period. The
assessment included a review of the Group’s current
position relative to the market and a review of the
Group’s strategic priorities over the medium-term
including management actions to achieve these
strategic goals.
The assessment also included a robust review of the
Group’s principal risks and uncertainties (outlined in
the ‘Principal risks and uncertainties’ section of the
Risk Management Report), which were taken into
account to ensure that the possible likelihood or
impact of these risks materialising would not
materially impact the prospects of the Group and to
ensure that the necessary control framework was in
place to mitigate the impact of these risks on the
future prospects of the business. Specifically, the
Directors took account of those risks that could
result in events or circumstances that might threaten
the Group’s business model, future performance,
solvency or liquidity and reputation, including the
social, economic, political and regulatory
environments and climate change.
The Directors concluded that the medium-term
prospects of the Group are satisfactory and that the
financial strength of the business remains healthy
throughout the period of assessment.
The Directors have assessed the viability of the
Group with the period of assessment being a five-
year period, to the end of 2029. Having considered
various options, the Directors determined that a five-
year period is an appropriate period for the purposes
of the Group’s viability assessment. This period
reflects the Group’s five-year corporate planning
horizon over which the prospects of the Group and
the principal risks threatening these prospects are
assessed as outlined above, and also the period over
which associated stress testing is performed.
In arriving at their conclusion on the longer-term
viability of the Group, the Directors considered the
following:
• The Group’s prospects over the five-year period
as outlined above.
• Stress testing carried out on the 2025 – 2029
business plans through the Group’s Internal
Capital Adequacy Assessment Process and
Internal Liquidity Adequacy Assessment Process.
The key economic stress test modelled reflected
sticky inflation, above the 2% target initially,
before falling significantly leading to deflation.
The Bank of England proceeding with caution,
maintaining Base Rate until the end of 2025,
before gradually reducing. UK real GDP contracts
by 5.4%, while house prices fall for 11 straight
quarters, with a decline of 32%. Furthermore, the
government 10-year bond yield trends upward and
the stock market plunges; with income tax rises
significantly reducing disposable income. A
further scenario, relatively aligned to the key
assumptions, was also modelled, whereby Base
Rate fell quickly, with inflation also falling, though
not turning deflationary; and GDP flexed to align
to this. The Directors concluded that the impact
of these severe economic environments would
not threaten the longer-term viability of the Group.
• Reverse stress testing carried out by the Group,
which considers scenarios specific to the Group,
including operational issues and external threats,
that could cause the Group to fail. The Directors
have concluded that any such scenarios are
unlikely to materialise.
• The potential impact of climate-related financial
risks across a range of forecast scenarios. This
includes consideration of the potential impact of
two scenarios where there is a disorderly
transition to a low carbon economy by 2050 and
the impact of a scenario in which no such
transition occurs.
• The potential impact of emerging regulation,
where there is sufficient information regarding the
future regulation.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 67
• The principal risks facing the Group and the
control framework in place to manage and
mitigate these risks (as outlined in the Risk
Management Report), including an assessment of
the likelihood and impact of these risks on the
Group. This includes specific consideration of the
growth outlook for the UK remaining subdued,
with a level of uncertainty remaining regarding the
impact of new fiscal policies, whilst economies
across the globe still face significant
uncertainties and continued geopolitical tensions.
Despite inflation returning to more normal levels,
and wage growth helping to soften cost-of-living
pressures, there will also remain significant strain
on some household finances.
• A number of severe but plausible scenarios,
arising from the principal risks, which are remote,
but if they arose could threaten the longer-term
viability of the Group.
There are inherent limitations in preparing long-term
financial plans with regard to a number of factors
including, but not limited to, social, economic,
political, regulatory and climate factors. The
Directors consider that the outer years of the
financial planning period are more difficult to predict
and therefore these years have a greater degree of
uncertainty. For example, the external environment
remains uncertain and although inflationary
pressures are easing and the peak in bank base rate
appears to have been reached, we expect
competitive pressures to remain in the mortgage and
savings markets. These impacts may have an effect
on the performance of the Group within the Group’s
financial planning period; the extent of the impact is
currently unknown.
However, based on the results of this assessment,
the Directors concluded that they have a reasonable
expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over
the next five years.
Directors
The Directors of the Society at 31 December 2024,
along with their roles and membership of board
committees, are set out in the Corporate Governance
Report. During the year, the composition of the Board
was refreshed to ensure it continues to have an
effective balance of skills, knowledge, experience
and diversity to deliver on Skipton’s strategic
priorities. Details of changes to the executive and
non-executive directors of the Society in the year are
set out in the ‘Board changes’ section of the Chair’s
Statement.
Details of Directors’ service contracts or letters of
appointment are disclosed in the Corporate
Governance Report. No Director of the Society had
any interest in the shares of any Group undertaking
as at 31 December 2024.
In accordance with the UK Corporate Governance
Code, all executive and non-executive directors offer
themselves for election or re-election by the
members at the 2025 AGM.
Auditor
In accordance with Section 77 of the Building
Societies Act 1986, a resolution for the re-
appointment of Ernst & Young LLP (EY) will be put to
the forthcoming AGM of the Society.
The Directors who held office at the date of approval
of this Directors’ Report confirm that, so far as they
are each aware, there is no relevant audit
information of which the Society’s auditor is
unaware, and each Director has taken all the steps
that they ought to have taken as a Director to make
themselves aware of any relevant audit information
and to establish that the Society’s auditor is aware of
that information.
Signed on behalf of the Board:
G Burr
Group Chair
Responsibility statement of the Directors in respect
of the Annual Report & Accounts
The Directors who held office at the date of
approval of this Directors’ Report confirm that, to
the best of their knowledge:
• The Annual Accounts, prepared in accordance
with UK-adopted International Accounting
Standards in accordance with the requirements
of the Building Societies Act 1986 and with those
parts of the Building Societies (Accounts and
Related Provisions) Regulations 1998 that are
applicable, give a true and fair view of the assets,
liabilities, financial position and profit of the
Group and Society; and
• The Strategic Report includes a fair review of the
development and performance of the business
and the position of the Group and Society,
together with a description of the principal risks
and uncertainties that they face.
We consider the Annual Report & Accounts, taken
as a whole, are fair, balanced and understandable
and provide the information necessary for members
to assess the Group’s and Society’s position and
performance, business model and strategy.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 69
Dear Member,
On behalf of the Board of directors, I am pleased to
present the Group’s Corporate Governance Report,
which details how the Group’s governance
framework operated in 2024.
As Chair of the Skipton Group, I understand the
importance of good governance in being
accountable to members of the Society. Good
governance is at the heart of a well-run business
and I am committed to ensuring we meet best
practice standards.
Gwyn Burr,
Group Chair
Our approach is based on the principles and
provisions of the UK Corporate Governance Code
(the Code) published by the Financial Reporting
Council (FRC), which applies to listed companies.
There is a regulatory requirement for building
societies to have regard for the Code, and as it
represents best practice within the industry, the
Board is committed to adhering to it in so far as it
applies to building societies, and has readily
embraced its provisions. This report benchmarks the
Society against the present version of the Code,
which is applicable to listed entities with accounting
periods commencing on or after 1 January 2019. A
copy of the Code is available at frc.org.uk.
The Code’s expectation is one of ‘Comply or Explain’.
The philosophy of the Society’s board of directors
(the Board) is to comply with the Code and the
guidance on it issued by the FRC and the Building
Societies Association. As the Code was not designed
for mutual organisations, it inevitably contains
sections with which the Society cannot comply. The
areas of non-compliance during the year were:
• Provision 3, which requires the Chair to discuss
governance matters with major shareholders and
relay their views to the Board as a whole (as a
mutual organisation, owned by its members, with
each voting member having one vote, there are no
major shareholders and therefore this specific
requirement is not relevant to the Society);
• Provision 36, which requires remuneration
schemes to promote long-term shareholdings by
executive directors (not possible for the Society
due to its mutual status); and
• Provision 38, which expects the pension
contribution rates for directors to be aligned to
those of the workforce (whilst all new
appointments to executive roles will align to this
requirement, there is one historical arrangement
in place which does not).
During 2024, other than the points listed above, the
Board believes that the Society complied with all
other aspects of the Code.
On 22 January 2024, a revised 2024 code was
published which applies to listed entities with
accounting periods commencing on or after 1
January 2025. The principal changes are those
around internal controls, in particular, Principle O and
a new Provision 29, effective from 1 January 2026,
which asks boards to make a declaration in relation
to the effectiveness of their material internal
controls. The Society is currently working to evaluate
how this is incorporated in future reporting. Other
changes include a requirement for boards to
examine how culture is monitored and how the
desired culture has been embedded; and ensuring
that directors’ remuneration includes malus and
clawback provisions. Culture is covered in the People
section of this report and our Directors’
Remuneration Report includes details of malus and
clawback provisions applicable to directors. We
remain committed to complying with the provisions
in the revised Code when they come into force.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 70
Governance Framework
The Group comprises Skipton Building Society (the
Society), which is regulated by the Financial Conduct
Authority (FCA) and the Prudential Regulation
Authority (PRA), and its direct and indirect holdings
in a number of legal entities, some of which are also
regulated by the FCA. SIL, based in the Channel
Islands, is regulated by the Guernsey Financial
Services Commission (GFSC).
The Group’s governance arrangements are designed
to ensure that it meets the requirements and
expectations of its members, colleagues and
regulators. The Group is run by the Board of
Directors and assisted by board Committees, which
are responsible for a range of activities. More
information on these Committees is included on
page 74.
On a day-to-day basis the Group Chief Executive is
responsible for ensuring that the Group meets its
strategic and operational objectives as defined in the
Corporate Plan. He is assisted by the Group
Executive Committee, which he chairs, comprising
the Society’s executive directors and other Group
executives.
Each Group subsidiary is governed by a board. Each
subsidiary board is responsible for the prudent
management of the subsidiary’s businesses,
operating within the Board’s appetite for risk and
delegated authorities from the Board, to deliver
agreed Corporate Plan objectives.
The boards of Connells Group, Jade and SIL have
historically contained at least one shareholder non-
executive director (appointed by the Society or the
direct parent company). A full review of corporate
governance arrangements across our Group was
conducted in 2024 to ensure that the boards of our
key subsidiaries operate with an appropriate level of
independence and flexibility.
Mark Lund (the Deputy Chair and Senior Independent
Director (SID) of the Society) is also the Chair of the
Connells board. Philip Moore (a non-executive
director of the Society) is chair of the Connells Board
Audit and Risk Committee
-
as detailed in my Chair's
Statement, Philip Moore will be stepping down from
his Connells and Society roles at the Society's AGM
in April 2025). Eric Barnett is the Independent Chair
of SIL, Anthony Chapman is the Chair of SBF and Sue
Suckling is the Chair of Jade.
The Board’s ‘principles of governance’, which are
summarised below, provide the framework through
which the Society establishes its systems and
processes concerned with the overall direction,
effectiveness and control of the Group.
The Role of the Board
The Board’s terms of reference clearly set out its responsibility for the overall stewardship of the Group within
the context of the Group’s ‘principles of governance’ which are described below:
Governing
Body
The Society is headed by an effective Board which is responsible for the long-term
success of the Group.
The Board formulates strategy and establishes the Society’s risk appetite and balance
sheet strategy. It is organised to have a proper understanding of, and competence to deal
with, the current and emerging issues facing the business of the Group, exercising
independent judgement, and effectively reviewing and challenging the performance of
management.
Management
and Oversight
The Society’s management and oversight framework enables the Board to provide
strategic guidance to, and effective oversight of, management throughout the Group.
The governance framework clarifies the respective roles and responsibilities of directors
and senior executives in order to facilitate Board and management accountability to the
Group and the Society’s members. This ensures a balance of authority such that no single
individual has unfettered powers. It has clear lines of sight into activities to enable
challenge and oversight, allowing the Board to obtain assurance over performance, the
integrity of reporting and effectiveness of control implementation.
Recognise
and Manage
Risk
The Board has a sound system of risk oversight, risk management and internal control
supported by timely and transparent reporting.
The governance framework identifies, assesses, manages and monitors risk on an
ongoing basis. It informs management and the Board of material changes to the risk
profile of the Group and facilitates challenge of the effectiveness of actions taken to
mitigate risk. It is designed to be forward-looking in approach to reduce both the
likelihood and the impact of known risks crystallising.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 71
The Board has established a framework of
authorities that maps out the structure of high-level
delegation below Board level and specifies those
issues which remain the responsibility of the Board.
The Board also has a general duty to ensure that the
Group operates within the Society’s Rules, relevant
laws, regulations and guidance issued by relevant
regulatory authorities and that proper accounting
records and effective systems of internal control are
established, maintained and audited.
Culture
The Board has agreed purpose, behaviours and
culture statements for the Society to ensure there is
clear direction for the business and clear
expectations of how we wish our people to behave.
Our purpose remains constant: we are here to help
more people have a home, help people save for life
ahead and support long-term financial well-being. To
help deliver this it is important that culturally we
maintain a working environment where members
and customers are at the centre of our thinking and
the benefits of diversity amongst our workforce and
the communities we serve is recognised and utilised.
The Board monitors culture in a number of ways
such as through customer feedback, employee
surveys (internally and externally facilitated) and
independent assurance reviews. The Group Chief
People Officer formally reports to the Board
periodically on the conclusions of all work carried
out in this area and how our culture might evolve to
ensure it remains effective.
Board meetings
The Board met nine times during 2024. In line with
good governance the non-executive directors also
meet, without the executive directors present after
each Board meeting. The attendance record of each
director at each Board and Board committee
meeting is set out on page 80.
In addition, the Board held three strategy meetings in
the year, in June, September and December, where
the Group’s strategic objectives (which the Board
formally approved in December 2023) were reviewed
and discussed.
To enable the Board to use its time effectively, a
forward-looking meeting planner and rolling Board
agenda is maintained by the Group Secretary and
General Counsel. There is sufficient flexibility in the
Board’s agenda to ensure that the Board can
address emerging matters in a timely manner.
Each Board meeting receives:
▪ reports from the Chair, Group Chief Executive
and the Group Chief Financial Officer;
▪ a detailed management report on the Society
and the Group, containing financial and non-
financial data; and
▪ updates on all Board committee meetings held
since the previous meeting of the Board.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 72
Responsibility Key Activity
Strategy
• Approved the ongoing Corporate Plan and monitored delivery of the strategic actions
identified to achieve the Group’s strategy.
• Reviewed progress on the delivery of each of the Society’s key strategic change
projects, particularly focusing on the development of the Society’s digital capabilities.
Risk
Management
and Regulatory
Matters
• Approved the Society’s risk appetite and monitored ongoing adherence.
• Approved the Board Risk Appetite Statement, the Internal Liquidity Adequacy
Assessment Process (ILAAP) and the Internal Capital Adequacy Assessment Process
(ICAAP).
• Approved the Society’s Recovery Plan and Resolvability Assessment Framework
(RAF) to ensure that adequate provisions and processes are in place to protect the
Society’s business and its members.
• Reviewed and approved the Society’s Health and Safety Return.
• Approved the Consumer Duty Board Assessment.
• Approved the Operational Resilience Self-Assessment.
Performance
and Financial
Reporting
• Reviewed and approved the Society’s interim and full year financial results.
• Reviewed and approved the Society’s Annual Report & Accounts and Summary
Financial Statements.
• Approved the Society’s costs budget for 2025.
• Approved the Society’s Long-term Viability Statement.
• Approved the Letter of Representation to the Auditors.
• Reviewed and approved the Quarterly Performance Reviews and reforecasts.
People and
Culture
• Appointed Paul Chambers as an executive director on 26 March 2024 .
• Appointed Hasintha Gunawickrema as non-executive director on 1 November 2024.
• Reviewed the 2025-2029 Colleague Plan.
• Considered the outcome of the 2024 Colleague Membership Survey.
• Considered the annual report on Gender Pay Gap within the Society.
• Received an update on the colleague listening sessions.
• Approved the Board Composition Policy.
Environmental,
Social and
Governance
(ESG)
• Completed the annual review and approved the terms of reference of the Board and
each of its committees (with the exception of Board Change and Board Risk
Committees, which have been reviewed by those committees and are due to be
presented for Board approval in Q1 2025).
• Monitored progress on the Board Effectiveness Action Plan resulting from the
external board effectiveness review.
• Approved arrangements connected with the Society’s annual general meeting.
• Approved the Society’s Modern Slavery and Human Trafficking Statement.
• Reviewed and approved the Society’s Speak Out (Whistleblowing) Policy and received
the Whistleblowing Champion’s Annual Report.
• Approved the Group Sustainability Report.
• Approved updated Group governance arrangements, following review.
• Approved conflicts of interest and directors’ outside interests, as necessary.
Below is a sample of some of the matters considered by the Board during the year:
Governance Financial Statements
Other Information
Performance & Strategy
Skipton Group Annual Report & Accounts 2024 73
Gwyn Burr
(Chair)
Gwyn Burr
(Chair)
Iain Cummings
Steven Davis
Hasintha
Gunawickrema
Denis Hall
Heather Jackson
Mark Lund
Philip Moore
Heather Jackson
(Chair)
Iain Cummings
Board Audit
Committee
Board Change
Committee
Board Risk
Committee
Group Chair: Gwyn Burr
Responsible for setting the Board’s agenda, leading the Board and ensuring
the Board’s effectiveness.
Board: 11 Directors
Responsible for the overall conduct of the Society’s business, setting
Group strategy and exercising oversight over the Group
Non-Executive
Directors
Gwyn Burr, Iain Cummings, Steven Davis, Hasintha
Gunawickrema, Denis Hall, Heather Jackson, Mark
Lund, Philip Moore
Executive Directors Stuart Haire, Andrew Bottomley, Paul Chambers
Iain Cummings
(Chair)
Dennis Hall
Mark Lund
Philip Moore
Steven Davis
(Chair)
Mark Lund
Heather Jackson
Board
Nominations
Committee
Board
Remuneration
Committee
Non-Executive
Remuneration
Committee
Stuart Haire
Andrew Bottomley
Paul Chambers
Denis Hall
(Chair)
Heather Jackson
Iain Cummings
Philip Moore
Performance & Strategy Governance Financial Statements
Other Information
For the Board to be effective, the relationship between the executive directors and non-executive directors
must be constructive and one of openness and respect. The boardroom environment is collegiate and all are
encouraged to contribute. The role of the non-executive directors is not only to challenge but to support the
Group Executive Committee and bring their experience to bear. To this end, the non-executive directors are
welcomed to meetings outside the formal Board and committee structure, which develops their understanding
of the business and allows the management teams to benefit from their experience and fully understand the
non-executive perspective on particular issues.
Board Structure at 31December 2024
Members: Non-executive directors
Members: Executive directors
Skipton Group Annual Report & Accounts 2024 74
Board Committees
The Board has delegated certain matters to its committees (comprised only of non-executive directors) in
order that these can be considered in more detail. The Board committee structure comprises:
• Board Audit Committee – further details in the Board Audit Committee Report;
• Board Change Committee – further details in the Board Change Committee Report;
• Board Nominations Committee – further details in the section below headed ‘Appointments to the Board
and its committees’;
• Board Remuneration Committee – further details in the Directors’ Remuneration Report;
• Non-Executive Remuneration Committee – further details in the Directors’ Remuneration Report;
• Board Risk Committee – further details are set out in the Risk Management Report.
The terms of reference of all Board committees are available at skipton.co.uk/about-us/governance or from
the Group Secretary and General Counsel, on request.
Board Composition
Under the Society’s Rules, the Board must comprise no more than 15 and no less than six directors and, under
the UK Corporate Governance Code, at least half of the Board should comprise non-executive directors. At 31
December 2024, the Board comprised the Chair, seven independent non-executive directors and three
executive directors. This composition is designed to be able to meet the needs of the Group and allow for
appropriate and efficient operation of the Board’s committees. Details of the Society’s directors are set out in
the Board of Directors section.
Mark Lund and Philip Moore will step down from the board at the 2025 AGM. An independent recruitment
search firm, Russell Reynolds, which has no connection to the Society or any individual directors, has been
appointed to assist in the recruitment of the non-executive director vacancies. Andrew Bottomley will also step
down from the Board at the AGM and will not be replaced on the Board.
The diagrams below set out the current composition of the Board in respect of tenure, age, gender and the
number of executive and non-executive directors.
At 31 December 2024, three members (27%) of the Board were female. Improving this ratio and harnessing the
benefits of diversity is a key consideration in all new recruitment to the Board. The Society is a signatory to the
Women in Finance Charter, which underlines the Board’s commitment to gender equality.
As Chair, I will continue to review the size and composition of the Board and its committees regularly, in
conjunction with the Board Nominations Committee, to ensure that they are optimally resourced and refreshed
at appropriate intervals. Our Board Composition Policy is available on the Society’s website at
http://www.skipton.co.uk/about-us/governance/board-composition-policy.
Tenure of Non-Exec DirectorsAge of all Directors
Performance & Strategy Governance Financial Statements
Other Information
8
3
0
1
2
3
4
5
6
7
8
9
Male Female
All Directors (11)
8
3
0
1
2
3
4
5
6
7
8
9
Non-Exec Exec
1
4
6
0
1
2
3
4
5
6
7
40-49 50-59 60+
1
3
2 2
0
0.5
1
1.5
2
2.5
3
3.5
<1 year 1 to 3 3 to 6 >6
Non-Executive Directors Only (8)
All Directors (11) All Directors (11)
Gender of all Directors
Type of Director
Skipton Group Annual Report & Accounts 2024 75
Appointments to the Board and its committees and
at executive level
The Board Nominations Committee (NomCo), which
comprises all the Society’s non-executive directors,
is chaired by me and leads the process for Board
and Group Executive Committee appointments and
succession planning.
NomCo has succession planning as a key area of
focus and conducts an annual review of the
structure, size and composition of the Board to
ensure it contains the required balance of skills,
knowledge and experience relevant to the activities
of the Group. This review assesses what is required
both in the short-term and the longer-term to deliver
the Group’s strategy in light of its priorities and
changing customer behaviours. A formal review was
undertaken by NomCo in Q1 2024, following receipt
of the external Board evaluation undertaken by Clare
Chalmers Ltd in late 2023. Details of the outcome of
the evaluation are noted in the Board evaluation
section below. NomCo also considered board
composition when it met in Q4 2024.
Succession requirements must cater for both
planned and unplanned events. To this end, the
Board has undertaken a review of succession
planning for senior executives. The succession
planning work for that group and their direct reports
also considers all aspects of diversity including
gender balance. Succession plans are designed to
ensure that those identified as having potential at
these levels and in the talent pool below are provided
with relevant development opportunities and, where
appropriate, that effective contingency arrangements
are in place.
Appointments to the Board, its committees and to
the Group Executive Committee are made by the
Board on the recommendation of NomCo, in
consultation with relevant committees’ chairs, where
appropriate. All appointments are made on merit. In
making appointments, the Board considers all
aspects of diversity, including age, experience and
gender when reviewing the composition of the Board,
its committees and the Group Executive Committee.
Tenure, election and re-election of Directors
The Code recommends that all directors of FTSE 350
companies should stand for annual re-election.
Adopting this best practice, the Society’s Rules
require that all directors stand for re-election every
year. Non-executive directors are generally appointed
for an initial period of three years and, whilst
expected to serve for six years, this may be extended
to nine years in total.
All of our directors are subject to election following
their appointment and annual re-election by our
members at the AGM based on the best practice set
out in the Code. Details of each individual director’s
role and experience and are set out in the booklet
accompanying the Notice of AGM sent to all
qualifying members each year.
Independence
No non-executive directors have any direct business
relations with the Society or any of its subsidiaries or
have any personal or family ties with any of the
businesses’ advisers, other directors, or senior
employees.
The Board considers all the non-executive directors
to have been independent at the time of their
appointment and to have continued to be so in
accordance with the criteria set out in the Code.
As Chair, I can confirm that I am independent and
have no conflicting relationships or circumstances
that might affect my judgement on Group or Society
matters.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 76
Division of responsibilities
The offices of the Board Chair and the Group Chief Executive are distinct and held by different individuals. The
role of each role holder is set out in their role profiles and terms of appointment.
Responsibilities
Chair of the Board
Gwyn Burr
• Managing and providing leadership to the Board and Group, safeguarding
and promoting the long-term success and sustainability of the Society in
the interests of current and future members.
• Establishing agendas for Board meetings, ensuring they are appropriately
focused on strategy, performance, culture and risk management matters,
and proactively manage the annual calendar of business to ensure the
most appropriate use of the Board’s time.
• Fostering a culture where Board members are able to challenge issues
openly and encourage and manage strong debate whilst achieving
decisions on issues considered by the Board.
• Demonstrating ethical leadership and upholding the highest standards of
integrity and probity, setting clear expectations concerning the Society’s
and Group’s culture and behaviour.
•
Building an effective and diverse Board reflecting an appropriate balance of
skills and experience given the Group’s current and future activities.
• Leading the development of, and monitoring the effective implementation
of, policies and procedures for the training and professional development
of all the non-executive directors.
• Ensuring effective communication with all stakeholder groups, and
communicating with the Society’s members on behalf of the Board.
• Supporting the Group Chief Executive and leading the annual appraisal of
the Group Chief Executive.
Responsibilities
Group Chief Executive
Stuart Haire
• Delivering the strategy for the Group as set by the Board.
• Ensuring the prudent day-to-day management of all Group businesses.
• Providing leadership and direction to, and developing the vision and
strategy of, the Group.
• Communicating the purpose, vision, strategy and performance of the
Skipton Group to members, colleagues, regulators and other stakeholders.
• Building and leading an effective Group executive team to manage Group
businesses in the longer-term interests of the Society’s members.
• Ensuring that effective succession and development plans are in place and
implemented for all key executive roles.
• Leading the Group Executive Committee to successfully deliver agreed
plans, objectives and targets within the Board agreed appetite for risk.
• Monitoring the effective implementation of policies and procedures for the
induction, training and on-going development of all individuals performing
designated senior management functions on behalf of the Group.
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Skipton Group Annual Report & Accounts 2024 77
The Senior Independent Director and Deputy Chair plays a key role in supporting the Chair in leading the Board
of Directors and acting as s sounding board and source of advice for the Chair and the Board. The purpose of
the role is set out below.
As highlighted in the Chair's Statement, Mark Lund will also be retiring from the Board at the 2025 AGM, and
his replacement as Senior Independent Director will be announced at the earliest opportunity.
Time commitment
One of the criteria which the Board takes into consideration when recruiting a non-executive director is their
ability to commit sufficient time to take on the position. In addition, throughout their term of office with the
Society, directors are required to inform the Chair in advance of any other positions that they wish to take up
so that the time commitment and any potential conflict of interest can be considered.
Copies of the letter of appointment for each of the non-executive directors are available for inspection on
request from the Group Secretary and General Counsel.
Responsibilities
Senior Independent
Director, Deputy Chair,
Mark Lund
• In conjunction with the Chair providing support and challenge to the Group
Chief Executive and other members of the senior management team, and
building a working relationship with them, that enables this to happen
effectively.
• Upholding high standards of integrity and probity and supporting the Chair
and Executive directors in instilling the appropriate culture, values and
behaviours in the boardroom and beyond.
• Working closely with the Chair, deputise for the Chair in their absence and
act as a sounding board, sharing with the Chair other representative duties
and providing support as and when required.
• Acting as an intermediary for other Directors as and when necessary.
• Be available to meet with any directors or other key stakeholders, including
regulators, to understand their concerns and, in the event that contact with
the Chair and/or Group Chief Executive is inappropriate or has failed, to
present their views to the Board as a whole.
• Lead the annual performance evaluation of the Chair, meeting with the
Non-executive directors (without the Chair or Executive directors present)
for this purpose, ensuring that views of the Executive directors are also
taken into account.
Role
Expected Annual Commitment
Chair
80
– 100 days
Senior Independent Director & Deputy Chair
As required to fulfil the role
Non
-executive directors
30
– 36 days
Committee Chairs (in addition to above commitments)
Expected Monthly Commitment
Board Audit Committee
2 to 2.5 days per month
Board Change Committee
1.5 to 2 days per month
Board Remuneration Committee
2 days per month
Board Risk Committee
3 to 3.5 days per month
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Skipton Group Annual Report & Accounts 2024 78
Conflicts of interest
The Society's directors are required to comply with
the Board Conflicts of Interest Policy. The policy
gives effect to various legal and regulatory
requirements on the Society in relation to conflicts of
interest and aims to ensure that directors of the
Society do not assume roles which would conflict
with their obligations as a director of the Society.
Prior to appointment, all potential directors are
required to disclose any actual or potential conflicts
of interest that may prevent them from taking on an
appointment with the Society.
In addition, all directors must seek approval from the
Chair and the Group Secretary and General Counsel
before committing to any additional external
appointment. Where such approval is sought, the
director must confirm the existence of any potential
or actual conflicts and that the role will not exceed
the maximum number of directorships permitted (in
accordance with regulatory requirements). Such a
director is required to provide assurance that the
appointment will not adversely impact that
individual’s ability to continue to fulfil their role as a
director of the Society.
In accordance with their duties as directors, each
director is also obliged to notify the Board of any
actual or potential interest that they have in a matter
to be considered at a meeting. If any potential
conflict does arise, the Board Conflicts of Interest
Policy permits the Board to authorise a conflict,
subject to any conditions or limitations as it may
deem appropriate. Such instances are recorded in
the minutes of the relevant meeting. The Board
maintains a register of conflicts of interest which is
maintained by the Group Secretary and General
Counsel.
Induction and professional development
On appointment, new directors receive a
comprehensive and tailored induction programme
covering the Group’s businesses and regulatory
environment. The Code specifies that directors must
have access to the necessary resources to update
their knowledge and capabilities. In addition, each
director undergoes an annual "fit and proper"
assessment in compliance with regulatory
requirements, one element of which is competence
and capability. Ongoing training and development
needs are identified and addressed through regular
review and usually take the form of attendance at
external seminars and Board training sessions led by
relevant internal and external specialists. Those
directors from a non-banking background are
provided with specific training on the capital and
liquidity regimes governing the Society’s operations.
Non-executive directors are encouraged to liaise with
individual members of the Group Executive
Committee to demonstrate support and to undertake
subsidiary, branch and department visits on an
ongoing basis.
Directors have access to the advice and services of
the Group Secretary and General Counsel, who is
responsible for advising the Board on all corporate
governance matters and for ensuring that Board
procedures are followed. The appointment of the
Group Secretary and General Counsel is a matter
reserved to the Board.
All directors also have access to independent
professional advice, if required, at the expense of the
business and have the benefit of appropriate liability
insurance cover.
Board evaluation
The Board undertakes an annual performance and
effectiveness evaluation of itself and its committees.
At least every three years this review is conducted by
an external facilitator. Following the completion of a
competitive tendering process, the Board engaged
Clare Chalmers Ltd to undertake the 2023 annual
performance evaluation of the Board and its
committees. Claire Chalmers Ltd has no connection
with the Board or any individual directors.
This review was completed in Q4 2023. The
methodology included observing Board and Board
committee meetings, one-to-one interviews with all
non-executive and executive directors and an
opportunity for Board members to ask questions and
discuss the findings of the final report. The
outcomes of the review were discussed at the Board
meeting in February 2024.
The review concluded that the Board brings strong
and relevant skills and is an engaged and interactive
environment, with plenty of valuable debate and
challenge. Clare Chalmers’ report highlighted three
key strengths of the Board: (i) making space for
strategic decisions, (ii) a Board training programme
identifying and actioning individual and collective
training and development needs and (iii) the Board’s
consideration of membership into its decision
making.
In terms of continuous improvement, the suggested
areas of focus arising from the 2023 external Board
and Board committee evaluation process were:
• The Board has recognised the need to take a
more forward-looking approach to succession
planning and Board composition planning,
considering the skills the Board needs for the
future.
• The Board will continue to increase focus on
oversight of Group subsidiaries, with a focus
around risk appetites across the Group.
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Skipton Group Annual Report & Accounts 2024 79
• The Board recognised the need to formalise
senior management succession planning
processes and ensure talent, development and
other people-related topics come to the Board
more regularly.
The key suggestions for enhancement were used to
inform a Board Effectiveness Action Plan for 2024,
the progress of which has been monitored during
2024 and will continue to be monitored beyond by
the Board. The annual internal Board evaluation
process is underway with surveys completed in
December 2024.
Individual review
Individual non-executive directors are evaluated on a
one-to-one basis by the Chair. Executive directors are
evaluated by the Group Chief Executive against
agreed performance targets for their areas of
responsibility and their own personal performance.
The Chair evaluates the Group Chief Executive’s
performance whilst the Deputy Chair and Senior
Independent Director leads the Board evaluation of
the Chair’s performance. All such reviews are
conducted at least annually and documented
accordingly.
Remuneration
Details relating to directors’ remuneration are
contained in the Directors' Remuneration Report.
Directors’ service contracts and notice periods
The executive directors are engaged on rolling
service contracts which can be terminated by either
the Society or the director giving one year’s notice.
Unless notice to terminate is given by either party,
the contracts continue automatically.
All non-executive directors are provided with a letter
of appointment on joining the Board and do not have
service contracts.
Accountability & Audit
Financial reporting
The directors, after making appropriate enquiries and
on review of internal management reports and
completion of the external audit, consider that these
Annual Report and Accounts, taken as a whole, are
fair, balanced and understandable, and provide the
information necessary for members to assess the
Group’s performance, business model and strategy.
Further details on how this conclusion has been
arrived at can be found in the Board Audit
Committee Report.
The responsibilities of the directors in relation to the
preparation of the Group’s Annual Accounts and a
statement that the Group is a going concern are
contained in the statements of directors’
responsibilities in the Directors’ Report.
Risk management and internal control
The Board is responsible for determining the Group’s
strategy for managing risk and overseeing its
systems of internal control, which includes reviewing
and approving its risk appetite on, at least, an annual
basis.
The executive directors and senior management are
responsible for the continuous operation of an
effective Group risk management framework based
on a robust system of internal control. Such systems
are designed to manage rather than eliminate the
risk of failure to achieve the Group’s business
objectives. The principal categories of risk
confronting the Group are described in greater detail
in the Risk Management Report, together with an
explanation of the Three Lines of Defence framework
adopted by the Group for managing risk.
The Board reviews the ongoing effectiveness of its
internal control systems through a combination of
processes including:
• Regular reports to the Board by the chairs of its
various committees;
• Presentations to the Board by functional leaders
relating to the strategy and performance of
businesses within each of the divisions,
summarising business performance, key business
risks, issues and strategies;
• Regular reports to the Board, through the Board
Audit Committee, from the Group Internal Audit
function in respect of its independent audits of
risk management processes and effectiveness of
internal controls across the Group. The Group
Chief Internal Auditor reports to the Chair of the
Board Audit Committee and attends Board Audit
Committee meetings; and
• Regular reports to the Board, through the Board
Risk Committee, from the Risk function on the
principal conduct, operational, credit, market and
liquidity risks facing the Group and the strength of
the controls in place to mitigate these.
The Group has a comprehensive system for
reporting financial results to the Board. Each
business prepares monthly management information
with comparisons against budget which the Board
reviews and challenges, as appropriate, where
performance is not in line with expectations.
The Group has a number of central oversight and
control functions, including Finance, Risk and
Compliance, which establish and monitor the
implementation of compliance and operational
standards. Each of these functions is subject to
review by the Group Internal Audit function.
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Skipton Group Annual Report & Accounts 2024 80
The Group Internal Audit function is responsible for
independently reviewing and reporting on the
adequacy and effectiveness of internal controls
operated by management throughout the Group,
thereby helping to evaluate and improve the
effectiveness of risk management. Through its
programme of work, approved by the Board Audit
Committee, the Group Internal Audit function is able
to provide assurance on control effectiveness.
To ensure sufficient focus is devoted to risk
oversight, the Group Chief Risk Officer role is a
senior executive position and member of the Group
Executive Committee. The Board Risk Committee
and the Board receive regular reports from the Group
Chief Risk Officer throughout the year and he attends
all meetings of the Board. The Board is satisfied that
it understands the risks confronting the Group and
that senior management are taking appropriate
action to mitigate these. More detail is provided on
these in the Risk Management Report.
To further strengthen the standard of Group
governance, a new Group Risk Management
Framework (‘GRMF’) was approved by the Board Risk
Committee in July 2024. The GRMF defines clear risk
management roles and responsibilities, governance
structures and risk reporting expectations across all
Group businesses. The Board is satisfied that the
Group maintained an adequate system of internal
control during 2024, with a clear focus on risk
management. This was carried out in a manner that
met the requirements of the Code and good business
practice generally.
Board and Committee membership attendance record
The attendance of directors at scheduled Board and committee meetings during the year is set out below:
Scheduled
Board
Board Audit
Committee
Board
Change
Committee
Board
Nominations
Committee
Board
Remuneration
Committee
Board Risk
Committee
NED
Remuneration
Committee
Gwyn Burr
9 of 9 3 of 3 1 of 1
Andrew
Bottomley
9 of 9
1 of 1
Paul Chambers
2
7 of 7 1 of 1
Iain Cummings
9 of 9 5 of 5 4 of 4 3 of 3 9 of 9
Steven Davis
9 of 9 3 of 3 7 of 7
Hasintha
Gunawickrema
3
1 of 1 1 of 1
Stuart Haire
9 of 9 1 of 1
Denis Hall
9 of 9 5 of 5 3 of 3 9 of 9
Heather Jackson
9 of 9 4 of 4 3 of 3 7 of 7 9 of 9
Mark Lund
9 of 9 5 of 5 3 of 3 7 of 7
Bobby Ndawula
4
2 of 2
Philip Moore
9 of 9 5 of 5 3 of 3 9 of 9
Sarah Whitney
5
1 of 1
Notes
1. Where directors are not available to attend meetings, they still receive all papers and provide feedback as
appropriate.
2. Paul Chambers was appointed as an executive director on 26 March 2024.
3. Hasintha Gunawickrema was appointed as a non-executive director on 1 November 2024.
4. Bobby Ndawula resigned from the Board on 26 March 2024.
5. Sarah Whitney resigned from the Board on 29 February 2024.
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Skipton Group Annual Report & Accounts 2024 81
Relations with stakeholders
The Board understands the importance of engaging
with its stakeholders and ensuring that it is aware of
their views and alert to any concerns. It has
identified its key stakeholders as: our members and
customers; our people; our suppliers; our banking
counterparties; and our regulators.
Members and customers
The Society’s membership comprises its savers,
borrowers, holders of its Permanent Interest Bearing
Shares (PIBS) and non-corporate borrowers. A
'member' is different to a shareholder of a listed
company, whose owners may include institutional
shareholders.
The vast majority of the Society’s customers are,
therefore, its members. Against a backdrop of
significant economic and political uncertainty, it is of
the utmost importance that we understand our
members and listen closely to their views. In
recognition of this, the Society actively seeks
feedback from members on all aspects of its
activities and strives to respond quickly to points
requiring action.
The insights generated from our member research
have been used to develop marketing campaigns,
improve products and member journeys, and to
inform our strategic planning. All our research is
conducted by skilled Market Research Society
registered practitioners, employed both in-house and
through carefully selected partners (including award-
winning research agencies).
Further, to help fulfil our aim of allowing meaningful
participation, we’ve recently grown our Member
Panel to over 23,000 panellists. Over the last year,
Panel feedback has helped us better understand
topics such as ‘home mover boxes’, new savings
product ideas, the ‘greening’ of UK homes and a
range of proposed new mortgage functions.
We understand that now, more than ever, our
members want to make the most of their money and
we were able to make various improvements in 2024
that have benefitted our members:
• We expanded our member exclusive savings
range further, giving members access to
exclusive savings rates. Throughout 2024 we saw
over 107k accounts opened.
• Alongside our member exclusive range, we
continued to offer competitive savings rates
across the entire range and as at 31 December
2024 we paid 0.74% above market average.
• We developed new products and functionality to
suit our customer needs.
• We developed our support for members, through
a My Money Review or Enquiry where our skilled
colleagues provide advice to help members make
clear, informed decisions; helping their money
work harder.
• We are one of only a handful of providers to offer
multiple Cash ISA account functionality for
current year ISA subscriptions, giving our
members more choice in how they split their ISA
allowance.
• We’re here to help more people than ever have a
home and have continued to innovate to make
this a reality.
• We continue to be the largest high street provider
of the Lifetime ISA, a product designed to give a
boost to first-time buyers saving for a deposit.
We’ve enabled bonus payments from the
Government of over £50m in 2024.
• In September, following feedback, we expanded
our Track Record product range to make it
available to more first-time buyers. We also offer
mortgages on properties bought through
Government Schemes including Shared
Ownership and LIFT, as people continue to need a
variety of solutions to take their first step onto the
ladder.
• We created a first-time buyer helpdesk, to provide
would-be buyers with access to help and advice
when they need it, throughout the buying journey.
• Helping homeowners and landlords to reduce
their carbon footprint remains a priority for us and
we understand that the first step is access to
expert guidance. That’s why we continue to offer
free EPC+ reports to all our members.
• This year has also seen us complete a full retrofit
on a Society owned property with a view to
supporting our customers in understanding the
practicalities of installing carbon-reducing
measures in their own homes. We’ll also use our
findings to influence policy makers.
In 2024 the Society has continued to achieve
extremely high levels of net member satisfaction,
scoring 90% in 2024.
As a mutual organisation it’s important for us to be
transparent in sharing our member feedback. This
has been demonstrated by our continued pursuit to
gain public reviews from members via our
partnership with Trustpilot. Since integrating this
with our existing ongoing research programme
towards the end of 2020, we have maintained a
strong rating of 4.3 stars out of 5 as at 31 December
2024.
Our people
It is important to us that we have a thorough
understanding of our peoples’ views regarding their
experience of working at the Society and we do this
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Skipton Group Annual Report & Accounts 2024 82
in a number of ways – through team meetings,
surveys, employer review websites, listening
sessions and independent assessments. We have
built on our work in 2023 and continued to evolve our
approach to colleague listening and involvement
during 2024, focusing more on developing our
culture and ways of working. The Behaviours
Framework has been incorporated into our strategic
communications, leadership definition, performance
management and approach to colleague recognition.
Colleagues have been active in our work around
culture and the behavioural shift as a result. Our
target culture recognises our cultural strengths, our
colleagues’ desire for change and a focus on
delivering the best for our members.
Part of our evolving approach to colleague listening
and participation is the desire to influence the large
and small details that form part of the everyday
colleague experience. In terms of the large details,
we have a programme to transform our technology,
customer and colleague journeys where we are
directly engaging with colleagues on how we build
our systems and processes. As part of our
Transformation Programme, we actively involve
colleagues in testing the customer engagement
platform, asking them to be critical and find what
worked and what we can improve on.
In terms of the smaller but important details,
additional emphasis has been placed on leaders
listening to their teams for feedback and to act upon
this locally, empowering both leaders and
colleagues. The changes to the organisational
structure were designed with outcomes such as
better decision-making, communication and
engagement in mind, by having more empowered
colleagues closer to senior leaders to influence how
we work. We feel it is important that the experience
of colleagues and utilisation of feedback should be
active locally through all leaders and teams, rather
than centrally, and we’ve invested in training all our
leaders in conversational skills to support this. We
will continue to use colleague feedback to inform our
work and plan to build on that following a successful
pilot, by moving to a pulse format approach to
colleague listening in 2025, which will further
enhance the way we engage with our colleague base.
In line with the Code’s requirements, the Board
appointed non-executive director Philip Moore to be
the director responsible for providing a further
avenue for the voice of our people to be heard at the
Board table. In 2024, he continued to conduct a
series of ‘listening sessions’ where up to 20 of our
colleagues at a time are invited to a meeting to share
their views on the Society, how they feel in the
workplace, how they feel customers are treated,
ideas on what we could do better and any other topic
they wish to raise. A summary of the feedback from
each session has been shared with the Board.
Together with regular personal communications
from members of the Group Executive Committee in
the form of videos, we have also continued to hold
quarterly Strategic Updates where colleagues can
ask questions of the Group Chief Executive and the
Group Executive Committee regarding our direction
of travel.
Suppliers
The Group closely monitors all its business
relationships with suppliers, on an ongoing basis,
assessing any risk of an adverse impact on our
members, customers, our people and the
environment in which we operate as a result of these
relationships, or as a result of our policies.
There is a continuing focus on the development of
the supplier management framework to strengthen
the oversight and relationships we have with our
suppliers. As part of this framework we issue an
annual, online, anonymous questionnaire for
completion by suppliers to assess our performance
as a customer. The topics covered include how
timely and accurate we are when paying invoices, if
our corporate responsibility values are clear and
views on whether we live these, and strength of
relationships and comparison of our approach to
other clients. Previous feedback has been very
positive and the latest survey was issued to
suppliers in Q4 2024 with an update to the Board
planned for Q1 2025.
As part of our focus on sustainability, the Group is
clear regarding the selection of new firms aligning to
our expectations and sustainability goals. We are
now looking at ways in which we can help support
our existing supply chain achieve better ESG
outcomes using data from our ESG assessment
platform.
Regulators
Fostering a positive relationship with our regulators
is a key priority for the Board and senior
management team, supported by continuous
dialogue as appropriate. This involves not only the
provision of prescribed reports but updates from the
senior management team on matters we believe
should be drawn to our regulators’ attention. The
Board sees it as important that regulatory bodies are
kept up to date with strategic and operational
developments within the Group and that they
maintain ongoing confidence in the Board and
management team.
Banking counterparties
Senior executives and our Treasury team hold
meetings with banks and debt investors, where
appropriate, to update them on the Group’s
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Skipton Group Annual Report & Accounts 2024 83
performance and respond to any questions. This is a
long-established arrangement which continues to
work well.
Whistleblowing (speaking out)
The Society has in place arrangements to ensure
that colleagues speak up and can raise concerns in
confidence and anonymously, and that these can be
investigated and properly dealt with.
The Society is committed to ensuring that no one will
be at risk of detrimental treatment from the Society
or its employees as a result of raising a concern.
The Society provides training on whistleblowing
annually to all colleagues and on induction for new
colleagues. The Society makes use of a channel
which enables colleagues and third parties to report
concerns via Safecall, an independent third party.
Each major business within the Group maintains its
own whistleblowing policy. The Board’s commitment
to whistleblowing is supported by the appointment of
a non-executive director as the Speak Out Champion
for this important area. This is the responsibility of
Iain Cummings, who also chairs the Board Audit
Committee.
The Speak Out Champion has overall responsibility
for ensuring and overseeing the integrity,
independence and effectiveness of the Society’s and
the Group’s whistleblowing policies and procedures,
including arrangements for protecting
whistleblowers against detrimental treatment. The
Speak Out Champion ensures that a report is
presented to the Board annually regarding the
effectiveness of whistleblowing systems and
controls across the Group.
The Annual General Meeting (AGM)
Each year the Society gives all eligible members at
least 21 days’ notice of its AGM. At the meeting, the
Chair, the Group Chief Executive and the Group Chief
Financial Officer report back to members on the
previous year’s performance and the main
developments across the Group. Eligible members
have the opportunity to raise questions and put
forward their views on the AGM items of business.
All directors normally attend the AGM, unless their
absence cannot be avoided, and are available for
questions both during a ‘question and answer’
session in the meeting and on an individual basis
before and after the meeting.
All eligible members are encouraged to vote at the
AGM (either personally or by appointing a
representative), although the voting form also
includes a ‘vote withheld’ option. Members can vote
either at the AGM in person, by post or online. All
votes are returned to independent scrutineers. A poll
is called in relation to each item of business at the
AGM and the results of the vote are published on the
Society’s website and in branches. As a minimum,
the Society’s members at the AGM are asked to vote
on the Society’s Annual Report and Accounts,
election or re-election of all directors, appointment or
re-appointment of the external auditor and the
Directors’ Remuneration Report.
I am pleased to report that no resolution received
less than 91% support from members at the 2024
AGM.
Board priorities in 2025
Together with the senior leadership team, the Board
will continue to focus on the delivery of the Group’s
strategy in 2025 through our Corporate Plan. Other
priorities for the Board in 2025 include:
• Continuing to enhance Group oversight and
governance arrangements across the Group,
including implementing all applicable
requirements of the revised UK Corporate
Governance Code published in January 2024;
• Continuing its oversight of Consumer Duty
following on from the training and updates
received during 2024;
• Continuing to oversee the actions arising from the
2023 externally facilitated review of the Board’s
own effectiveness;
• Fostering an open and inclusive culture which
supports and promotes individual personal
development through the performance and
accountability evaluation mechanism;
• Maintaining a focus on geopolitical risks and the
potential impact of those risks on members and
the communities served by the Group;
• Continuing its oversight of the Society’s and the
Group’s change programmes; and
• Maintaining oversight of legal and regulatory
changes which affect the operation of the Group.
Conclusion
In summary, with exception for the matters explained
at the beginning of this report, I believe that the
governance arrangements operated by the Group
align with the Code’s requirements and have enabled
the Board to exercise effective oversight of business
performance, regulatory requirements and delivery of
our customer proposition.
Signed on behalf of the Board:
G Burr
Gwyn Burr
Group Chair
25 February 2025
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 85
Membership and attendees
The members of the Board Audit Committee during
the year were:
The Committee is currently comprised of four
members, all of whom are independent non-
executive directors.
The Board is satisfied that the composition of the
Board Audit Committee includes non-executive
directors with recent, relevant financial experience
and sufficient understanding of the financial services
sector to provide appropriate challenge to
management. The relevant experience of the
members of the Board Audit Committee is set out in
the Board of Directors section.
In terms of good governance and to ensure holistic
oversight, I am also a member of the Board Risk
Committee (as are Denis Hall and Philip Moore).
Meetings
The Committee held five scheduled meetings during
2024 aligned to our financial calendar and reporting
dates. The attendance of members at these
meetings is set out in the Corporate Governance
Report.
The Committee also held private discussions during
the year with the external auditor Ernst & Young LLP
(EY), the Group Chief Financial Officer, the Group
Chief Risk Officer and the Group Chief Internal
Auditor, to provide an opportunity for any relevant
issues to be raised directly with Committee
members.
In addition to Committee members, others who
regularly attended meetings (by invitation) include
the Group Chief Executive, the Chair, the Group Chief
Financial Officer, the Group Secretary and General
Counsel, the Group Chief Risk Officer, the Head of
Compliance, the Group Chief Internal Auditor and
external audit representatives.
Role and responsibilities of the Committee
The responsibilities of the Committee are delegated
by the Board and are set out in its written terms of
reference which are available on our website at
skipton.co.uk/about-us/governance. These are in
line with the provisions of the Financial Reporting
Council’s (FRC) ‘Guidance on Audit Committees’
which was last updated in April 2016 and have
regard to the FRC’s Audit Committee and the
External Audit: Minimum Standard guide.
Dear Member,
On behalf of the Committee, I am pleased to
present this year’s Board Audit Committee Report,
which provides an overview of how we, as a
Committee, have discharged our responsibilities,
setting out the significant issues we have reviewed
and concluded on during the year.
The report focuses mainly on the following three
areas:
• the role and responsibilities of the Committee;
• the main activities of the Committee during the
year; and
• a review of the effectiveness of the Committee.
Iain Cummings,
Chair of the Board Audit Committee
Performance & Strategy Governance Financial Statements
Other Information
Iain Cummings
Denis Hall
Mark Lund
Philip Moore
Non-executive director (Chair)
Non-executive director
Non-executive director
Non-executive director
Skipton Group Annual Report & Accounts 2024 86
Our primary responsibilities are:
• to monitor the integrity of the Group’s financial
reporting process, specifically by reviewing,
challenging and recommending the Group’s
annual and interim financial statements to the
Board for approval and, reviewing and approving
any formal announcements relating to the
Group’s financial performance and reviewing and
challenging, as necessary. We also review the
appropriateness of our accounting policies and
the significant estimates and judgements in
relation to the financial statements;
• to review the effectiveness of the Group’s internal
controls, including financial controls and risk
management systems;
• to review the effectiveness and independence of
the Group Internal Audit and Compliance
Monitoring functions and the performance of the
Group Chief Internal Auditor. This includes
considering the adequacy of internal audit's
resources, its periodic audit plans, performance
against these plans, their material findings and
delivery of actions to address them;
• to provide advice to the Board on whether the
Annual Report & Accounts, taken as a whole, are
fair, balanced and understandable and provide the
information necessary for members to assess the
Group’s strategy, business model and
performance; and
• to provide oversight of the external audit process
by monitoring the relationship with the external
auditor, agreeing their remuneration and terms of
engagement, monitoring their performance,
objectivity and independence. We also review
their approach to our audit, their levels of
materiality and their reports.
The Committee’s Terms of Reference were reviewed
in October 2024. As part of the review, specific
responsibilities under the Model Risk Management
framework and external sustainability reporting were
added.
The minutes of the Board Audit Committee are
distributed to the Committee members following
each meeting and I, as Chair of the Committee,
provide a report to the next Board meeting on the key
matters considered after any recommendations
requiring full Board approval.
New guidance
In May 2023, the Financial Reporting Council (FRC)
published Audit Committees and the External Audit:
Minimum Standard (‘Minimum Standard’) which is
intended to enhance performance and ensure a
consistent approach across audit committees within
the FTSE350 in relation to their oversight
responsibilities for the external audit. During the year
we compared our existing practices to the
Minimum Standard and identified a small number of
enhancements to ensure that we meet or exceed all
of its requirements. These are already being
addressed and will be completed during 2025.
Activities of the Committee during the year
During 2024 our work fell under three main areas, in
line with our responsibilities, as follows:
a) Internal controls and risk
The Group recognises the importance of good
systems of internal control in the achievement of its
objectives and the safeguarding of its assets and the
interests of its members. Good internal controls also
facilitate the effectiveness and efficiency of
operations, help to ensure the reliability of internal
and external reporting and assist in compliance with
applicable laws and regulations.
The Group operates in a dynamic business
environment and, as a result, the risks it faces
change continually. Management is responsible for
designing the internal control framework to ensure
thorough and regular evaluation of the nature and
extent of risk, and the Group’s ability to react
accordingly. Management is also responsible for
implementing the Board’s policies on risk and
control, noting that all employees are responsible for
internal control as part of their individual objectives.
Further details of the Group’s risk management
practices are provided in the Risk Management
Report.
Through the Committee, the Group Internal Audit
function provides independent assurance to the
Board on the effectiveness of the internal control
framework. Group Internal Audit derives its authority
from the Board, through the Board Audit Committee,
and has unrestricted access to all Group records,
physical properties, and personnel as required for the
effective delivery of audit activity.
The information received and considered by the
Committee during 2024 provided assurance that
there were no significant control failings that would
lead to a material impact on the Group’s financial
statements.
Group Internal Audit is supported by external co-
source partners who provide specialist technical
support when required. The Group Chief Internal
Auditor reports to me and as a Committee we are
responsible for ensuring that Group Internal Audit
has adequate skills and resource levels that are
sufficient to provide the level of assurance required.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 87
The Committee is satisfied that, throughout 2024,
Group Internal Audit had an appropriate level of
resources in order to carry out its responsibilities
effectively and that it continues to do so.
The Board Audit Committee is also responsible for
approving the annual budget of Group Internal Audit
and for approving its annual plan of work. This is
prepared on a risk-based approach reflecting input
from management and the Committee.
We review reports produced by Group Internal Audit
that detail material findings, recommendations and
the status of management actions in
response. Group Internal Audit also verify the
completion of management actions using a risk-
based approach and updates the Committee on
progress. We monitor and assess the role and
effectiveness of the Group Internal Audit function in
the overall context of the Group’s risk management
systems. The Committee assesses the effectiveness
and independence of Group Internal Audit annually,
and this is reported to and discussed at a meeting of
the Committee.
During the year, key areas reviewed were as follows:
• the governance framework and key controls
around significant prudential and financial risk,
including capital and liquidity management;
• key programme and project management
controls for material projects in place to support
the delivery of business strategy;
• key controls around cyber security, operational
resilience and information technology;
• key controls to ensure regulatory compliance in
areas including model risk management,
Consumer Duty and responsible lending for
example; and
• a number of specific areas of internal control in
the Group’s subsidiaries, including key change
projects.
In line with good practice, the Committee requires an
external effectiveness review of the Group Internal
Audit function at least every five years, which
considers the effectiveness of the function against
Global Internal Audit Standards. The most recent
review took place in 2024 and the Committee
oversaw the selection of a suitable third party to
conduct this. We also received their report and
discussed it with the reviewer. The Committee were
pleased to note that Internal Audit ‘generally
conforms’ (the highest rating attainable) with the
Standards and compared favourably with peer
organisations. The Committee will now oversee
actions to address recommendations by the reviewer
which will enhance the effectiveness of our Group
Internal Audit function further.
The Committee also has oversight responsibility for
the Society’s Compliance Monitoring function that
provides second line assurance over conduct risk on
activities regulated by the FCA, as well as assurance
over financial crime and data protection. The
Compliance Monitoring Plan includes control
reviews, shorter focused reviews and customer
outcomes testing which includes, but is not limited
to, investment, pension, mortgage and protection
advice, credit management, complaint handling and
post-sale customer outcomes. Consideration is
given to Consumer Duty as part of all relevant
reviews and consumer duty specific reviews are also
included in the plan where relevant. The Compliance
Monitoring function’s six-monthly plan of work was
approved by the Committee and the outputs reported
to the Committee, together with progress updates on
management’s implementation of actions to address
the findings.
The Committee periodically reviews the use of the
confidential reporting channel in the Group and
conducted the annual review of the Whistleblowing
policy. Awareness of whistleblowing arrangements is
maintained through internal communication and is
covered as part of colleague induction and ongoing
development. The Committee also received updates
from the Director of Group Finance on tax matters
impacting the Group.
As part of the external audit process, the Society’s
auditor provides us with reports on the results of
their testing of the effectiveness of internal controls.
Other matters considered by the Committee during
the year include the following:
• government proposals for significant reforms to
UK audit and corporate governance;
• impacts of changes in the economic environment;
and
• impacts on the Group from fraud risks and related
preventative and detective controls.
b) Financial reporting
The Committee considered the financial information
published in the Group’s annual and interim financial
statements and the accounting policies adopted by
the Group, presentation and disclosure of financial
information and, in particular, the key estimates and
judgements made by management in preparing the
financial statements. The Directors are responsible
for preparing the Annual Report & Accounts.
At the request of the Board, we considered whether
the 2024 Annual Report & Accounts were fair,
balanced and understandable and whether they
provided the necessary information for members to
assess the Group’s position and performance,
business model and strategy.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 88
This assessment included:
• review of reports from management on
significant accounting matters and judgements
and consideration of whether these treatments
were appropriate;
• consideration with management of leading
reporting practices and recommendations,
including those published by the FRC and major
audit firms;
• consideration of the main events during the
financial year and how these are reported in our
financial statements;
• review of the alternative performance measure of
underlying profit before tax (defined in the
Strategic Report), to ensure compliance with our
policy on these metrics and fair presentation;
• a thorough review was undertaken by the
Financial Reporting team to ensure there was
appropriate supporting evidence for the content
of the Annual Report & Accounts;
• obtaining confirmation that all key control
procedures over financial reporting had been
completed at the Society and its subsidiaries;
• obtaining confirmation of reviews by the
Financial Reporting team and the Group Executive
Committee, including details of matters raised
and their conclusions;
• reviewing drafts of the financial statements and
discussion of key matters; and
• consideration by the Committee of comments
raised by our external auditors and actions taken
by management to address these.
The Committee is satisfied that, taken as a whole,
the 2024 Annual Report & Accounts are fair,
balanced and understandable and include the
necessary information as set out above. The
Committee has confirmed this to the Board, whose
statement in this regard is set out in the Directors’
Report. We paid particular attention to matters we
considered to be important by virtue of their impact
on the Group’s results, and particularly those which
involved a high level of complexity, judgement or
estimation by the Board.
The key areas of estimate and judgement that we
considered in reviewing the 2024 Annual Report &
Accounts are set out below:
Performance & Strategy Governance Financial Statements
Other Information
Significant Matter
Committee Action Taken
Going concern and
longer
-term
viability review
The Committee reviewed the adoption of the going concern assumption for the
Interim Accounts and the Annual Accounts, adopting the same comprehensive
approach for both reporting periods. This involved rigorous consideration, based on
reports produced by key risk functions around the business as requested by the
Committee, of our current and projected liquidity, capital and funding positions,
together with the Group’s principal risks. Risks considered include those arising from
business activities (for example credit risk, liquidity risk, operational risk and conduct
risk), from market changes, from social, economic and political factors (such as the
impact of the new Labour government in the UK and Donald Trump’s second term as
US President, on
-going geopolitical conflicts and external pressures on oil prices) and
from climate change. Potential stress scenarios were also considered. Based on this
review, we concluded that the adoption of the going concern assumption to prepare
the financial statements remained appropriate.
The Committee reviewed the statement on the longer
-
term viability of the Group in the
Directors’ Report, together with papers produced by management and key risk
functions in support of this statement. This included consideration of the Group’s
latest corporate plans, and impact on the Group’s liquidity, capital and funding
positions, and the impact of risks from business activities, from market changes, from
social, economic and political factors, from climate change and from stress
scenarios. The stress scenarios considered included scenarios that could cause the
Group to fail; the Committee concluded that the likelihood of any such scenario
materialising in a way that would threaten the Group’s longer
-term viability is
sufficiently low. Based on this analysis, the viability statement was recommended to,
and approved by, the Board.
Skipton Group Annual Report & Accounts 2024 89
Significant Matter
Committee Action Taken
Impairment of
financial assets
The Committee has monitored loan impairment provisions, taking account of the
requirements of IFRS 9 Financial Instruments. We have reviewed the appropriateness
of critical judgements made by management, including the identification of potential
impairment, the definition of default and the determination of a significant increase in
credit risk.
We have considered the impact of key assumptions within the Group’s loan
impairment models (such as house prices, unemployment and other forward
-looking
economic indicators within defined economic scenarios) on the level of provisions
made and the relevant disclosure in the Accounts. The Group has, during the year,
updated its economic scenarios and the weightings attached to each scenario; this
includes revisions to reflect changes in the external environment, the key driver of
movement in residential impairment during the period being changes to Bank of
England Base Rate, HPI growth and unemployment. We noted that, in particular,
revision of the Group’s view of future interest rates has resulted in a decrease in the
Group’s loan impairment provisions; this is reflected both in the modelled impairment
amounts and in the post model adjustments.
With respect to climate
-related risks, the results of scenario analysis performed by
management during the year have not materially impacted the Group’s loan
impairment provisions.
We recognise that the future impact of climate
-related risks on credit risk is uncertain
and we will continue to monitor developments in future periods.
We have examined and challenged the assumptions adopted and have scrutinised
reports produced by management. We are satisfied with the models used during the
year to calculate loan impairment provisions for both the residential and commercial
mortgage portfolios, together with the post model adjustments that have been
applied.
The Committee has also monitored the level of impairment held against treasury
assets under IFRS 9, including scrutinising reports produced by
the Asset & Liability
Management function. We consider the level of impairment held a
gainst these assets
to be appropriate.
Revenue
recognition within
the Estate Agency
division
The Committee has considered the risk relating to the recognition of revenue within
the Estate Agency division, as described by the external auditor within the
Independent Auditor’s Report. The Committee reviewed reports prepared by
management and by EY regarding the effectiveness of key controls over the revenue
recognition process. The Committee also considered the results of external audit
testing performed in this area, including testing performed in previous years, which
has not identified any evidence of material misstatement or management override in
this respect.
The Committee is comfortable that this matter has been appropriately considered and
disclosed within these Accounts.
Defined benefit
pension liability
The Group manages three funded defined benefit pension schemes, as presented in
Note 34
to the Accounts.
The Committee has examined and challenged the pension scheme assumptions
adopted in these Accounts and is satisfied that these are reasonable and appropriate;
this included consideration, in particular, of scheme asset valuations, given the
volatility of market pricing during the year.
Impairment of
estate agency right-
of
-use assets
The Committee has considered the risk relating to the impairment of estate agency
right
-of-use assets. The Committee reviewed assessments prepared by management
and the results of impairment testing performed where indicators of impairment exist.
The Committee is satisfied that the level of provision held against right
-of-use assets
is appropriate.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 90
Significant Matter
Committee Action Taken
Fair valuation of
the equity release
portfolio
The Group holds an equity release portfolio which is closed to new business. The
Group has internally devised a fair valuation model, using inputs including mortality
rates, voluntary prepayment rates, estimates of future RPI and a house price index,
and associated volatility, to predict future cash flows on the portfolio. As the valuation
technique uses some inputs that are not based on observable market data, judgement
is required in determining appropriate assumptions.
The Committee has reviewed the assumptions within the equity release fair valuation
model and scrutinised supporting papers prepared by management. Taking into
account the specific characteristics of this portfolio, and also general macro
-
economic indicators, the Committee considers that the inputs and assumptions are
appropriate, and therefore that the valuation of the equity release portfolio is
appropriate.
The Group hedges the interest rate and inflation risk arising from its equity release
portfolio through the use of derivatives. These derivatives are valued using discounted
cash flow models which include estimated redemption profiles and, due to the long
-
dated nature of these derivatives, any changes to estimates or assumptions can have
a significant effect on the valuation of the derivatives. As the underlying mortgage
portfolio is not held at amortised cost under IFRS 9, hedge accounting cannot be
applied. Both the equity release portfolio and the swaps are held at fair value through
profit and loss.
There is some natural offsetting between the changes in value of the portfolio and the
derivatives, but this is not perfect, partly due to the different discounting requirements.
The Committee has reviewed papers prepared by management that support the
assumptions used and which outline the control framework management has in
place; the Committee is satisfied that the amounts recognised in the Income
Statement are fairly stated and that the valuations of these derivatives are
appropriate. Given the sensitivity of the fair value to certain key assumptions, the
Committee also reviewed those key sensitivities and is satisfied that these are fairly
presented in
Note 1v) to the Accounts.
Revenue recognition
relating to effective
interest rate
accounting
Interest income on the Group’s mortgages is measured under the effective interest
rate method, as explained in
Note 1f) to the Accounts. This method includes an
estimation of mortgage product lives. The Committee reviewed the reports prepared
by management to support these estimates and is satisfied with the conclusions
reached in this respect.
Derivatives and
hedge accounting
The Group uses fair value and cash flow hedge accounting to manage its interest rate
and foreign currency risk.
The Committee has examined and challenged the valuation of derivative financial
instruments and is satisfied that these are reasonable and appropriate.
Group conduct and
regulatory
provisions
A new risk has been recognised by the external auditor in response to the conduct and
regulatory compliance matters at Connells Limited and Skipton International Limited.
The Committee is comfortable that these matters have been appropriately addressed.
Loan impairments
relating to Skipton
International Limited
A new risk has been recognised by the external auditor in respect of impairment
relating to the SIL loan book. This was the result of more granular Group scoping and
risk assessment performed under the revised international standard on auditing, ISA
600 (Special considerations
– Audits of Group Financial Statements (including the
work of component auditors)). The Committee has considered this risk and is
satisfied that the level of impairment held relating to SIL loans is appropriate.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 91
Other matters
We considered matters raised during the statutory
external audit and the half year independent review
and, through discussion with senior management of
the business and the external auditor, concluded that
there were no adjustments required that were
material to the financial statements as presented.
c) External auditor
The Committee assesses the effectiveness and
independence of the external auditor annually
following completion of their year-end audit, and this
is reported to and discussed at a meeting of the
Committee shortly thereafter. This assessment
covered the external audit of the previous Annual
Report & Accounts, and included consideration of
matters such as:
• any risks to audit quality that the external auditor
identified;
• the key controls that the external auditor relied on
to address any identified risks to audit quality,
such as appropriate audit methodologies, training
and quality control policies and procedures;
• the findings from internal and external
inspections of the external audit and the audit
firm;
• whether the original audit plan was met;
• openness and quality of communication between
the external auditor and senior management;
• the skills and experience of the audit team and
their understanding of the business;
• whether an appropriate degree of challenge and
professional scepticism was applied by the
external auditor; and
• the proposed strategy to be used in the next audit,
including the proposed level of materiality to be
used.
The Committee considered the results of this review
and concluded that the external auditor had
performed an audit of good quality and that they
were sufficiently independent.
During the year, the Committee also oversaw the
transition to our new audit engagement partner. A
change was required to comply with the
independence rules and having overseen the
selection of our new partner in 2023, we monitored
the transition this year to ensure that there was no
adverse impact on our audit.
The Committee also reviewed and reaffirmed our
policy on non-audit services which can be provided
by our external auditors. The Committee reviews
fees paid to the Group’s auditor regularly and is
satisfied that the level of non-audit fees paid to our
external auditors complies with this policy and does
not compromise their independence. Details of the
fees paid to EY for audit and non-audit services are
set out in Note 7 to the Accounts; non-audit fees
during the year represented 5.4% of total EY audit
fees for the Group (2023: 8.6%). To further maintain
auditor independence, the Group has processes in
place regarding the employment of former
employees of the auditor.
EY were appointed as external auditor following a
competitive tender process and their appointment
was approved by members at the AGM on 29 April
2019. EY were reappointed as the Society’s external
auditor at the 2023 AGM and the Audit Committee
has recommended to the Board that they be
approved for reappointment as external auditor at
the 2024 AGM. The Committee also reviewed
advisory and consulting fees paid to other firms
which could be suitable auditors of the Group. This is
done periodically to ensure that if a change of
auditor is required, we have appropriate options.
Effectiveness of the Board Audit Committee
The effectiveness of the Committee was assessed at
the end of 2024 as part of the annual Board
effectiveness review and it was concluded that we
operated effectively during the year.
Committee members undertake relevant training as
part of their ongoing development and, periodically,
the Committee as a whole receives training on
current topics such as sector challenges, regulatory
developments, conduct risk issues and financial
reporting ‘hot topics’ to ensure we remain effective in
our role.
Iain Cummings
Chair of the Board Audit Committee
25 February 2025
Performance & Strategy Governance Financial Statements
Other Information
I Cummings
Skipton Group Annual Report & Accounts 2024 93
Members of the Board Change Committee
The Committee is comprised of two members,
myself and Iain Cummings, both of whom are
independent non-executive directors with significant
change management experience. I also serve as a
member of the Board Risk, Board Nominations and
Board Remuneration Committees and Iain serves as
Chair of the Board Audit Committee and as a
member of the Board Risk and Board Nominations
Committees. These arrangements ensure good
interaction between the various committees of the
Board.
The Committee was established by the Board during
2023 to oversee and govern the increasing scale and
complexity of the Group’s on-going change strategy.
The Committee held four meetings during 2024.
Attendance of its members at those meetings is set
out in the Corporate Governance Report.
In addition to Committee members, other attendees
(by invitation) included the Group Chief Executive,
the Group Chief Information Officer, the Group Chief
Financial Officer, the CEO Money and the Group
Secretary and General Counsel. The Committee
received regular reports directly from members of
the senior management team responsible for
delivering the Change Portfolio including the
Transformation Programme Director, Director of
Enterprise Architecture & Technology Strategy and
Head of Change.
Role and Responsibilities of the Committee
The Committee seeks to ensure change is delivered
as efficiently and effectively as possible and that the
impact on members, customers and colleagues is
considered.
The responsibilities of the Committee are delegated
by the Board and are set out in its written terms of
reference which are available on our website at
skipton.co.uk/about-us/governance.
The Committee’s role is to provide guidance,
challenge and advice to the Board, helping to shape
how change is delivered across the Group. The
Change Portfolio is the programmes of work,
systems and controls through which changes to our
business are prioritised, coordinated and
implemented. The Committee’s primary
responsibilities are:
• To oversee the alignment of the Change Portfolio
with the technology and people strategies and be
satisfied that the Change Portfolio supports the
Group’s wider strategic vision;
• To oversee the Change Portfolio agenda and
methodology, including the capacity to resource
and absorb change;
• Review of significant change proposals before
presentation to the Board for approval;
Dear Member,
On behalf of the Board Change Committee, I am
pleased to present the Committee’s annual report
covering the role of the Committee and how it has
discharged its responsibilities during 2024.
Heather Jackson,
Chair of the Board Change Committee
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 94
• Review of assurance reports and management
actions to address any findings;
• Scanning the horizon for future industry trends
and opportunities in technology that could impact
or benefit the Group or the implementation of its
strategy; and
• To oversee and challenge change initiatives
including:
• progress and delivery, including risk
management, benefits and outcomes;
• financial management, including spend and
benefits delivery;
• the overall approach, including ‘lessons
learned’ when initiatives are completed;
• adequacy of resource, including appropriate
levels of resourcing roles, responsibilities
and skills; and
• appropriate use of data.
Activities of the Committee
Throughout 2024 the Committee has focused on:
• The alignment and delivery of the Change
Portfolio to the Skipton Group Corporate Plan,
including the forward plans, outcomes delivered
and investment required;
• Promoting standardisation of approaches to
change delivery; reviewing the effectiveness and
value delivery of these; and optimising across the
Group where appropriate;
• Reviewing the progress being made to deliver the
Society’s Digital Transformation Programme
including the benefits and impact from a member
perspective;
• Fostering enhanced monitoring and evaluation of
Change Programmes including member and
colleague impacts, resourcing and timely delivery
of the intended benefits;
• Understanding the recruitment and training
strategies taken to ensure that knowledge and
skills supporting change continue to be fit for the
present and future;
• Overseeing the use of new technologies - using
cloud to provide greater flexibility in technology.
Enabling our customer-facing colleagues to use
an AI tool providing better, more accurate data
quickly when handling customer queries; and
• Reviewing the Data Strategy for the Skipton Group
with focus on opportunities for our members and
colleagues.
Looking forward
In the course of 2025, the work of the Committee will
continue to evolve and will include:
• Considering the change and technology required
to support the aims of the Group’s Corporate Plan
(including looking at how data is used, cyber and
cyber security, and appropriate further use of
Artificial Intelligence (AI) in the future);
• Reviewing the member and colleague impact
from change alongside oversight of delivery, risk,
financial management and implementation of
change across the Group;
• Reviewing of the resourcing strategies for change
across the Skipton Group and fostering the
sharing of Group skills and experiences to best
effect; and
• Continuing to explore new industry and
technology developments relevant to the work of
the Committee and understanding how those
developments can assist how we better serve our
members in the future, including helping
members to understand and make the most of
our developing services.
Conclusion
On behalf of the Committee, I hope this report gives
you a flavour of the work of the Committee and the
importance of its future role.
Heather Jackson
Chair of the Board Change Committee
25 February 2025
Performance & Strategy Governance Financial Statements
Other Information
H Jackson
Skipton Group Annual Report & Accounts 2024 96
In addition to closely monitoring the economic
challenges, the Group businesses have maintained
focus on the full range of risks we face.
We continue to make progress in embedding how
the impact of climate change on our members and
business is managed and mitigated. Through our
Stress Testing Steering Committee, and our Climate
Change Risk Forum (CCRF), we assess the risks
posed by climate change and develop action plans to
mitigate these risks. This is an area where we will
continue to refine and enhance our approach as new
data and best practice emerges.
Committee focus
In line with the risk management framework, the
Committee has, during the year, focused on:
• Liquidity management, to ensure that the Group
maintains a prudent liquidity position and is well
placed to respond to the uncertain environment,
whilst maintaining our longer-term funding
strategy to diversify our funding base;
• Capital and MREL, to ensure that the Group
maintains and forecasts sufficient capital
resources to support our corporate plan, and
potentially respond to a severe economic stress.
We took strides to enhance our capital
management framework in line with industry
standards;
• Interest rate risk, to ensure that the Group has an
effective balance sheet strategy and hedging
arrangements in place to manage interest rate
risk;
• Credit performance, to ensure that the Group
appropriately evaluates and balances risk and
reward in a highly competitive mortgage market,
which is particularly important during a period of
economic uncertainty;
• Climate risk, to ensure that the Society is
developing an appropriate strategy and
framework to enable it and its Group businesses
to respond to the risks arising and ensure that
these are effectively governed;
• Model risk management, to ensure that statistical
models used to support business decision-
making continue to be compliant with regulations,
and are accurate and fit for purpose;
• Operational resilience, to ensure that the Society
and its Group businesses remain able to provide a
reliable and resilient service to members and
customers and can recover in a swift and
organised manner in the event of an operational
failure;
• Cyber threats, to ensure that the Group has an
appropriate risk framework and continuous
improvement plan in place to reduce the
likelihood of a successful attack. We remain alert
to the risk arising from geopolitical tensions and
continue to develop our monitoring regime and
defence systems; and
Dear Member,
As the Chair of the Board Risk Committee, I am
pleased to present the 2024 Risk Management
Report. This report explains the risk management
practices we operate at Skipton, and what we
believe to be the principal risks facing the Society
and its Group businesses (collectively referred to
as the Group).
During 2024 some of the challenges seen in 2023
have begun to ease, with inflation significantly
reduced compared to a year ago and the cost-of-
living crisis softening for some. Our focus has
been, and continues to be, on supporting our
members, customers and colleagues, whilst
growing our business safely.
Denis Hall,
Chair of the Board Risk Committee
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 97
• Conduct risk, to ensure training and competence
standards are appropriate, that members and
customers receive good outcomes at fair value
and that documentation standards substantiate
this. Having successfully implemented the new
Consumer Duty regulation, this is now being
embedded across relevant business areas to
strengthen the management of conduct risk.
To assist the Committee’s deliberations, it receives
regular reports from the Group Chief Risk Officer.
These reports provide clarity on the key and
emerging risks faced by the Group and direct the
Committee’s attention to those matters which the
Risk Officer believes warrant further consideration,
enabling challenge of first line management on the
actions being taken to mitigate the risks.
Risk overview
Day-to-day operation of the business naturally
exposes the Group to a range of potential risks. To
limit the level of risk accepted by the Group in the
normal course of business, the Board has
established a risk appetite. This is reviewed, at least
annually, in the context of the prevailing environment
in which the Group is operating in.
The risk appetite covers all key risks including
liquidity risk, capital risk, interest rate risk and
operational risk. Central to operating within this
appetite is a management culture which promotes
awareness of actual and potential risks and an
understanding of their impact on the portfolio should
they crystallise.
Governance structure
To enable appropriate focus on risk matters, the
Board has delegated oversight of risk management
to the Board Risk Committee, although ultimate
responsibility for risk management continues to
reside with the Board which receives regular
reporting to support its oversight of risk.
The Board Risk Committee is responsible for
considering and recommending the Group’s risk
appetite and capital adequacy and liquidity
management policies to the Board. It is also
responsible for ensuring that the Group maintains an
effective risk governance structure to ensure that
risks across the Group are identified, reviewed,
managed, and reported on.
The Board Risk Committee is supported by an
Executive Risk Committee which is chaired by the
Group Chief Risk Officer. This is the primary
Executive body which meets regularly to oversee and
monitor the key risks across the Group. The
Executive Risk Committee oversees several sub-
committees which focus on specific risks including
credit risk, conduct risk and operational risk.
At a subsidiary level, Connells Limited and Skipton
International Ltd both operate their own Audit & Risk
Committees which report directly to their respective
boards. The Group Chief Risk Officer maintains
oversight of all subsidiary firms in relation to risk
management and control.
Membership and attendees
The members of the Board Risk Committee during
the year were:
Denis Hall Non-executive director (Chair)
Iain Cummings Non-executive director
Heather Jackson Non-executive director
Philip Moore* Non-executive director
* Philip Moore is not standing for re-election in 2025
Group Risk management framework
The Group has a formal structure for identifying and
managing risks throughout the business. This
framework is designed to enable delivery of the
corporate plan in line with the Board’s overall risk
appetite and is based upon the best practice ‘three
lines of defence’ model which operates as follows:
The ‘Three Lines of Defence’ model
Line management
Group Risk function
Group Internal Audit
The first line of defence is line management
within the businesses who, through the
implementation of the organisation’s risk
framework, identify, assess, and manage risk.
The second line of defence is our Group Risk
function and risk teams in the businesses. These
teams challenge, monitor, guide and support the
businesses in managing their risk exposure. The
Board Risk Committee Chair is responsible for
maintaining the independence of the second line
of defence to ensure there are no obstacles to its
independent challenge of the first line.
The third line of defence, provided by Group
Internal Audit, is designed to provide risk-based
independent assurance to the Board (through the
Board Audit Committee) of the adequacy and
effectiveness of control systems operating within
the first and second lines in identifying and
managing risk.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 98
The Board Risk Committee, in conjunction with the
Board Audit Committee, oversees the effective
operation of our ‘three lines of defence’ model. The
principal risks and uncertainties faced by the Group,
which are managed within the framework described
above, are set out later in this report.
Risk Environment
The Group is predominantly active in the UK and, to a
large extent, exposed to the UK property market.
Therefore, the general UK macro-economic
environment is a key factor in determining the
success of the Group. The main economic drivers
that impact the risk profile of the Group include:
• interest rates;
• inflation;
• employment; and
• the housing market (volume of transactions and
house prices)
Alongside these prudential risk drivers, the
management of conduct and operational risk is also
key to the ongoing success of the Group. Central to
managing these risks is maintenance of a robust
product governance framework, to ensure that we
develop and market compliant and fair products and
services designed to meet the needs of our target
market. We regularly review our existing processes
and products to ensure we continue to provide good
customer outcomes and fair value. At point of
delivery, the competency and oversight of our
colleagues to ensure we provide good outcomes for
our customers is then essential to maintain the
confidence and trust upon which our brand is based.
Despite some ongoing uncertainty with the
economic and political environment in 2024,
including elevated inflation and interest rates, the
Society’s and SIL’s mortgage books remained
resilient and are not showing any material signs of
stress. However, we remain vigilant for any credit
deterioration in the year ahead and are ready to
support any member who may be concerned about
facing financial difficulty. We partner with external
agencies including the Citizens Advice Bureau and
Payplan who provide free debt advice to the public.
We were amongst the first Banks and Building
Societies to sign up to the new Mortgage Charter
when the Government introduced this in June 2023
and we continue to shape forbearance solutions with
those customers who need support.
Following the annual rate of inflation reaching a 41-
year high of 11.1% in October 2022, it continued to
reduced gradually during 2024 and fell to 2.5% by
December. The Bank of England has also reduced
bank base rate, from 5.25% in August 2023 to 4.75%
at the year end, and market analysts believe it will
reduce further during 2025. Despite bank base rate
and mortgage rates remaining elevated,
unemployment has remained broadly stable during
the year and is currently 4.4%, below official
estimates from a year ago. Our latest projections
forecast that unemployment will rise slowly through
2025 before peaking in 2026, which has been
reflected in our forward-looking loan impairment
provisions held in our balance sheet.
The housing market in 2024 compared favourably to
2023 although remained slightly subdued in some
segments due to the General Election taking place in
July. That said, key House Price Indices report that
house prices have increased marginally during the
year. Through our Estate Agency division, we are
carefully monitoring the housing market and we
expect 2025 to be stronger.
Notwithstanding interest rates remaining elevated,
mortgage arrears levels remained under control
throughout 2024, reflective of relatively stable levels
of unemployment. We monitor our credit risk metrics
monthly, and thus far have not seen any material
number of mortgage in distress. However, we remain
alive to the impact of increased mortgage interest
rates and do expect to see some members
encounter difficulties with mortgage affordability,
and potentially for arrears volumes to increase
during 2025.
A key driver of profit for the Society and SIL is the
margin earned on mortgages offered to customers.
During 2024 there continued to be significant
competition in the mortgage market. Despite this,
our margin remained strong. We anticipate a highly
competitive mortgage market continuing throughout
2025.
The results of the Connells Group are principally
driven by the volume of UK property transactions, in
particular second-hand property sales. This market is
heavily influenced by consumer confidence, driven by
the general state of the economy, level of
unemployment and interest rates, together with the
availability of mortgages, particularly for first-time
buyers. Any slowdown in the housing market puts
pressure on Connells’ group income levels, but the
business is partially protected against the
performance of its core business through its own
diversification into complementary businesses such
as lettings and property asset management. As a
result of the improved property market compared to
2023, Connells Group delivered an above-plan profit
for the year.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 99
Principal Risks and Uncertainties
The principal risks and uncertainties presented on
the following pages are those that are inherent to the
Group’s business model and strategy, as well as the
economic environment within which the Group
operates. These risks are identified by the Group
Chief Risk Officer, discussed at the Executive and
Board Risk Committees, and then presented to the
Board for further consideration and agreement, as
appropriate.
The Risk Committees are also alert to the need to be
alert to new, emerging risks and new, emerging
regulations or corporate governance standards.
These are considered at each meeting of the
Committee and by the Group Chief Risk Officer on a
day-to-day basis. A watching brief is then
maintained, as appropriate, by both first and second
line teams to determine whether the key risk profiles
of any Group business need to be updated to
incorporate the potential new risks. Our reporting
process provides the Board and Board Risk
Committee with continuous assessment of the risk
environment across the Group and allows it to
challenge management on its mitigation plans in a
timely manner.
Over the following pages, the prudential risks and
key mitigants are set out.
Business risk
Risk definition
The risk of failing to formulate and deliver the strategy and/or a lack of response to
changes in the external environment affecting the sustainability of the business.
Risk mitigation and
management
The Group Executive Committee and the Boards of subsidiary businesses are
responsible for ensuring that business risk is effectively managed.
Potential sources of business risk include revenue volatility due to factors such as
macro
-economic and geopolitical conditions, inflexible cost bases, structural
inefficiencies, or new market entrants with lower cost structures.
Delay or inability to respond to changing customer behaviours is a risk, as customers’
preferred means of accessing financial services evolves in a rapidly changing digital
environment. The Group addresses these risks within its Corporate Plan which is
approved by the Board along with the Group’s key strategies. The Board Risk
Committee is also provided with the results of stress and scenario tests to assess the
potential impact on the Group of a stressed business environment, such as a severe
economic downturn. This enables the Committee to monitor the risk impact on
business strategies and to determine whether changes to these may be required to
protect the sustainability of the Group. In line with regulatory requirements the Group
maintains recovery plans detailing the steps it would take to sustain itself through
such severe business stresses.
Capital and MREL risk
Risk definition
The risk of not maintaining sufficient capital and MREL (minimum requirement for
own funds and eligible liabilities) levels to support day to day operations, withstand
stressed economic conditions and meet regulatory requirements.
Risk mitigation and
management
The Internal Capital Adequacy Assessment Process (ICAAP) is conducted to assess
the Society’s and the Prudential Group’s current and projected capital and MREL
requirements to mitigate the current risks in the business and any future risks arising
from the Corporate Plan.
The ICAAP addresses all the Group’s material risks and includes Board
-approved
stress scenarios which are intended, as a minimum, to meet regulatory requirements.
The ICAAP is approved by the Board and reviewed by the PRA when setting the total
capital requirements. The Board also receives regular reporting on capital adequacy
levels.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 100
Capital and MREL risk (continued)
Risk mitigation and
management
(continued)
The Group currently adopts the following approaches to calculating its Pillar 1
minimum capital requirements:
• Internal Rating Based (IRB) approach for residential mortgage exposures of the
Society;
• IRB approach for exposures relating to investments in subsidiaries outside the
regulatory group and non-credit obligation assets (property, plant and equipment,
fair value adjustments for hedged risk and cash);
• Standardised approach for other lending exposures;
• Standardised approach for treasury portfolios; and
• Standardised approach for operational risk and market risk.
MREL is the minimum amount of own funds (capital resources) and eligible liabilities
that must be satisfied to provide for the recapitalisation of the Prudential Group under
a gone concern scenario. The ICAAP sets out our expectations of MREL requirements
over the Corporate Plan horizon, and how we expect to meet those requirements. We
also consider the impact of emerging capital regulation over the same period,
including the reforms to the Basel III regulation, and how we expect to meet those new
requirements. The capital and MREL actual positions versus the requirements are
reported to the Board on a monthly basis.
Climate risk
Risk definition
The risk of the commercial impact that climate and environmental changes present to
our business model.
Risk mitigation and
management
Climate change, considered as the combination of extreme weather events and
longer
-
term climate modifications, presents both risks and opportunities for the Group
and our customers.
Climate risks arise from both the potential impacts of climate change (‘physical risks’)
as well as societal responses to climate change (‘transition risks’). Climate risk can
therefore manifest in various ways including the impact on traditional risk categories
such as credit risk, operational risk and market risk.
The Group’s Executive Committee and the Boards of subsidiary firms are responsible
for the proactive management of the financial and operational risks arising from
climate change and the strategy to mitigate these risks.
Our approach to managing the risks from climate change is summarised as follows:
•
Identifying and assessing the risks from climate change:
We regularly review
climate-related risks to which the Group is exposed. The most significant risks are
assessed further as part of our annual climate risk stress and scenario testing. The
analysis is primarily focused on a quantitative assessment of the impact of climate
change on our residential mortgage portfolio;
•
Managing and monitoring the risks from climate change:
The responsibilities for
the management of climate risk are defined within our Climate Change Risk
Management Framework. The Framework is integrated within our wider
governance processes and the three lines of defence approach to risk
management. The Group has continued to embed the management of climate risk
across the businesses during 2024. This includes producing our management
information to provide regular monitoring of climate risk exposures across a range
of business areas and reviewing our mortgage new lending controls with respect to
flood risk and coastal erosion at least annually.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 101
Conduct risk
Risk definition
The risk of delivering poor or inappropriate outcomes for customers.
Risk mitigation and
management
Any failure to develop appropriate internal processes and controls to deliver suitable
mortgage, pensions and investment advice to customers to meet their financial
needs, and to comply with other conduct requirements, could lead to poor customer
outcomes, customer dissatisfaction and potential regulatory criticism.
Ensuring fair value and good customer outcomes across our channels, products and
services is at the heart of what we do; we consider the recently introduced Consumer
Duty to be good for the sector. An Executive sponsored programme was in place to
ensure we met the Consumer Duty implementation timeline of July 2024 for closed
products and services (having previously met the timeline for existing products and
services by July 2023). Our focus is now on embedding Consumer Duty and on
continuing to deliver good outcomes for our members and customers. Our three lines
of defence provide ongoing monitoring and assurance over processes and controls.
Credit risk
Risk definition
The risk of financial losses or adverse impacts on the business’s performance and
solvency due to the failure of its borrowers or counterparties to meet their contractual
obligations.
Risk mitigation and
management
The Group faces credit risks from its lending to:
• Individual customers (retail mortgages);
• Businesses through historical commercial lending and ongoing debt factoring and
invoice discounting; and
• Wholesale counterparties for the purposes of liquidity management.
Retail and commercial credit exposures are managed by a team of experienced
professionals, with oversight provided by the Retail Credit Committee.
The Group has established comprehensive risk management processes in
accordance with the Board’s credit risk appetite which defines
a number of limits
regarding concentration risk as well as customer and collateral credit quality to which
all our mortgage lending activity must adhere.
The credit decisioning process applies credit scoring, affordability assessment and
lending policy criteria which is supported by manual underwriting. All aspects of the
automated credit decisioning process are subject to regular development, as well as
model governance. The lending quality and controls are managed within risk
framework requirements and all lending is in line with the Board’s risk appetite.
The Group’s collections and recoveries functions provide a responsive and effective
arrears management process. We seek to engage in early communication with
borrowers
experiencing difficulty in meeting their repayments, to obtain their
commitment to maintaining or re
-establishing a regular payment plan. We consider
forbearance options on a case
-by-case basis in line with industry guidance and best
practice. The impact of any such forbearance is recognised within our provisioning
policy.
The legacy commercial mortgage portfolio which is UK
-based, was closed to new
lending in November 2008.
SIL has a residential and buy
-to-
let mortgage portfolio, secured against property in the
Channel Islands and a buy
-to-let portfolio in the UK. Credit risk on these portfolios is
managed locally, supported by oversight from the Retail Credit Committee. These
portfolios are managed tightly against a
low risk appetite, with consequent low levels
of arrears and losses.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 102
Liquidity risk
Risk definition
The risk of being unable to meet current and future financial obligations as they fall
due or only able to do so at excessive cost.
Risk mitigation and
management
The liquidity strategy is to ensure liquidity is held in sufficient quantity and diversity to
support the Corporate Plan and to meet the Board’s Liquidity Risk Appetite and
regulatory requirements. There is flexibility within the plan, supported by the strong
governance around liquidity management, to adapt to changing circumstances. The
Group also has access to adequate levels of contingent liquidity.
The Internal Liquidity Adequacy Assessment Process (ILAAP) is conducted at least
annually for Board approval, to assess the Group’s current and projected liquidity
requirements to mitigate the current risks in the business and any future risks arising
from the Corporate Plan. The ILAAP confirms that we are forecast to maintain
adequate liquidity above our Liquidity Risk Appetite.
There are risks to future funding conditions given the market
-wide refinancing of the
government established TFSME (Term Funding Scheme), including collateral
management risk, geopolitical risks and the risk of increased competition for retail
deposits. Early warning indicators are therefore regularly assessed to ensure liquidity
is maintained at appropriate levels and reported to the Asset & Liability Committee
and the Board
on a monthly basis.
Over the life of the Corporate Plan, there are increasingly larger retail and wholesale
maturities, resulting in a more dynamic liquidity requirement and heightened risk. To
mitigate this, we may carry excess liquidity at times as the Group pre
-funds ahead of
large maturities.
Interest rate risk
Risk definition
The risk of exposure of the Group’s financial condition to adverse movements in
market interest rates.
Risk mitigation and
management
Interest rate risk arises from mortgages, savings and other financial products we
offer. This risk is managed
through the use of appropriate financial instruments,
including derivatives used to hedge exposures, with established risk limits, reporting
lines, mandates and other control procedures.
Other interest rate risk exposures, such as basis risk (the risk of loss arising from
changes in the relationship between market rates), and net margin duration risk (the
risk that the cost of funding increases before we
are able to re-price our mortgages)
are regularly reported to the Asset & Liability Committee, the Board Risk Committee
and the Board. These risks are also managed within established risk limits and other
control procedures.
The Group’s forecasts and plans take account of the risk of interest rate changes and
are prepared and stressed accordingly, in line with PRA guidance.
Wholesale Credit risk
Risk definition
The risk of unexpected credit losses resulting from a counterparty default.
Risk mitigation and
management
The Group Wholesale Credit Committee manages treasury credit exposures, with
oversight provided by the Asset & Liability Committee.
Wholesale credit risk is the counterparty credit risk resulting for transactions
undertaken by Group Treasury, which is primarily from the
high quality
liquidity held by
the Group to mitigate liquidity risk. It also arises from counterparty exposures where
the Group has transacted derivatives to hedge interest rate risk as well as secured
funding transactions.
Counterparty credit risk is managed across the Group within limits, on size and
duration of exposure, defined within the Treasury Policy, which is approved at least
annually by the Asset & Liability Committee and the Board Risk Committee. The
posting of collateral is also used to mitigate counterparty credit risk in respect of
derivatives.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 103
Model risk
Risk definition
The risk of financial loss or a poor strategic or business decision as a result of errors,
weaknesses or failures in the design or use of a model.
Risk mitigation and
management
The Model Risk Committee (MRC) provides a formal forum for monitoring and
managing model risk in the Group. MRC manages model risk with reference to a
defined Model Risk Appetite and Governance Policy which have both been approved
by the Board Risk Committee. The MRC also provides regular updates on model
compliance to the Executive Risk Committee and Board Risk Committee.
The use of models for informing important business and strategic decisions has
grown significantly in recent years, and the Group continues to invest in Model Risk
Management.
Across the financial services sector there is significant regulatory change to improve
model risk sensitivity and coverage, including changes to IRB modelling approaches.
These changes require significant investment in governance processes, including
updated policies, standards and procedures.
New IRB models have been submitted for regulatory approval, which meet increased
regulatory requirements that came into effect on 1 January 2022. In the interim
period, a temporary model adjustment (TMA) has been used to uplift the expected
loss and risk weighted assets (RWAs) produced by the incumbent regulator approved
IRB models to the level expected once the models are finalised to meet the new
regulation.
Operational risk
Risk definition
The risk of losses, resulting from inadequate or failed internal processes, people and
systems, or from external factors.
Risk mitigation and
management
The key operational risks the Group face include:
• Information Security – Cyber Threat: We remain vigilant to the continued Cyber
threat across the globe and perform continuous improvement activities to mature
our control environment and protect our customers and colleagues.
• Change Demand & Delivery: The volume and pace of change across the Group
remains significant both from a strategic, organisational and regulatory
perspective. Balancing ‘run the business’ and ‘change the business’ priorities is a
key focus to ensure successful delivery of our ambitious growth and change
agenda, whilst maintaining operational resilience, a stable IT infrastructure and
robust cyber and economic crime defences.
Given the volume of change underway and planned, the Board established a new
sub-committee to oversee this Change agenda. The Board Change Committee
consists of two members of the Board Risk Committee to ensure a joined up view
of change risk is maintained.
•
Financial Crime & Fraud: Our well established financial crime, fraud monitoring and
management processes continue to be enhanced in recognition of both the
economic backdrop and the ever changing and complex financial crime landscape.
• Service Delivery: Maintaining focus on delivering high quality service and a
competitive product offering, supported by an operationally resilient business, will
ensure we can continue to provide critical business services to our customers at all
times.
• People Risk - Attract & Retain Talent: Attracting and retaining talent in a
competitive market is a key priority across the Group and our focus on culture,
colleague experience and our employee value proposition will support in this area.
Improving Line Manager capability also remains a key focus area. The importance
of having robust succession plans in place across the Group remains a priority.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 104
Reputational risk
Risk definition
The risk of an incident or issue presenting a challenge that has possible financial,
operational, and/or reputational impact on a Group business or the Skipton Group
brand.
Risk mitigation and
management
The Group Executive Committee and the Boards of Group businesses are responsible
for ensuring that reputational risk is effectively managed and, where appropriate,
escalated through the Group Risk Management Framework. Such risk can arise
through the poor management of risks or can be a standalone significant or major
risk event that has a material impact on one or more subsidiaries from a financial,
operational and/or reputational perspective.
This risk is managed by:
• Working within our Group Risk Management Framework which has ‘Reputational
Risk’ as a key consideration;
• Closely managing the Skipton and Skipton Group reputation through proactive and
reactive external communications, marketing, public affairs, and issues and crisis
management preparedness:
• Continuing to invest in our control environment;
• Continuing to focus on our purposeful delivery of providing member value through
high quality service, helpful and competitive product offerings and good consumer
outcomes.
Operational risk (continued)
Risk mitigation and
management
(continued)
• Operational Resilience: A strong focus remains on the Group’s operational
resilience which is the ability to prevent, adapt, respond to, recover and learn from
operational disruptions, to ensure we can continue to
provide important and critical
business services to our customers at all times. We conduct regular scenario
testing to ensure we have fit-for-purpose processes in place to handle any
disruption.
• Outsourcing and Third Party: We have ‘outsourcing and third party management’
processes to onboard new material suppliers and we work together with existing
material suppliers to ensure they are capable of maintaining their services to us,
even in a stressed environment. Given increased dependency on third parties, this
is an area we continue to invest in.
• Legal & Regulatory Risk: All Group businesses maintain an open relationship with
regulators and ensure there is a significant focus on meeting new and existing
legal and regulatory requirements.
• Data: All Group businesses are committed to protecting customer data which is
achieved by having robust frameworks, processes and governance in place.
To meet the CRD V Pillar 3 requirements, the Group
publishes further information about its exposures
and risk management processes and policies on the
Society’s website skipton.co.uk/about-us/pillar-3-
disclosure.
Conclusion
The geopolitical and economic events that shaped
2024 are being closely monitored by the Group.
Some economic uncertainty exists in the markets in
which we operate, and whilst it may be difficult to
predict the outcome of such uncertainty, I am
confident that the risk management framework
operated by the Skipton Group enables it to identify,
assess and manage the risks confronting it and
support business sustainability. To underpin this, the
Board Risk Committee will continue to promote a
culture which views risk management not as an
additional activity but as embedded in how the
business is run.
Denis Hall
Chair of the Board Risk Committee
25 February 2025
Performance & Strategy Governance Financial Statements
Other Information
D Hall
Skipton Group Annual Report & Accounts 2024 106
Dear member,
On behalf of the Board Remuneration Committee, I
am pleased to share the Directors' Remuneration
Report. This sets out the details of the executive
directors' pay, incentives and benefits and the non-
executive directors' fees for the year ending 31
December 2024.
This report also includes our revised Directors’
Remuneration Policy, with detail on how the
Society intends to implement it during 2025.
Our remuneration strategy has been enhanced to
increase the alignment of directors’ pay with the
Society’s performance and the long-term interests
of members.
Steven Davis,
Chair of the Board Remuneration Committee
The focus of the Committee is to set the Remuneration Policy, including base pay, variable remuneration and
other benefits for executive directors and material risk takers (MRTs). The Committee also has oversight of
reward for the broader colleague population and across the wider Skipton Group.
The members of the Board Remuneration Committee are all independent non-executive directors of the Society
and include members of the Board Risk, Board Audit and Board Change Committees.
We have set out this Directors’ Remuneration Report in the following four key sections:
1. Annual statement explaining the priorities of the Committee and summarising the remuneration policy for
executive directors.
2. An ‘At a glance summary’ of the key performance measures which inform our remuneration awards and
the outcomes for the executive directors for 2024.
3. The Directors’ Remuneration Policy, which has been reviewed with the updated policy intended to apply to
the three performance years from 2025 to 2027. The Remuneration Policy is included in full in this report
and will be put to an Advisory Vote at the AGM in April 2025.
4. The Annual Report on Remuneration in 2024, which explains how we applied our existing remuneration
policy in 2024 and how we intend to apply the revised policy in 2025.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 107
The key matters discussed, and the decisions made by the Committee during 2024 are set out below.
Remuneration component
Action taken
Directors’ Remuneration Policy
The Committee undertook a detailed review of the Directors’
Remuneration Policy and agreed updates and changes to the policy.
Following a comprehensive review of the competitiveness of the
Society’s approach to remuneration, the structure of variable pay has
been assessed with a view to future
-proofing the Society’s ability to
remain competitive in the market for executive talent and ensure
focus on long term objectives. We are therefore proposing to
introduce a Long
-Term Incentive Plan (LTIP) for the executive
directors and selected members of the Group Executive Committee.
2023 SVPA* outturns & payments
Approved annual discretionary bonus awards for all employees in
scope of the PRA and FCA remuneration rules in respect of the
performance year 2023, considering the Group Chief Risk Officer’s
risk report, the Group Chief Financial Officer’s sustainability review,
performance outcomes versus scheme measures and related
personal performance objectives.
2024 bonus plan design
Considered and approved the design of the Society’s and other Group
bonus plans and bonus metrics for performance year 2024.
2024 SVPA
measures & targets
Determined the updated key performance measures and targets
across the following areas:
• Financial
• Customer and Colleague
• Environmental, Social and Corporate Governance (ESG)
• Personal performance objective targets
2025 bonus plan design
Considered and approved the design of the Society’s bonus plans and
the bonus metrics for performance year 2025.
* SVPA stands for Single Variable Pay Arrangement which is the discretionary annual bonus plan in which the executive
directors and selected members of the Group Executive Committee participate.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 108
Variable remuneration in respect of performance for
2024
A key objective for the Committee is to ensure the
remuneration of the executive directors is both
aligned with and drives business performance
across a range of measures taken from our
Corporate Plan. Each year we review the design and
focus of our annual bonus schemes to ensure
alignment with strategy and to ensure that they drive
the culture and behaviours we want to promote and
reward appropriately.
Financial and Customer performance
The Committee chose to focus on two key financial
metrics for 2024, namely adjusted Group profit and
adjusted Society profit. Overall, as set out in the
Group Chief Executive’s Report and in the Financial
Review part of the Strategic Report, Skipton Group’s
financial performance in 2024 has been strong.
The Group delivered robust financial performance,
despite challenges from a shifting interest rate
environment. In 2024 our delivery against our
purpose saw an increase in financial advice
conversations, increased new lending to first-time
buyers, growth in Connells’ market share and profits,
and strong performance from Skipton Business
Finance and Jade. The combined success across the
businesses that make up the Skipton Group resulted
in an increase year-on-year for the adjusted Group
profit metric pay out, at 81.9% of maximum (2023:
55.7%).
Despite anticipated declines in net interest income
the Society delivered a resilient, above target
performance. In addition to growing our customer
base to over 1.27m customers, mortgage and
savings growth from a strong member pricing
strategy offset some reduction in margins. As a
result, the adjusted Society profit metric pay-out
remains strong but decreased on prior year, to 66.6%
of maximum (2023: 78.3%).
Our customer base has grown in 2024, and we have
seen improved customer satisfaction through our
offering of both great service and products. In 2024
a customer satisfaction score of 90.2% was
achieved, which is within the top decile of Financial
Services organisations, and an increase on last
year’s performance. The net customer satisfaction
performance measure achieved 9 out of 10 and will
pay out at 90% (2023: 60%).
Non-financial performance
In line with the aim to simplify our bonus plans and
align metrics to the Corporate Plan, three key non-
financial performance metrics were included for
2024.
We continued to focus on our Environmental, Social
and Governance (ESG) strategy with a carbon
footprint metric, supporting the creation of a Group-
wide approach to sustainability by setting a target
for the Group and not just the Society. The ESG
metric achieved 10 out of 10, paying out maximum
(100%).
A Diversity and Inclusion metric, focused on meeting
our Women in Finance Charter target, was again
included with an ambitious target. The Society
achieved an outcome of 46.7% against the 2024
Women in Finance target (47.4% in 2023), which is a
strong outcome compared to the national average of
35% across Financial Services organisations. The
D&I metric score achieved 5 out of 10, paying out at
threshold (51%).
A new people-driven metric was introduced in 2024,
enabling us to track progress against our cultural
transformation. This metric achieved 7 out of 10,
paying out at 70%. This will be further built on in
2025 with the introduction of a new employee net
promoter score (eNPS) in the bonus metrics.
Performance awards for 2024
The key measures and targets featured in the SVPA
are cascaded across the incentive schemes covering
all colleagues within the Society. This common
structure helps build a shared commitment to our
purpose, vision and strategy and provides all
colleagues in the Society with an opportunity to be
rewarded in a way that recognises our collective
success.
With the close of the year, the Committee reviewed
the performance of all 2024 bonus metrics and
outcomes, assessing whether the proposed incentive
payments for 2024 clearly reflect performance
outcome in terms of financial and non-financial
contributions. A colleague’s individual performance
against personal objectives is also taken into
account.
The Committee reflected on the outcomes under the
SVPA scheme, considering financial and non-
financial performance, plus personal performance
.
Incentive payments awarded were between 37.4%
and 39.3% of salary, where the maximum potential
bonus under the scheme is 50% of salary.
In arriving at the decision on SVPA awards, a risk
assessment process was undertaken, during which
the Committee considered a range of factors and
input from the Board Risk Committee. The
Committee decided that no adjustments were
appropriate at the point in time.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 109
2025 look forward
At Skipton Group, we seek to offer an overall reward
package that is market competitive, compelling to
new hires, fair and equitable to existing colleagues.
The current Directors’ Remuneration Policy, set out in
the 2021 Annual Report and Accounts, was approved
at the 2022 AGM, receiving 90.26% of votes in
favour. During 2024, the Committee undertook a
comprehensive review of the Directors’
Remuneration Policy considering whether the current
remuneration structure remains fit for purpose. The
Committee‘s review set out to ensure the Policy
continues to support Skipton Group’s strategy, as set
out in the Corporate Plan, and the aim of providing a
compelling market competitive total reward package
to recruit, retain and motivate high calibre
executives.
In addition, the Committee considered whether the
current policy aligns reward with members’ interests,
and long-term sustainable business performance.
As a consequence of the policy review, conducted
with the assistance of independent experts, the
Committee has agreed that the scope of variable pay
should be broadened to include a mix of short-term
and long-term performance incentives. The current
short-term incentive plan (the SVPA) remains fit for
purpose but only provides for short-term, annual
focus.
To ensure our executives are incentivised to drive
long-term sustainable success which is aligned with
the interest of members, and to support a strong and
integrated Skipton Group - the success of which will
benefit all members and the Society; it is proposed to
introduce a new Long Term Incentive Plan (LTIP) in
2025. The purpose of this plan is to:
• incentivise selected senior Skipton Group
executives to deliver on the Group’s long-term
strategy over a multi-year period, thereby
contributing to the long-term stability of the
Skipton Group and creating value for the
Society and its members;
• improve the competitiveness of the total
remuneration package for senior Skipton
Group executives relative to those roles at
other financial services groups including
mutuals; and
• to support the retention of high calibre senior
executives.
The Directors’ Remuneration Policy is set out in full
in this report with additional detail regarding the
specifics of the LTIP set out on page 114. No other
material changes to the policy are proposed.
In line with the regulatory requirements for listed
companies, we voluntarily choose to put the
directors’ remuneration policy to a member vote at
least every three years. The updated policy is
intended to apply for three years (2025/2026/2027)
to the AGM in 2028 and will be put to an advisory
vote at our AGM in 2025.
As mentioned in the Chair’s Statement, Andrew
Bottomley has announced his retirement from the
Society in 2025. The Board Remuneration Committee
has determined that a pro-rata SVPA bonus award is
to be considered for the period in office for
performance year 2025.
In addition, Mark Lund will be stepping down as a
non-executive director in 2025. I would like to take
this opportunity to thank Mark for all his contribution
to the work of the Committee. His replacement will
be announced in due course.
Conclusion
On behalf of the Committee, I hope this report gives
you a clear view of how we have implemented the
remuneration policy in 2024 and how we are
investing to support the Group’s ambitions and
strategic priorities set out in our Corporate Plan. The
Committee recommends that the members vote in
favour of the advisory resolution to approve both the
2024 Directors’ Remuneration Report and the
updated Policy at the forthcoming AGM.
Steven Davis
Chair of the Board Remuneration Committee
25 February 2025
Performance & Strategy Governance Financial Statements
Other Information
S Davis
Skipton Group Annual Report & Accounts 2024 110
Payments made to Executive Directors 2024
The table below summarises the total payments made to executive directors in respect of the 2024 financial
year. The figures shown in the graph are included in the single figure table on page 119. Further details on the
variable pay awards, the performance measures, and the extent to which they are achieved are on pages 120
to 121.
Stuart Haire
Group Chief
Executive Officer
Andrew Bottomley
Chief Executive
Officer, Money
Paul Chambers
Group Chief
Financial Officer
(Note 2)
£718k
£352k
£388k
£365k
£111k
£70k
£56k
£52k
£145k
£282k
£132k
£145k
£66k
Base Salary
Pensions & Benefits
Other
2024 SVPA Award
Bobby Ndawula
Former Group Chief
Financial Officer
(Note 3)
Notes
1. Benefits includes all taxable benefits (e.g. private medical insurance, car allowance, health assessment, life assurance,
group income protection, accommodation, and travel).
2. Paul Chambers commenced employment with the Society on 6 February 2024 and was appointed to the Board on 26
March 2024. Whilst we stated in last year’s report that Paul was expected to receive a lost opportunity award of
£250,000, the Society only actually paid him £145,000 as his forfeited award was part paid by Standard Chartered.
3. Bobby Ndawula’s employment with the Society ended on 22 November 2024. The amount awarded to him under the
SVPA takes into consideration the period in office from 1 January to 31 May 2024. His garden leave commenced on 1
June 2024.
Remuneration in the Society
Whilst the key focus of the Board Remuneration Committee is remuneration for the Group Executive
Committee, we also monitor how executive remuneration aligns with the wider Society colleague population.
The table below gives a snapshot of average pay increases and bonus awards by level in 2024.
Average Pay Increase Average Bonus Award
Group Chief Executive
4.00% 39.3%
Executive Directors
4.00% 37.4%
Other Group Executive Committee members
4.40% 34.8%
Senior Leaders
5.15% 19.9%
All other colleagues
5.02% 9.2%
The pay increase agreed for all colleagues in the Society was 5%, effective 1st January 2024. A small number
of colleagues received an additional amount where competitive external market conditions brought about
recruitment and retention challenges in certain areas of the business. The Society also offered an enhanced
increase for those below the Real Living Wage. An additional one-off payment of £500 was paid in February
2024 to the lowest earners across the Society.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 111
During 2024, the Committee undertook a detailed review of the current Directors’ Remuneration Policy. This
section sets out in full the proposed updated policy for our executive directors and non-executive directors. We
will seek member support by way of an advisory vote at the 2025 AGM. The updated Policy is intended to apply
for three years from that date unless amendments are required in the interim, in which case a further advisory
vote will take place.
2025 Policy changes
In performing its review, the Committee thought it timely and appropriate to assess whether the structure of
remuneration packages for executive directors enables the Group to sufficiently attract, retain and incentivise
them whilst also driving the behaviours to successfully deliver the Group’s long-term strategic priorities and
member value.
The Committee also considered the Society’s general remuneration principles which are applied to the
remuneration of all Society colleagues. These principles reflect the specific regulatory requirements of the PRA
and FCA with regards to remuneration, and governance.
Input was sought from the Society’s Chair, the Board, the Committee’s independent external advisers and
members of senior management.
As a consequence of the review, the one key change proposed to the Directors’ Remuneration Policy is the
introduction of a Long-Term Incentive Plan (LTIP). The LTIP is designed to incentivise the group executive
team to deliver on the long-term strategy of the Group by rewarding for performance over a multi-year period.
This would contribute to the long-term stability of the Group, creating long term value for members, while at the
same time improving the competitiveness of the total remuneration package available to executive directors,
and so supporting both the attraction and retention of talent in an increasingly competitive market.
Where appropriate, the Committee would be able to make discretionary annual LTIP awards to executive
directors that could pay out a maximum opportunity of 75% of base salary for achieving stretching
performance over 3 years. Target performance over the same 3 years would deliver 45% of base salary.
Awards would be subject to a participant meeting financial and non-financial measures over a forward-looking,
three-year performance period. All LTIP awards would be deferred in their entirety and would be subject to
malus and clawback, in line with regulatory requirements. Benchmarking by our external advisors has shown
that, with the addition of the LTIP, total executive reward will be comparable to the external market which is in
line with our pay approach for all colleagues.
The introduction of an LTIP will require some minor changes to the operation of the SVPA so that they
complement each other. In all other aspects, the proposed updated policy remains substantively unchanged.
Some sections have been redrafted to improve clarity and simplicity, and to enable the Committee to respond
appropriately to regulatory and market change over the next three years.
Policy on remuneration of executive directors
The table below shows the key elements of remuneration for executive directors and the reasons for their
inclusion.
Base salary
How the element supports
our strategy
Supports the recruitment and retention of executive directors with the necessary
experience and expertise to deliver the Group’s long
-term strategic priorities.
Operation
Base salary is typically reviewed annually and reflects the size of the role and
responsibilities, and the skills and experience of the individual as well as the
individual’s performance.
When appointing an acting or interim executive director, the Committee may
decide to pay a temporary allowance (as opposed to a permanent uplift to
salary). The amount will be agreed by the Committee and may be included for
the purposes of calculating benefits, pensions, and incentive awards.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 112
Pension
How the element supports
our strategy
Provides post
-retirement benefits for participants in a cost-efficient manner.
Operation
The Society contributes to a defined contribution pension scheme for the executive
directors. The contribution can instead be paid in cash (which is excluded from
incentive calculations) if the executive director is likely to be affected by the limits
for tax
-approved pension savings.
One executive director has a legacy pension arrangement.
Maximum potential value
The pension allowance rate for executive directors aligns with the rate available to
all other colleagues (currently 10% of base salary). Andrew Bottomley is an
exception and receives a 15% contribution.
Performance conditions
and assessment
None applicable.
Base salary (continued)
Maximum potential value
There is no set maximum. However, i
n setting appropriate salary levels and in
determining appropriate increases to base salary, the Committee takes into
account a number of factors, including, but not limited to:
▪ The scope of the role.
▪ Pay levels in comparable organisations.
▪ Pay increases elsewhere within the Group.
▪ Individual performance.
Increases to base salary are determined annually by the Committee, using
data for
similar positions in comparable organisations as a reference point. The data
is independently commissioned, and the Society aims to position executive
directors appropriately within this reference group.
Performance conditions
and assessment
None applicable.
Benefits
How the element supports
our strategy
Provides a range of flexible and market competitive benefits to support executive
directors in carrying out their roles effectively.
Operation
A number of benefits are provided to executive directors, including a car or car
allowance, private medical insurance, health assessment, life insurance and group
income protection benefits.
The Committee reviews benefits from time to time and may make changes, for
example, to reflect market practice or the needs of the business.
Maximum potential value
There is no set maximum. The Society bears the cost of providing benefits, which
may vary from year to year. The maximum potential value will depend on the type of
benefit and cost of providing it, which will vary according to market rates.
Performance conditions
and assessment
None applicable.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 113
Annual Discretionary Bonus Plan
- SVPA
How the element supports
our strategy
▪ Supports the attraction and retention of executive directors.
▪ Supports the delivery of a high-performance culture.
▪ Rewards short-term annual performance within the context of achieving
corporate goals and objectives as set out in our Corporate Plan.
▪ Encourages positive behaviours and sustainable performance to support the
achievement of strategic goals.
Operation
Performance is assessed against a balanced scorecard of measures to determine
the amount of the award for any particular year (see details below on performance
conditions and assessment).
Awards are granted on a discretionary basis and are normally paid 50% in cash and
50% in contingent cash (an instrument that pays out in full so long as the CET1
capital ratio of the Society does not fall below a specified percentage) or an
alternative instrument as the Committee deems appropriate, in line with regulatory
requirements.
Awards will be paid out in a manner which ensures that, in combination with LTIP
awards, the minimum regulatory requirements in respect of deferral periods for total
variable pay are met or exceeded.
▪ The non-deferred portion is normally paid following the end of the
performance year.
▪ The element delivered as contingent cash, or an alternative instrument, is
subject to a retention period to the extent required by regulation.
All awards are subject to malus and clawback in line with regulatory requirements.
Awards are also subject to any other terms as may be required by law or regulation
from time to time.
Maximum potential value
The maximum incentive which may be earned for any year under the SVPA is 50%
of base salary.
No incentive is paid for performance below the threshold level, with a varying of
levels of pay
-out for performance between threshold and maximum. On-target
performance generally attracts an incentive of 60% of the maximum.
Performance conditions
and assessment
The performance measures and targets attached to the SVPA will be determined by
the Committee from year to year. A mix of financial and non
-financial (including
personal) measures will be used. Financial measures will account for a maximum
of 50% of the SVPA opportunity.
The types of measures and/or weightings attached to each individual measure may
vary from year to year as determined by the Committee.
The measures and weightings are set at the beginning of the relevant financial year.
Targets are set in the context of the corporate plan and are discussed at the Board
and approved by the Board Remuneration Committee. Where targets attached to
the SVPA are considered commercially sensitive, they will be disclosed
retrospectively along with the assessment of performance against those targets.
Performance against the measures is reviewed and approved by the Committee.
All assessments of performance are ultimately subject to the Committee’s
discretion. In addition, the Committee retains discretion in exceptional
circumstances to change performance measures and targets, and the weightings
attached to performance measures part
-
way through a performance year ,if there is
a significant and material event which causes the Committee to believe the original
measures, weightings and targets are no longer appropriate.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 114
Long Term Incentive Plan (LTIP)
How the element supports
our strategy
• To incentivise executive directors to deliver on the long-term strategy of the
Group over a multi-year period, thereby contributing to the long-term stability of
Skipton and creating value for the Society and its members.
• Improves the competitiveness of the total remuneration package for executive
directors relative to those roles at other financial services groups, including
mutuals.
• Supports the attraction and retention of high calibre individuals.
Operation
• Awards are discretionary and normally granted subject to achievement of
satisfactory performance over the prior year. The first awards under the LTIP
may be granted in 2025 subject to satisfactory performance in 2024.
• Awards are then normally subject to a forward-looking, three-year performance
period which runs from the start of the year in which the grant is made.
• Maximum awards will only be paid where there has been outstanding
performance. The award levels may be varied in exceptional circumstances.
• Awards are normally paid 100% in contingent cash (an instrument that pays out
in full so long as the CET1 capital ratio of the Society does not fall below a
specified percentage) or an alternative instrument as the Committee deems
appropriate, in line with regulatory requirements.
• Contingent cash, or an alternative instrument, is subject to a retention period to
the extent required by regulation.
• All awards under the LTIP are deferred. The length of deferral applied will be at
the discretion of the Committee and in line with the relevant regulatory
requirements.
• All awards are subject to malus and clawback in line with regulatory
requirements.
Maximum potential value
The normal LTIP grant is up to 75% of base salary. However, in exceptional
circumstances, the Committee may make an LTIP grant of up to 125% of base
salary. In 2025, LTIP grants will not exceed 75% of base salary.
No pay
-out is made where performance is assessed by the Committee as
being below the threshold level, with varying levels of pay
-
out for performance
between threshold and maximum. On
-target performance generally attracts
an incentive of 60% of the maximum.
Performance conditions
and assessment
The Committee takes into consideration performance over the initial performance
period when determining whether an LTIP grant will be made.
Forward
-looking performance is assessed over a three-year period and against a
mix of financial and non
-financial measures in line with the Group’s long-term
strategy.
Both performance measures and individual measures, plus weightings attached to
measures, may vary from year to year as determined by the Committee.
In addition, the Committee retains discretion to, in exceptional circumstances,
change performance measures and targets and the weightings attached to
performance measures part
-way through a performance period if there is a
significant and material event which causes the Committee to consider that the
original measures, weightings and targets are no longer appropriate.
Performance against the measures is reviewed and approved by the Committee.
All assessments of performance are ultimately subject to the Committee’s
discretion.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 115
Committee’s discretion in relation to the operation of the SVPA and LTIP
The Committee also has the discretion to cease or amend the operation of either arrangement where this is necessary
to ensure the arrangements continue to meet the Committee’s overriding remuneration principles and risk criteria.
Policy on remuneration of non-executive directors
The Board Remuneration Committee determines the Chair’s fee while the fees of the other non-executive
directors are determined by the Non-Executive Remuneration Committee and approved by the Board.
The table below sets out the elements of non-executive directors’ remuneration and the policy on how each
element is determined:
Approach to recruitment remuneration
Overall, the Committee aims to recruit executive directors using remuneration packages that are market-
competitive and as consistent as possible with the remuneration structures of existing executive directors. In
doing so, the Committee seeks to pay no more than necessary to attract talented individuals to work for the
Society. Typically, newly recruited executive directors will be eligible to receive the same remuneration
elements as existing executive directors, as set out in the policy table above.
Our intention would be to offer any new executive director benefits in line with the policy set out in the policy
table. However, if individual circumstances require, the Committee may offer a new recruit such additional
benefits as might be required to secure their services.
This may, for example, include payment of relocation allowances and similar costs for new executive directors.
The Committee will act to ensure that any such allowances and payments are not excessive.
In addition to ongoing remuneration arrangements, the Society may, where necessary, make replacement
awards to ‘buy-out’ any remuneration awards or opportunities that an incoming executive director has forfeited
in order to join the Society. Where this is necessary, the Committee will ensure that the overall value does not
exceed the value of remuneration being given up and will take into account regulatory requirements,
performance conditions and timing of payments. The awards will be subject to malus and clawback in line
with regulations.
The Committee does not expect to make additional recruitment arrangements (such as signing on bonuses)
as standard practice but may (in line with regulations), from time to time, consider it necessary to do so in
order to secure the appointment of the candidate.
Newly appointed non-executive directors will receive fees in line with the policy outlined in the table above.
Element
Approach to determination
Base fees
Fees are typically reviewed annually. They are determined based on
responsibilities and the time commitment required for Board and Board
Committee meetings.
Reviews also consider fees paid by comparable financial services
organisations and any other relevant comparator group(s) that the Committee
deems appropriate.
Additional fees
Additional fees may be paid for additional responsibilities, such as committee
chairing or other duties, as the Committee deems appropriate.
Other items
Non
-executive directors are not eligible to participate in any form of
performance pay plans and do not receive pensions or other benefits. Travel
and subsistence expenses, including between home and Skipton offices, are
reimbursed. In addition to reimbursement for expenses, any tax that arises on
those expenses is settled by the Society on behalf of the non
-executive
directors.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 116
Directors’ service contracts and notice periods
The executive directors are employed on rolling service contracts which can be terminated by either the
Society or the director giving one year’s notice. Unless notice to terminate is given by either party, the contracts
continue automatically. Non-executive directors have letters of appointment.
Policy on termination payments
The Committee’s overarching aim is to treat departing executive directors fairly, taking into account the
circumstances of their departure, always taking care to ensure that the interests of members are considered
and that there are no rewards for failure.
Executive directors are entitled to be paid their base salary and contractual benefits (including pension
contributions) during the notice period. The Society has the discretion to pay these as a lump sum in lieu of
notice.
In the following (good leaver) circumstances an individual will be eligible for a payment under the incentive
schemes:
• Normal retirement
• Death
• Injury or disability; or
• Any other circumstances which the Committee may in its discretion determine.
In exercising discretion on eligibility for payment of annual or deferred amounts, the Committee will consider
the circumstances surrounding the departure.
Under the SVPA and LTIP, unvested deferred awards will normally lapse on leaving unless good leaver
circumstances apply, in which case the awards will normally continue to vest on the original vesting dates,
subject to the performance conditions and rules of the relevant plan. Provided the individual is a good leaver,
they will be eligible to be considered for an SVPA award in respect of their final year of employment. Normally,
individuals will not be eligible to be considered for an LTIP in their final year of employment.
On termination, awards will be treated in accordance with the relevant plan rules or other terms on which they
were granted. Under both the SVPA and LTIP, the Committee retains the discretion to adjust the proportion of
the outstanding payments or deferred awards that are retained by a leaver, based on the facts and
circumstances of their departure. Malus and clawback will continue to apply to all leavers and may be invoked
to adjust awards if issues come to light. Any variable pay awards subject to deferral and/or retention periods,
as well as any ‘in-flight’ LTIP awards, will continue to be paid at the usual payment date. The Committee will
have discretion to accelerate payments in exceptional circumstances (such as in the case of death).
The Committee has the discretion to make further payments that it deems reasonable in the circumstances,
for example relating to loss of statutory rights, professional advice, and any accrued but untaken leave.
Consideration of remuneration arrangements elsewhere in the Society
The Committee does not currently consult employees on remuneration policy for directors, but it does take into
consideration remuneration arrangements for the wider population in the Society when determining executive
remuneration.
Since 2019, the Society has designated a non-executive director to have a particular focus on engagement with
colleagues. This contributes to ensuring that colleague views are reflected in Board discussions and decision
making.
Consideration of member views
The Committee has, for a number of years, invited members to vote on the Directors’ Remuneration Policy and
annual Remuneration Report. A significant majority of members have voted in favour at previous AGMs. We
also receive feedback from individual members on specific aspects of directors’ remuneration and we take
this into account when determining remuneration policy and outcomes.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 117
0 5 10 15
Minimum
Opportunity
Target
Opportunity
Maximum
Opportunity
Salary Pension & Benefits SVPA LTIP
Potential remuneration based on performance
The charts below set out the potential value each of the executive directors could earn under the proposed
directors’ remuneration policy, in different performance scenarios using an LTIP grant value of 75%: Minimum
(i.e. fixed pay, pension and benefits only, zero variable pay), Target (i.e. fixed pay, pension, benefits and 50% of
the maximum variable pay that may be awarded) and Maximum (i.e. fixed pay, pension, benefits and the
maximum variable pay that may be awarded).
The Committee intends to keep the LTIP grant levels under review over the course of the three-year policy to
ensure they remain appropriate, therefore the potential value illustrated may be subject to change but will not
exceed the maximum values set out within this policy.
A significant proportion of the potential remuneration of the executive directors is payable based on the
achievement of stretching performance measures and subject to deferral, malus and clawback. No payments
relating to LTIP awards will be made until after the end of the forward-looking three-year performance period.
Performance & Strategy Governance Financial Statements
Other Information
87%
53%
42%
13%
8%
6%
16%
21%
24%
31%
£0k £500k £1000k £1500k £2000k
Minimum
Target
Maximum
£853k
£1,407k
£1,777k
84%
52%
41%
16%
10%
8%
15%
20%
23%
31%
£0k £500k £1000k £1500k £2000k
Minimum
Target
Maximum
£527k
£859k
£1,081k
83%
51%
41%
17%
11%
8%
15%
20%
23%
31%
£0k £500k £1000k £1500k £2000k
Minimum
Target
Maximum
£485k
£689k
£865k
Stuart Haire
Group Chief
Executive Officer
Andrew Bottomley
Chief Executive
Officer, Money
Paul Chambers
Group Chief
Financial Officer
(Note 2)
Skipton Group Annual Report & Accounts 2024 118
The Annual Report on Remuneration explains how we applied our existing remuneration policy in 2024 and
how we intend to implement the revised policy in 2025. The Committee is comfortable that the current policy
operated as intended and that the overall 2024 remuneration paid to executive directors, as set out below, is
appropriate.
Key metrics for Remuneration in the SVPA for 2024
The Strategic Report provides a comprehensive explanation of the Group’s purpose and strategy. To keep us
focused on delivering our strategy we have three key priorities:
• Help more people have a home
• Make money work harder
• Make membership matter
These ensure we are driving the Group forwards and working together to deliver more for the Society’s
members. In addition, the Strategic Report explains how Environmental, Social and Corporate Governance
(ESG) are woven through the strategy.
The table below highlights how the measures in the SVPA have aligned with strategic priorities and ESG and
financial sustainability throughout 2024.
SVPA Measures Weighting Alignment
Group CEO
Other
Executive
Directors
Homes Money
Members
ESG
Group PBT (adjusted)*
25% 20%
P P P
Society PBT (adjusted)*
20% 25%
P P P
Net customer satisfaction
15% 15%
P P P
Colleague engagement & culture
5% 5%
P P P
ESG
– carbon footprint 2.5% 2.5%
P
D&I
– Women in Finance 2.5% 2.5%
P
Personal Objectives
– how & what 30% 30%
P P P P
Features of the SVPA Scheme Alignment
Homes Money
Members
ESG
Risk adjustment
P P P P
Sustainability review (financial sustainability of the Group)
P
Deferral of at least 50% of incentive
P
Discretion to reduce/defer/recover payments
P P P
* For bonus purposes, the Group and Society profit are adjusted for those items that are not considered part of the Group’s
core strategy, to give greater transparency of the performance of ongoing trading activities - as defined within the Strategic
Report; or for those items that are outside of the directors’ control.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 119
Executive Directors’ Remuneration
The total remuneration of each executive director in 2024 and 2023 is set out in the single figure tables below:
2024 Audited
Executive
Director
Role
Salary
£000
Benefits
(1)
£000
Pension
(2)
£000
Total Fixed
Remuneration
£000
SVPA
£000
Other
£000
Total
Remuneration
£000
Stuart
Haire
Group Chief
Executive
718 39 72 829 282 - 1,111
Andrew
Bottomley
CEO, Money
352 17 53 422 132 - 554
Paul
Chambers
(3)
Group Chief
Financial
Officer
388 17 39 444 145 145 734
Bobby
Ndawula
(4)
Group Chief
Financial
Officer
365 15 37 417 66 - 483
Total
Remuneration
1,823 88 201 2,112 625 145 2,882
Executive
Director
Role
Salary £000
Benefits
(1)
£000
Pension
£000
Total Fixed
Remuneration
£000
SVPA
£000
Total
Remuneration
£000
Stuart
Haire
Group Chief
Executive
690 42 69 801 233 1,034
Andrew
Bottomley
CEO, Money
338 15 51 404 121 525
Ian
Cornelius
(2)
Commercial
Director
140 7 14 161 - 161
Bobby Ndawula
Group Chief
Financial Officer
392 16 39 447 132 579
Total
Remuneration
1,560 80 173 1,813 486 2,299
Notes
1. Includes all taxable benefits (private medical insurance, car allowance, health assessment, life assurance, group
income protection and GCE travel and accommodation).
2. Ian Cornelius stepped down from the role of Interim Group Chief Executive on 30 December 2022, but he remained a
director. His employment with the Society ended on 31 May 2023. This does not include payment for loss of office
referenced in the Annual Report & Accounts 2023.
Notes
1. Includes all taxable benefits (private medical insurance, car allowance, health assessment, life assurance, group
income protection and travel and accommodation).
2. Current executive directors receive 10% of base salary paid into the pension scheme up to the tax approved pension
limits with any balance paid to them, with the exception of Andrew Bottomley who receives 15%.
3. Paul Chambers started his employment with the Society on 6 February 2024. Whilst we stated in last year’s report that
Paul would receive a lost opportunity award of £250,000, the Society actually paid him £145,000 for his forfeited
performance year 2023 bonus.
4. Bobby Ndawula’s employment with the Society ended on 22 November 2024. The amount awarded to him under the
SVPA takes into consideration the period in office from 1 January to 31 May 2024 His garden leave commenced on 1
June 2024.
2023 Audited
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 120
Base Salary & Fees
The Chair and non-executive directors took no increase in fees in 2024. Pay awards for the executive directors
were made in line with the colleague population, effective 1 January 2024.
Note:
1. Paul Chambers joined on 6 February 2024 and the salary stated is effective from then.
Variable Pay: Single Variable Pay Arrangement (SVPA)
The SVPA is a discretionary incentive plan designed to reward performance on an annual basis within the
context of achieving corporate goals and objectives as set out in our Corporate Plan, encouraging positive behaviours
and maintaining sustainable performance to support the achievement of strategic goals. Participation in the plan
relating to any financial year shall be at the discretion of the Board Remuneration Committee.
The table below summarises the measures, performance targets, outcomes and weightings of the 2024 SVPA.
Note:
1. For bonus purposes, the Group and Society PBT figures are adjusted as outlined in the Board Audit Committee Report.
At the end of the year, the Committee reviewed the annual performance under the SVPA for all the executive
directors and selected Group Executive Committee members. The incentive outcomes for 2024 are based on
the performance relative to target for the SVPA measures. They also reflect the Committee’s assessment of
performance achieved against personal objectives, taking into consideration the views of the non-executive
members of the Board.
Based on this overall assessment, the outcomes for the executive directors were between 37.4% and 39.3% of
base salary reflecting the robust performance of the Group over the year.
Executive Director
Role % increase January 2024 January 2023
Stuart Haire
Group Chief Executive
4.00% £717,600 £690,000
Andrew Bottomley
CEO, Money
4.00% £351,942 £338,405
Paul Chambers
(1)
Group Chief Financial Officer
- £430,000 -
Bobby Ndawula
Group Chief Financial Officer
4.00% £407,569 £391,893
2024
Performance
Measures
Performance Target
Range: Threshold -
Maximum
Performance
relative to Targets
Outcome
Weighting
Group Chief
Executive
Weighting
other
Executive
Directors
Adjusted Group PBT
(1)
£237.6m
-
£335.4m
Above target /
below maximum
£310.1m 25% 20%
Adjusted Society PBT
(
1)
£173.5m
-
£244.9m
Above target /
below maximum
£210.8m 20% 25%
Society net customer
satisfaction
5/10 – 10/10
Above target /
below maximum
9/10 15% 15%
Colleague engagement
and culture
5/10 – 10/10
Above target /
below maximum
7/10 5% 5%
ESG
–
carbon footprint
5/10 – 10/10
At or above
maximum
10/10 2.5% 2.5%
ESG
– Women in
Finance
5/10 – 10/10
At or above
threshold / below
target
5/10 2.5% 2.5%
Personal Objective: performance has been assessed against both the delivery
of the Society performance scorecard as well as individuals’ goals, values and
Behaviours i.e. the “how” and the “what”.
30% 30%
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 121
Risk considerations
To ensure that rewards are based on sustainable
performance, set in a multi-year period, the Board
Remuneration Committee conducts a sustainability
review for senior schemes (SVPA and senior
leaders), one year after the original performance
year. The review also considers feedback from the
Board Risk and Board Audit Committees provided as
part of the annual risk assessment process. The
sustainability review conducted in February 2025 for
the 2023 SVPA and senior leaders’ schemes
demonstrated that 2023 performance levels had
been maintained in 2024. The Board Remuneration
Committee therefore concluded that no adjustment
to the 2023 awards was required at the point in time.
The Society has a Risk Adjustment Policy which sets
out its approach to ex-ante and ex-post risk
adjustment, malus and clawback. Where the
Remuneration Committee determines that risk
adjustment is required, payments due from the
scheme and deferred payments (if applicable) may
be postponed, reduced, or cancelled for some, or all,
participants. In certain circumstances, the business
may need to apply clawback arrangements and
require repayment of an appropriate amount of
variable pay relating to the event which has
occurred.
The Board Remuneration Committee, after
consultation with the Board Risk and Board Audit
Committees and consideration of performance
against risk appetites, did not make any risk
adjustments for 2024.
Deferral arrangements
In line with relevant remuneration regulations, which
include the Remuneration part of the PRA rulebook
and the FCA’s Dual Regulated Firms Remuneration
Code, variable pay awards may be subject to
deferral.
For executive directors whose remuneration is over
the ‘de-minimis’ limit, variable pay awards are
required to have a deferral period of 7 years, with
60% deferred. Regulations also require 50% of total
variable pay award to be delivered as an ‘instrument’
and subject to a holding period of 12 months. The
Society uses contingent cash to fulfil the 50%
instruments requirement. All payments are subject to
malus and clawback.
The table below sets out how deferral has operated
during 2024, detailing the percentage of the
executive directors’ 2024 SVPA awards which will be
paid per year, made up of payments in cash and
instruments (contingent cash payments).
Non-deferred Deferred
Mar 25
Mar 26 Mar 27 Mar 28 Mar 29 Mar 30 Mar 31 Mar 32 Mar 33
Cash
20% - - 6% 6% 6% 6% 6% -
Instrument
- 20% - - 6% 6% 6% 6% 6%
Payments to former directors
A payment of £90,302.38 was made to David Cutter
in March 2024 in respect of vested deferred
payments in 2024 from the 2016, 2017, 2018 and
2019 SVPA schemes. A further payment of
£9,674.68 was made in September 2024 in respect
of vested deferred payment from the 2016 SVPA
scheme.
A payment of £75,852.04 was made to Ian Cornelius
in March 2024 in respect of vested deferred
payments in 2024 from the 2018, 2019, 2021 and
2022 SVPA schemes.
Payments for loss of office
In agreement with the Board, Bobby Ndawula
stepped down from the role of Group Chief Financial
Officer on 31 May 2024. His period of garden leave
commenced on 1 June until his employment with the
Society ended on 22 November 2024. The Board
Remuneration Committee determined that a pro-rata
SVPA bonus award was to be considered for the
period in office for performance year 2024. An award
of £66,056.67 was made for the period in active
employment in addition to payment of deferred
awards. Deferred awards for completed
performance periods and for part completed
performance periods will be paid on the due date.
The CEO Money, Andrew Bottomley, has announced
his intention to retire from the Society in 2025. The
Board Remuneration Committee has determined that
a pro-rata SVPA bonus award is to be considered for
the period in office for performance year 2025.
Deferred awards for completed performance periods
and for part completed performance periods will be
paid on the due date.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 122
Non-Executive Directors’ remuneration
The role of the Non-Executive Remuneration Committee is to set and review non-executive director (NED) fees
(other than the Chair of the Board) ensuring that these are appropriate to attract high quality individuals.
The table below sets out the annual fees payable for all non-executive director roles in 2024.
2024 (£) 2023 (£)
Chair
260,000 260,000
Non
-Executive Directors base fee 70,000 70,000
Senior Independent Director (“SID”) fee
78,613 78,613
Chair of Board Audit and Board Risk Committees fee
25,000 25,000
Chair of Board Remuneration Committee fee
20,000 20,000
Chair of Board Nominations Committee fee
(1)
- -
Chair of Board Change Committee fee
20,000 20,000
Board Audit, Board Risk, Board Change and Board Remuneration Committee
membership fees
10,000 10,000
Note:
1. There is no separate Nominations Committee chair fee as the Board Chair assumes this role.
The actual total fees and expenses for the non-executive directors in 2024 and 2023 are set out below.
Detailed information regarding the non-executive directors may be found in the Corporate Governance
Report.
Notes
1. Expenses relate to reimbursement of travel and subsistence between home and the Skipton head office,
including for attendance at Board and Committee meetings. In addition to reimbursement for expenses, any tax
that arises is settled by the Society on behalf of the non-executive directors.
2. Mark Lund is the Senior Independent Director for the Skipton Board. He was re-appointed as Chair of Connells,
following Sarah Whitney's departure, on 1 March 2024. The annual payment of £50,000 received as Chair of
Connells board is included in the table above.
3. Steven Davis received a one-off fee in 2024 for additional duties carried out on behalf of the Board.
4. Hasintha Gunawickrema was appointed as a non-executive director effective 1st November 2024.
5. Philip Moore is Chair of Connells Audit & Risk Committee, and also a non-executive director of Connells Limited,
for which he receives an annual fee of £35,000, included in the table above.
6. Sarah Whitney was Chair of Connells board until 29 February 2024, for which she received a fee of £50,000. The
pro-rata amount is included in the table above.
2024 2023
Non
-Executive Director
Fees
£000
Taxable
Expenses
(1)
£000
Total
£000
Fees
£000
Taxable
Expenses
(1)
£000
Total
£000
Gwyn Burr (Chair)
260
3
263
260
-
260
Mark Lund (Deputy Chair)
(2)
146
6
152
149
3
152
Iain Cummings
115
6
121
101
2
103
Steven Davis
(3)
110
6
116
66
2
68
Hasintha Gunawickrema
(4)
12
1
13
-
-
-
Denis Hall
105
6
111
105
3
108
Heather Jackson
110
4
114
104
-
104
Philip Moore
(5)
133
5
138
133
1
134
Sarah Whitney
(6)
22
3
25
80
1
81
1,013
40
1,053
998
12
1,010
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 123
Remuneration in the Society
Our Reward principles and aims
Our Board Remuneration Committee does not
consult colleagues on remuneration policy for
Directors, but it does take into consideration
remuneration arrangements for the wider population
in the Society when determining executive
remuneration. A set of fair pay principles has been
developed taking into consideration the views of
colleagues from across the Society and these
underpin the Society’s current and future reward
strategies.
The Society has wellbeing at the forefront of its
culture and continues to support colleagues
physically, mentally and financially. Our reward
platform, ‘Select’, which is used by all colleagues,
builds awareness and enables personalisation and
choice of the benefits on offer. One of the many
features is a total reward statement allowing an
individual to understand how their package is
constructed and understand the full value when all
elements of remuneration are included.
Cascade of remuneration in the Society
All employees of the Society receive base pay and
benefits consistent with market practice and are
eligible to participate in the Society’s pension plan
and in the incentive arrangements relevant to their
role. Members of the Group Executive Committee
and other selected senior managers may be eligible
to participate in the SVPA on the same terms as the
executive directors, subject to the discretion of the
Group Chief Executive and the Committee. The
award size for these individuals may be lower than
for the executive directors.
A variable pay arrangement for all colleagues
(excluding those in the SVPA) is in place, so that
everyone employed by the Society will have the
opportunity to share in the Society’s success. The
key measures for the scheme are aligned with those
that apply for senior management.
Basic Package
Executive Leaders Colleagues
Base Salary
✓ ✓ ✓
Annual Bonus
✓ ✓ ✓
Pension
✓ ✓ ✓
Life Cover
✓ ✓ ✓
Group Income Protection
✓ ✓ ✓
Private Medical Insurance
✓ ✓ ✓
Company Sick Pay
✓ ✓ ✓
Annual Health Check
✓
Other Benefits
✓ ✓ ✓
How does executive remuneration for 2024 align with the wider organisation?
The table below summarises colleague participation by seniority in the Society’s range of remuneration
programmes:
Average Pay Increase
Year on year
change
Average Bonus Award
Year on year
change
1 Jan 2024
1 Jan 2023
2024 2023
Group Chief Executive
4.00% - +4% 39.3% 33.8% +5.5%
Executive Directors
4.00% 6.00% -2% 37.4% 34.7% +2.7%
Other Executive
Committee Members
4.40% 15.00% -10.6% 34.8% 32.3% +2.5%
Senior Leaders
5.15% 6.5% -1.35% 19.9% 20.5% -0.6%
Other Colleagues
5.02% 6.0% -0.98% 9.2% 9.6% -0.4%
Performance & Strategy Governance Financial Statements
Other Information
In 2023, some members of the Group Executive Committee took on extended responsibilities across the Group,
therefore receiving higher than average pay increases.
Skipton Group Annual Report & Accounts 2024 124
CEO Pay Ratio
In line with the regulatory requirements of listed companies, the Board has agreed to voluntarily publish the
CEO pay ratio for the Society only. Given the diversity of the wider Skipton Group, the Society measure is
deemed to be more appropriate as it provides a more meaningful comparison with our peers in financial
services.
For the purposes of this year’s disclosure, the pay ratio calculation uses the Society’s April 2024 gender pay
gap data to identify the three appropriate colleagues for comparison with the CEO. This methodology is
referred to as ‘Option B’. This data is used to identify the best equivalent for three colleagues whose hourly
rates of pay are at the 25
th
, 50
th
and 75
th
percentiles for the Group and their total pay and benefits figure for
2024 is then calculated. A sample of colleagues with hourly pay rates either side of the initially identified
individuals are also reviewed to ensure that the appropriate representative colleagues are selected.
The table below sets out the total remuneration of the Group Chief Executive and the total remuneration of
employees who sit at the 25th, 50th and 75th percentiles for the Society.
Notes
1. As recognised by the BEIS, those companies with multiple subsidiaries and payrolls can opt to use Option B.
2. Ratio 1 includes a buy-out awarded to the incoming Group Chief Executive.
3. Ratio 2 excludes a buy-out awarded to the incoming Group Chief Executive.
4. Employee data includes full time equivalent total remuneration for Society employees as at 31 December 2023.
The CEO pay ratio for 2023/24 has seen a decrease year on year. Median total remuneration across the
Society has increased by 15.2%, versus an increase of 9% for the Group Chief Executive.
The total remuneration and salary values for the 25
th
, 50
th
(median) and 75
th
percentile employees in 2024 are:
Year
Method
(1)
25
th
percentile
pay ratio
Median
pay ratio
75
th
percentile
pay ratio
2021 Ratio
Option B 54:1 38:1 22:1
2022 Ratio 1
(2)
Option B 74:1 55:1 39:1
2022 Ratio 2
(3)
Option B 29:1 21:1 15:1
2023 Ratio
(4)
Option B 35:1 27:1 19:1
2024 Ratio
Option B 36:1 26:1 18:1
Gender pay data
25
th
percentile
pay ratio
Median
pay ratio
75
th
percentile
pay ratio
Salary (£)
27,549 38,548 54,047
Total Remuneration (£)
30,054 42,053 58,961
Material Risk Takers (MRT)
Material risk takers are those colleagues whose professional activities have a material impact on the Society’s
risk profile. In accordance with regulations, we have identified MRTs in the Society and in the Group subsidiary
companies who are in scope of the PRA and FCA regulations.
The Board Remuneration Committee is responsible for approving remuneration policies, maintaining oversight
of the remuneration of MRTs and for ensuring that remuneration is paid to them in accordance with regulatory
requirements.
Details of the MRTs’ remuneration arrangements for 2024 are included in the Pillar 3 document which is
available at skipton.co.uk/about-us/pillar-3-disclosure.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 125
Base Salary
The Committee approved a pay award of 3% for the
executive directors which will be effective from 1
January 2025. The average increase across the
wider workforce is 3%.
Following a review by our independent remuneration
advisors, and consideration of external market
benchmarks, the Committee has awarded the Chair
a fee increase of 11.5%. Effective 1 January 2025,
the Chair will receive an annual fee of £290,000. The
increase in fees for the non-executive directors is in
line with the Society pay increase of 3%.
Single Variable Pay Arrangement (SVPA)
The maximum bonus opportunity will remain 50% of
base salary, with the target opportunity 30% of base
salary. Malus and clawback provisions apply.
The performance measures included in the SVPA
have been reviewed for 2025 to maintain a clear link
between the bonus plan and how it supports and re-
enforces business strategy. The measures and
weightings for the 2025 SVPA are set out in the table
below. The targets set and the extent of their
achievement will be disclosed in the 2025 Annual
Report as the Board Remuneration Committee
considers them to be commercially sensitive at this
point in time.
Performance Measures
Group CEO and
Group CFO
Other EDs
Financial
Adjusted Group PBT
17.5% -
Adjusted Society PBT
17.5% 35.0%
Society Admin Expenses
10.0% 10.0%
Financial : total weighting
45.0% 45.0%
Customer & Colleague
Society net customer satisfaction
15.0% 15.0%
Colleague Engagement (eNPS Peakon)
5.0% 5.0%
Customer & colleague: total weighting
20.0% 20.0%
ESG
Diversity & Inclusion
– Ethnicity
Diversity & Inclusion
– Women in Finance
5.0% 5.0%
ESG: total weighting
5.0% 5.0%
Personal objectives
Personal objective / performance
– what? 15.0% 15.0%
Personal objective / performance
– how? 15.0% 15.0%
Personal objectives: total weighting
30.0% 30.0%
With the new LTIP awards meeting the regulatory requirements in relation to deferral, SVPA awards will be paid
upfront. They will be split 50/50 between cash and contingent cash (an instrument that pays out in full so long
as the CET1 capital ratio of the Society does not fall below a specified percentage). The cash portion will be
paid shortly after performance assessment. The contingent cash portion will be subject to a 12-month
retention period, while this continues to be a regulatory requirement.
Statement of implementation of Remuneration Policy in 2025
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 126
Long Term Incentive Plan
Subject to achievement of satisfactory performance over the 2024 performance year, it is intended that the
first LTIP awards will be made at 75% of base salary, . The performance measures proposed for the first 2025
award of the LTIP are as follows:
The LTIP awards will be deferred in their entirety and delivered wholly in contingent cash (an instrument that
pays out in full so long as the CET1 capital ratio of the Society does not fall below a specified percentage). The
awards will vest in line with regulatory requirements. A 12-month retention period will follow each vesting, to
the extent this continues to be required by regulation.
Performance Measures Executive Directors
Financial
Adjusted Group profit after tax
40%
Growth in mortgage balances
30%
Non
-financial
Basket of strategic milestones (linked to
Corporate Plan)
20%
Risk scorecard
10%
Statement of implementation of Remuneration Policy in 2025
Performance & Strategy Governance Financial Statements
Other Information
The Committee and its advisers
The members of the Board Remuneration Committee
are all independent non-executive directors of the
Society and include members of the Board Risk,
Board Audit and Board Change Committees:
• Steven Davis, Non-Executive Director (Chair)
• Heather Jackson, Non-Executive Director (Chair
of the Board Change Committee and member of
the Board Risk Committee)
• Mark Lund, Non-Executive Director (member of
the Board Audit Committee)
In addition to Committee members, regular
attendees at Committee meetings include the Group
Chief People Officer, the Group Secretary and
General Counsel, and PwC, our independent external
consultants. The Group Chair has a standing
invitation to all meetings of the Committee. The
Group Chief Executive, Group Chief Risk Officer and
the Director of Reward and Governance attend
meetings by invitation. The Committee met 10 times
in 2024.
The purpose of the Board Remuneration Committee
• To determine, on behalf of the Board, the Directors’ Remuneration Policy
• Ensure that remuneration arrangements support and encourage desired behaviours and culture
• Maintain policies which are compliant with applicable governing laws and regulations and aligned, where
appropriate, to the remuneration expectations of the PRA and FCA and those set out in the UK Corporate
Governance Code
• Ensure appropriate governance of remuneration practices across the Skipton Group, which is defined as
Skipton Building Society and its subsidiary undertakings, including the following key businesses:
Connells, SBF, SIL, and Jade; and to exercise effective oversight of these
• Ensure that remuneration policies, principles and practices are appropriate, market competitive,
compelling to new hires and fair and equitable to existing colleagues, to enable the Group to attract,
retain and reward people with the right skills experience, knowledge and behaviours to support
achievement of the Group’s strategic objectives and the successful delivery of its long-term strategy and
to promote long-term sustainable success.
Skipton Group Annual Report & Accounts 2024 127
Amongst its other duties, the Committee specifically:
• Determines and agrees on behalf of the Board,
the remuneration policies and principles of the
Society, ensuring alignment to the business
strategy, risk profile, corporate values, regulatory
requirements and the long-term interests of the
Society and its members.
• Provides adequate oversight arrangements to
ensure policies are operating as intended.
• Works closely with the Board Audit and Board
Risk Committees to ensure that the Remuneration
Policy promotes sound and effective risk
management.
• Maintains an effective risk adjustment policy and
process which takes into account the Board Risk
appetite, capital and liquidity levels and ensures
remuneration levels reflect overall performance.
• Assesses with regard to variable pay the
achievement of performance targets and the
need for ex-ante or ex-post risk adjustments,
including the application of malus and clawback
arrangements.
• Determines and agrees remuneration for the
Chair of the Society Board and Society executive
directors which shall be subject to the
Remuneration Principles.
• Oversees the remuneration of the senior officers
in the Risk and Compliance functions.
• Receives recommendations from the Group Chief
Executive for approval of the remuneration for
senior executives which shall be subject to the
Remuneration Principles.
• Determines the policy, term, objectives and
content of Society executive directors’ and
Society senior executives’ service contracts to
ensure they remain aligned to the Committee’s
overarching Remuneration Policy, regulatory
requirements, and good practice guidance.
• Reviews any proposed remuneration structures or
pay proposals which fall outside the parameters
of the agreed Remuneration Principles.
The Committee ensures that clear remuneration
principles for the Society and its subsidiaries are set
and agreed annually. For the PRA and FCA regulated
businesses, the principles set out appropriate
standards for remuneration design, governance, risk
management, and, where applicable, remuneration
for MRTs. The Group Chief Risk Officer updates the
Committee on risk related matters and provides
information and insight as part of the risk
adjustment process.
The full terms of reference of the Board
Remuneration Committee and the Remuneration
Principles are available on request from the Group
Secretary and General Counsel. The terms of
reference are also available online at
skipton.co.uk/about-us/governance.
Independent Advisers
PwC were appointed as independent external
consultants by the Committee in 2015 following a
review of potential advisers. PwC is a signatory to
the voluntary Code of Conduct in relation to
remuneration in the UK. During the year, PwC have
supported the Committee on a range of items
advising on regulatory reporting and risk adjustment,
carrying out the non-executive directors
benchmarking exercise, advising on the Long-Term
Incentive Plan and on executive director
remuneration. The Committee is satisfied that the
advice received is objective and independent. PwC’s
fees in respect of remuneration services provided in
2024 were £191,485 (net of VAT).
In addition to remuneration, PwC provide other
services to the Society such as accounting, internal
audit, and tax advice.
Statement of voting at the 2024 AGM
The Committee has, for a number of years, invited
members to vote (on an advisory basis) on the
Remuneration Policy every 3 years and annual
Remuneration Report every year, and takes member
feedback into account when determining policy and
outcomes.
Our Directors’ Remuneration Report for the year
ending 31 December 2023 received strong support
at the AGM held in April 2024, the results of which
were as follows:
We will be seeking an advisory vote on the Directors’
Remuneration Report for the year ended 31
December 2024 and the updated Directors’
Remuneration Policy at the AGM to be held in April
2025.
I would like to thank members for their ongoing
support and encourage you to vote in favour of both
resolutions.
Steven Davis
Chair of the Board Remuneration Committee
25 February 2025
Performance & Strategy Governance Financial Statements
Other Information
Votes For Votes Against Votes Withheld
57,427 (91.9%) 5,061 (8.1%) 1,490
S Davis
Skipton Group Annual Report & Accounts 2024 130
Performance & Strategy Governance Financial Statements
Other Information
Opinion
We have audited the financial statements of Skipton Building Society (the ‘Society’) and its subsidiaries
(together, the ‘Group’) for the year ended 31 December 2024 which comprise:
Group
Society
December 2024
Statement of Financial Position as at 31 December
2024
Consolidated Income Statement for the year ended 31
December 2024
Income Statement for the year ended 31 December
2024
Consolidated Statement of Comprehensive Income for
the year ended 31 December 2024
Statement of Comprehensive Income for the year
ended 31 December 2024
Consolidated Statement of Changes in Member
Interests for the year ended 31 December 2024
Statement of Changes in Member Interests for the
year ended 31 December 2024
Consolidated Statement of Cash Flows for the year
ended 31 December 2024
Statement of Cash Flows for the year ended 31
December 2024
Related notes 1 to 48 to the financial statements,
including material accounting policy information
Related notes 1 to 48 to the financial statements
including material accounting policy information
Information in respect of Country by Country Reporting on pages 295
– 296
Information identified as “audited” within the Directors’ Remuneration Report
and information identified as
forming part of the audited accounts in the Annual Business Statement
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted
international accounting standards.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities
for the audit of the financial statements section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group and the Society in accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to public
interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Society
and we remain independent of the Group and the Society in conducting the audit.
Skipton Group Annual Report & Accounts 2024 131
Performance & Strategy Governance Financial Statements
Other Information
Conclusions relating to going concern
In auditing the financial statements, we have
concluded that the Directors’ use of the going
concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation
of the Directors’ assessment of the Group and
Society’s ability to continue to adopt the going
concern basis of accounting included the following
procedures:
• We obtained the Directors’ going concern
assessment, including the cash flow forecasts for
the going concern period covering the 12 months
from the date of signing this audit opinion.
• We compared the budgeted financial information
with historical actual results, in order to form a
view on the reliability of the forecasting process.
• We assessed the results of the Directors’ stress
testing including consideration of principal and
emerging risks, on funding, liquidity and
regulatory capital.
• We considered whether there were other events
subsequent to the balance sheet date which
could have a bearing on the going concern
conclusion.
• We reviewed regulatory correspondence and
committee and board meeting minutes to identify
events or conditions that may impact the Group
and Society’s ability to continue as a going
concern.
• We reviewed the Group and Society’s going
concern disclosures included in the annual report
in order to assess that the disclosures were
appropriate and in conformity with the reporting
standards.
Based on the work we have performed, we have not
identified any material uncertainties relating to
events or conditions that, individually or collectively,
may cast significant doubt on the Group and
Society’s ability to continue as a going concern for a
period of 12 months from when the financial
statements are authorised for issue.
In relation to the Group and Society’s reporting on
how they have applied the UK Corporate Governance
Code, we have nothing material to add or draw
attention to in relation to the Directors’ statement in
the financial statements about whether the Directors
considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the
Directors with respect to going concern are
described in the relevant sections of this report.
However, because not all future events or conditions
can be predicted, this statement is not a guarantee
as to the Group and Society’s ability to continue as a
going concern.
Overview of our audit approach
Audit scope
• We performed an audit of the complete financial information of two components,
audit procedures on specific balances for a further eight components, and
centralised procedures on financial control and reporting, derivative financial
instruments and hedge accounting, defined benefit pension schemes, information
technology and taxation
Key audit matters
• Measurement of loan impairment relating to retail and commercial mortgages
• Fair value of the equity release portfolio
• Revenue recognition in respect of estate agency income
• Impairment of estate agency right of use of branch assets
Materiality
• Overall Group materiality of £15.9m which represents 5% of PBT.
An overview of the scope of the Society and the Group audits
Tailoring the scope
In the current year our audit scoping has been updated to reflect the new requirements of ISA (UK) 600
(Revised). We have followed a risk-based approach when developing our audit approach to obtain sufficient
appropriate audit evidence on which to base our audit opinion. We performed risk assessment procedures,
with input from our component auditors, to identify and assess risks of material misstatement of the Group
financial statements and identified significant accounts and disclosures. When identifying components at
which audit work needed to be performed to respond to the identified risks of material misstatement of the
Group financial statements, we considered our understanding of the Group and its business environment, the
potential impact of climate change, the applicable financial framework, the group’s system of internal control
at the entity level, the existence of centralised processes, applications and any relevant internal audit results.
Skipton Group Annual Report & Accounts 2024 132
The scoping for the current year is as follows:
Performance & Strategy Governance Financial Statements
Other Information
Component
Scope
Key locations
Skipton Building Society
Full
United Kingdom
Connells Limited
Full
United Kingdom
Skipton International Limited
Specific
Channel Islands
Skipton Business Finance Limited
Specific
United Kingdom
Skipton Covered Bonds Limited Liability
Partnership
Specific
United Kingdom
Darrowby No.5 PLC
Specific
United Kingdom
Darrowby No.6 PLC
Specific
United Kingdom
Skipton Group Holdings Limited
Specified
Procedures
United Kingdom
Jade Software Corporation Limited
Specified
Procedures
New Zealand, United Kingdom
Skipton Investments Limited
Specified
Procedures
United Kingdom
We determined that centralised audit procedures can be performed across the identified components in the
following key audit areas: financial control and reporting, derivative financial instruments and hedge
accounting, defined benefit pension schemes, information technology and taxation.
Key audit area on which procedures were performed centrally
Component subject to central procedures
Financial control and reporting
All components
Derivative financial instruments and hedge accounting
All relevant components (Skipton Building
Society, Skipton International Limited,
Skipton Covered Bonds Limited Liability
Partnership, Darrowby No.5 PLC, Darrowby
No.6 PLC)
Defined benefit pension schemes
Connells Limited (for one scheme held
within this component)
Information technology
All components except Connells Limited,
Skipton International Limited, Jade
Software Corporation Limited
Taxation
All components except Skipton
International Limited
Fees and commissions receivable
Jade Software Corporation Limited
We identified two components as individually relevant
to the Group due the identified risks of material
misstatement of the group financial statements being
associated with the reporting components and the
financial size of the component relative to the Group.
For those individually relevant components, we
identified the significant accounts where audit work
needed to be performed at these components by
applying professional judgement, having considered
the group significant accounts on which centralised
procedures will be performed, the reasons for
identifying the financial reporting component as an
individually relevant component and the size of the
component’s account balance relative to the group
significant financial statement account balance.
We then considered whether the remaining group
significant account balances not yet subject to audit
procedures, in aggregate, could give rise to a risk of
material misstatement of the group financial
statements. We selected eight components of the
group to include in our audit scope to address these
risks.
Having identified the components for which work will
be performed, we determined the scope to assign to
each component.
Skipton Group Annual Report & Accounts 2024 133
Of the ten components selected, we designed and
performed audit procedures on the entire financial
information of two components (“full scope
components”). For five components, we designed
and performed audit procedures on specific
significant financial statement account balances or
disclosures of the financial information of the
component (“specific scope components”). For the
three remaining in-scope components, we performed
specified audit procedures to obtain evidence for the
relevant assertions.
We performed full scope audit procedures over all
key audit matters.
The audit procedures in respect of the following key
audit matters were performed by the Group audit
team:
• Measurement of loan impairment relating to retail
and commercial mortgages;
• Fair value of the equity release portfolio
Audit procedures over the following key audit
matters were performed by the Connells Limited
component audit team:
• Revenue recognition in respect of estate agency
income
• Impairment of estate agency right of use of
branch assets
The Group audit team’s involvement with the
Connells Limited component team and procedures
performed included:
• Risk assessment procedures and determining the
type and extent of work to be undertaken at each
of the components;
• Regular interactions throughout the course of the
audit, including planning meetings, maintaining
regular communications on the status, and
meetings on results and conclusions;
• Undertaking component site visits as necessary;
and
• Reviewing key working papers and taking
responsibility for the scope and direction of the
audit process
Involvement with component teams
In establishing our overall approach to the Group
audit, we determined the type of work that needed to
be undertaken at each of the components by us, as
the Group audit engagement team, or by component
auditors operating under our instruction.
The Group audit team continued to follow a
programme of planned visits that has been designed
to ensure that the Senior Statutory Auditor visited
component teams and held meetings with them to
discuss the audit approach and any issues arising
from their work. During the current year’s audit cycle,
visits were undertaken by the Group audit team to
the component teams in the Channel Islands and
United Kingdom, as well as a schedule of planned
meetings held remotely. This schedule involved
meeting with local management, attending planning
and closing meetings, and reviewing relevant audit
working papers on risk areas. The Group audit team
interacted regularly with the component teams
where appropriate during various stages of the audit,
reviewed relevant working papers and were
responsible for the scope and direction of the audit
process. Where relevant, the section on key audit
matters details the level of involvement we had with
component auditors to enable us to determine that
sufficient audit evidence had been obtained as a
basis for our opinion on the Group as a whole.
This, together with the additional procedures
performed at Group level, gave us appropriate
evidence for our opinion on the Group financial
statements.
Climate change
Stakeholders are increasingly interested in how
climate change will impact Skipton Building Society.
The Group and the Society has determined that the
most significant future impacts from climate change
on their operations will be from physical and
transitional risks. These are explained on pages 32 -
38 in the Strategic Report. The Group and Society
have also explained their climate commitments on
page 34 of that report. All of these disclosures form
part of the “Other information,” rather than the
audited financial statements. Our procedures on
these unaudited disclosures therefore consisted
solely of considering whether they are materially
inconsistent with the financial statements or our
knowledge obtained in the course of the audit or
otherwise appear to be materially misstated, in line
with our responsibilities on “Other information”.
In planning and performing our audit we assessed
the potential impacts of climate change on the
Group and Society’s business and any consequential
material impact on its financial statements.
The Group and Society have explained in note 1 to
the Annual Report and Accounts how they have
reflected the impact of climate change in their
financial statements including how this aligns with
their commitment to long-term net zero targets.
Significant judgements and estimates relating to
climate change are included in note 1 and note 43.
These disclosures also explain where governmental
and societal responses to climate change risks are
still developing, and where the degree of certainty of
these changes means that they cannot be taken into
account when determining asset and liability
valuations under the requirements of UK adopted
international accounting standards.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 134
Performance & Strategy Governance Financial Statements
Other Information
Our audit effort in considering the impact of climate
change on the financial statements was focused on
evaluating Directors’ assessment of the impact of
climate risk, physical and transitional, the Group’s
climate commitments, the effects of material climate
risks and the significant judgements and estimates
disclosed in note 1 and whether these have been
appropriately reflected in asset values where these
are impacted by future cash flows and associated
sensitivity disclosures, and in the timing and nature
of liabilities recognised, following the requirements
of UK adopted international accounting standards.
As part of this evaluation, we performed our own risk
assessment, supported by our climate change
internal specialists, to determine the risks of material
misstatement in the financial statements from
climate change which needed to be considered in
our audit.
We also challenged the Directors’ considerations of
climate change in their assessment of going concern
and viability and associated disclosures.
Based on our work, whilst we have not identified the
impact of climate change on the financial
statements to be a standalone key audit matter, we
have considered the impact on the following key
audit matter: Measurement of loan impairments
relating to retail and commercial mortgages. Details
of the impact, our procedures and findings are
included in our explanation of key audit matter
below.
Key audit matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in
our audit of the financial statements of the current
period and include the most significant assessed
risks of material misstatement (whether or not due
to fraud) that we identified. These matters included
those which had the greatest effect on: the overall
audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement
team. These matters were addressed in the context
of our audit of the financial statements as a whole,
and in our opinion thereon, and we do not provide a
separatee opinion on these matters.
The following risks have been identified as key audit
matters.
Measurement of loan impairments relating to retail and commercial mortgages
Risk
(Group
– 31 December 2024 £19.6m, 31 December 2023 £39.6m;
Society
– 31 December 2024 £17.5m, 31 December 2023 £36.9m)
The measurement of the loan impairment provision under IFRS 9 is subjective and requires the Directors to
exercise judgement with regards to estimating future losses that the Society may incur within the retail and
commercial mortgage books. This calculation is complex and subjective due to the high uncertainty
associated with the assumptions used. This includes the impacts of the continuing uncertain geopolitical
and economic outlook. As a result, there is a need for the Directors to exercise judgement and perform
assessments to consider whether these risks are appropriately captured through models or should be
captured through the recording of post model adjustments.
Key judgements and estimates include:
• Completeness and valuation of post-model adjustments.
• Identifying assets that have experienced a significant increase in credit risk (SICR) since origination
(stage 2) and those that are credit impaired (stage 3).
• Accounting interpretations, collateral valuations and modelling assumptions used to build the models
and calculate the ECL.
• The application of multiple economic scenarios, including the appropriate weightings for the various
scenarios.
Due to the degree of judgement that needs to be exercised by the Directors around the key assumptions into
the Society’s ECL model as well as the complexity of the calculation, this was considered a key audit matter.
Skipton Group Annual Report & Accounts 2024 135
Performance & Strategy Governance Financial Statements
Other Information
Measurement of loan impairments relating to retail and commercial mortgages (continued)
Our response to the risk
We gained an understanding of the Society’s processes, controls and assumptions used in the impairment
process in order to evaluate the compliance of the Society’s methodology with the requirements of IFRS 9.
Our substantive audit procedures over the residential and commercial IFRS 9 provision models included
assessing the appropriateness of model design and the calculations used, challenging and substantiating
key assumptions, such as: definition of default, probability of default (PD), loss given default (LGD),
significant increases in credit risk (SICR) and the staging applied, forward looking assumptions, and the
determination of lifetime PDs.
We tested the assumptions, inputs and model calculations used in a risk
-based sample of ECL models with
the involvement of our internal credit modelling specialists. This included assessing the appropriateness of
the model design, model performance and ECL replication testing.
We performed testing over completeness and accuracy of data used in the ECL models and calculation by
reconciling, and performing sample tests of key data fields used in the model, to source data and
corroborative evidence.
With the support from our internal valuation specialists, we independently challenged the valuation of
collaterals for a sample of commercial loans at the balance sheet date and considered assumptions about
future recoverability.
We assessed the Society’s staging criteria and independently reperformed staging on a sample of loans in
stages 1, 2 and 3 for commercial loans and on the full population of residential loans to verify whether they
were allocated appropriately, with reference to the Society’s SICR criteria.
We assessed the base case and alternative economic scenarios adopted by the Directors utilising economic
specialists. We challenged the probability weightings ascribed to the scenarios and compared them to other
scenarios from a variety of external sources, as well as EY internally developed forecasts. With the
assistance of economics specialists, we assessed whether forecast macroeconomic variables, were
reasonably captured within the loan loss provision.
With our credit modelling specialists, we assessed the completeness and valuation of post model
adjustments using our knowledge and experience across the UK lending sector and tested material
adjustments for reasonableness of estimation with reference to observable market data.
We also assessed a sample of individual loans classified as performing loans, where no specific provision
was held to determine whether their stage classification was appropriate.
Our procedures included a series of “stand back” analyses, including industry benchmarking, internal
consistency checks and analytical reviews.
Key observations communicated to the Board Audit Committee
We are satisfied that the ECL provisions were reasonable and recognised in accordance with IFRS 9. We
highlighted the following matters to the Board Audit Committee that contributed to our overall conclusion:
•
Results of our testing of models, model assumptions, the key data elements used for ECL calculation,
including the reasonableness of the macroeconomic variables, scenarios and weightings used.
•
Accuracy of staging and the reasonableness of management’s staging criteria, and our independent
sensitivity analysis on the staging criteria to assess appropriateness.
•
Reasonableness and adequacy of the post-model adjustments recorded to reflect risk in the portfolios.
•
Individually assessed impairments, the overall reasonableness of the provisions, including assumptions
applied.
Skipton Group Annual Report & Accounts 2024 136
Performance & Strategy Governance Financial Statements
Other Information
Fair value of equity release portfolio
Risk
(Group and Society
– 31 December 2024 £277.2m, 31 December 2023 £293.3m)
The Society holds three equity release mortgage portfolios that carry a no negative equity guarantee. This
guarantee limits the Society’s maximum return to the value of the relevant customer’s property on
redemption. The Society is therefore exposed to potential losses on the portfolio, albeit any loss is limited in
part by a further guarantee provided to the Society by a third party. The Society uses equity release swaps to
economically manage the interest rate risk and reduce overall income statement volatility that would
otherwise result from changes in the fair value of the equity release mortgage portfolio.
The fair value of the equity release portfolio is determined using a complex model which uses a Monte Carlo
simulation and a number of different judgmental assumptions to derive an estimated value. Two of the
equity release swaps are also valued using a Monte Carlo based model. The key assumptions used in the
models include:
• Discount rates, including illiquidity premia.
• Mortality rates.
• Future increases in house prices (‘HPI’).
• Prepayment rates
Due to the degree of judgement that needs to be exercised by the Directors around the key assumptions into
the valuation model, and the complexity of the calculation, this was considered a key audit matter.
Our Response to the risk
We gained an understanding of the Society’s processes, controls, assumptions used in the valuation of the
equity release portfolio. We assessed the Society’s accounting policies and methodologies related to the
fair value of the equity release portfolio and the corresponding swaps for compliance with applicable
accounting standards.
With support from our valuation specialists, we assessed the appropriateness of the valuation techniques
and independently calculated a range of fair values for the equity release portfolio. We compared the
modelled fair values against this range. Our valuation specialists assessed the valuation methodologies
used in relation to the swaps, and independently calculated a range of fair values.
We challenged assumptions used in the fair value models, including the discount rate, mortality rates, future
changes in house prices and prepayment rates. We compared assumptions applied in the fair value models
to the Society’s historical experience and benchmarked assumptions to observable market data where
applicable.
We performed testing over the completeness and accuracy of data used in the equity release models and
underlying calculations. This involved testing a sample of key data fields used in the model to source data
and corroborative evidence.
Key observations communicated to the Board Audit Committee
We consider that the valuation of the portfolio was reasonable. We highlighted to the Board Audit
Committee the following matters which were relevant to our conclusion:
• Reasonableness of the models used to calculate the fair value of the equity release portfolio and
associated swaps.
• Reasonableness of key assumptions deployed in the valuation of the equity release portfolio and
corresponding swap models in the context of the portfolio and current market conditions.
Skipton Group Annual Report & Accounts 2024 137
Performance & Strategy Governance Financial Statements
Other Information
Revenue recognition in respect of estate agency income
Risk
(Group
– 31 December 2024 £1,056.2m, 31 December 2023 £936.6m)
There is a risk that management may override controls and post manual journals in order to overstate
revenue. This risk is specific to manual revenue journals posted during the financial year within the estate
agency revenue streams which are material to the Group.
Given the manual nature and volume of revenue transactions in the Connells Limited estate agency
component, this was considered a key audit matter.
Our Response to the risk
We gained an understanding of the Group’s processes and controls relevant to the recognition of estate
agency income. We assessed the Group’s accounting policy for estate agency income for compliance with
IFRS 15.
We performed cut off testing on a sample of transactions falling either side of the 31 December 2024 year
end date.
We performed data analysis procedures to assess the recognition of revenue throughout the year. We
performed testing over significant revenue streams using either data analysis tools or alternative
substantive procedures. Where we used data analysis tools, we tested the correlation of revenue to trade
receivables and cash receipts to verify the occurrence of revenue. Our alternative substantive procedures
included tracing from origination of revenue through to the general ledger to assess whether the revenue
was appropriately recorded in the correct period and at the correct value.
We performed testing over a sample of manual journal entries recorded for each significant revenue stream.
We substantiated these journals to supporting documentation and validated that revenue recognition
criteria had been fulfilled and that values were materially correct.
Key observations communicated to the Board Audit Committee
We concluded that the estate agency income recognised by the Group was reasonably measured. We
communicated to the Board Audit Committee the following matters which were relevant to our conclusion:
• We identified a correlation of transactions between revenue, trade receivables and cash.
•
We did not identify any evidence of material misstatements in the revenue recognised or any instances of
management override.
Skipton Group Annual Report & Accounts 2024 138
Performance & Strategy Governance Financial Statements
Other Information
Impairment of estate agency branch right of use assets
Risk
(Total right of use assets, Group: 31 December 2024
– £90.4m; 31 December 2023 - £100.9m)
Right of use assets are assessed for impairment by the Directors at each reporting date.
There is a risk that the impairment related to right of use assets is incorrectly measured due to inaccurate
assessment of impairment indicators.
Due to the year on year volatility in profitability of the Connells Limited component, we considered that
impairment risk is most prevalent in the estate agency business given the significant value of right of use
assets held within that component.
Our Response to the risk
We gained an understanding of the Group’s processes and controls relevant to the assessment for
impairment of estate agency branch right of use assets. We developed an understanding of the Group’s
accounting policy for impairment of estate agency right of use of branch assets to assess whether this was
in compliance with the requirements of accounting policies.
We challenged and validated the impairment analyses prepared by the Directors on the right of use assets.
We reviewed the cash generating units (CGUs) with indicators of impairment and obtained supporting
evidence to ascertain whether they should be impaired or not.
We challenged and validated where lossmaking branches were unimpaired, obtaining and assessing
additional evidence to corroborate the Directors’ assessments.
Key observations communicated to the Board Audit Committee
We considered that the valuation of these assets was reasonably stated. We communicated the following
matters relevant to our conclusion to the Board Audit Committee:
• Reasonableness of the valuation of these assets and the compliance of that valuation with the
requirements of applicable accounting standards.
• Reasonableness of the impairment analyses prepared by the Directors.
Skipton Group Annual Report & Accounts 2024 139
Our application of materiality
We apply the concept of materiality in planning and
performing the audit, in evaluating the effect of
identified misstatements on the audit and in forming
our audit opinion.
Materiality
The magnitude of an omission or misstatement that,
individually or in the aggregate, could reasonably be
expected to influence the economic decisions of the
users of the financial statements. Materiality
provides a basis for determining the nature and
extent of our audit procedures.
We determined materiality for the Group to be
£15.9m (2023: £17.0m), which is 5% of profit before
tax (2023: 5% profit before tax).
We determined materiality for the Society to be
£10.8m (2023: £14.2m), which is 5% of adjusted
profit before tax (2023: 5% of adjusted profit before
tax). We adjusted the Society’s pre-tax profit by
removing dividend income from shares from
subsidiary undertakings.
We believe that profit before tax (for Group) and
adjusted profit before tax (for Society) provides us
with an appropriate basis for materiality given the
users of the financial statements (including the
Society’s members and regulators) principally focus
on pre-tax profit in assessing the Group and
Society’s performance.
Performance materiality
The application of materiality at the individual
account or balance level. It is set at an amount to
reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected
misstatements exceeds materiality.
On the basis of our risk assessments, together with
our assessment of the Group’s overall control
environment, our judgement was that performance
materiality was 75% (2023: 75%) of our planning
materiality, namely £11.9m (2023: £12.7m). We
have set performance materiality at this percentage
due to our previous experience as auditors of the
Group, from which we concluded that there is a lower
expectation of material financial statement
inaccuracies due to our assessment of the financial
reporting control environment, and only minor audit
differences resulting from our prior and current year
work. Our approach is consistent with the prior year.
Audit work was undertaken at component locations
for the purpose of responding to the assessed risks
of material misstatement of the group financial
statements. The performance materiality set for
each component is based on the relative scale and
risk of the component to the Group as a whole and
our assessment of the risk of misstatement at that
component. In the current year, the range of
performance materiality allocated to components
was £2.4m to £10.3m (2023: £2.5m to £9.9m).
Reporting threshold
An amount below which identified misstatements
are considered as being clearly trivial.
We agreed with the Board Audit Committee that we
would report to them all uncorrected audit
differences in excess of £0.8m (2023: £0.8m), which
is set at 5% of planning materiality, as well as
differences below that threshold that, in our view,
warranted reporting on qualitative grounds
We evaluate any uncorrected misstatements against
both the quantitative measures of materiality
discussed above and in light of other relevant
qualitative considerations in forming our opinion.
Other information
The other information comprises the information
included in the annual report other than the financial
statements, information of Country by Country
Reporting, information identified as “audited” within
the Directors’ Remuneration Report, information
identified as forming part of the audited accounts in
the Annual Business Statement, and our auditor’s
report thereon. The Directors are responsible for the
other information contained within the annual report.
Our opinion on the financial statements does not
cover the other information and, except to the extent
otherwise explicitly stated in this report, we do not
express any form of assurance conclusion thereon.
Our responsibility is to read the other information
and, in doing so, consider whether the other
information is materially inconsistent with the
financial statements or our knowledge obtained in
the course of the audit or otherwise appears to be
materially misstated. If we identify such material
inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise
to a material misstatement in the financial
statements themselves. If, based on the work we
have performed, we conclude that there is a material
misstatement of the other information, we are
required to report that fact.
We have nothing to report in this regard.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 140
Opinion on other matters prescribed by the Building
Societies Act 1986
In our opinion:
• The Annual Business Statement and the Directors’
Report have been prepared in accordance with
the requirements of the Building Societies Act
1986;
• The information given in the Directors’ Report for
the financial year for which the financial
statements are prepared is consistent with the
financial statements; and
• The information given in the Annual Business
Statement (other than the information upon which
we are not required to report) gives a true
representation of the matters in respect of which
it is given.
Matters on which we are required to report by
exception
We have nothing to report in respect of the following
matters where the Building Societies Act 1986
requires us to report to you if, in our opinion:
• Proper accounting records have not been kept by
the Society; or
• The Group or Society’s
financial statements are
not in agreement with the accounting records; or
• We have not received all the information and
explanations and access to documents we
require for our audit.
Corporate Governance Statement
We have reviewed the Directors’ statement in relation
to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to
the Group and Society’s voluntary compliance with
the provisions of the UK Corporate Governance Code
specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit,
we have concluded that each of the following
elements of the Corporate Governance Statement
are materially consistent with the financial
statements or our knowledge obtained during the
audit:
• The Directors’ statement with regards to the
appropriateness of adopting the going concern
basis of accounting and any material
uncertainties identified set out on page 65 - 67;
• The Directors’ explanation as to its assessment of
the Society’s prospects, the period this
assessment covers and why the period is
appropriate set out on pages 66 - 67;
• The Directors’ statement on fair, balanced and
understandable set out on page 67;
• The Board’s confirmation that it has carried out a
robust assessment of the emerging and principal
risks set out on pages 51 - 52;
• The section of the annual report that describes
the review of effectiveness of risk management
and internal control systems set out on pages 79 -
80; and;
• The section describing the work of the Board
Audit Committee set out on pages 85 - 91.
Directors’ Remuneration Report
The Society voluntarily prepares a Directors’
Remuneration Report in accordance with the
provisions of the Companies Act 2006. The Directors
have requested that we audit the part of the
Directors’ Remuneration Report specified by the
Companies Act 2006 to be audited as if the Society
were a quoted company.
In our opinion, the part of the Directors’
Remuneration Report to be audited has been
properly prepared in accordance with the Companies
Act 2006.
Responsibilities of Directors
As explained more fully in the Directors’
Responsibilities Statement set out on pages 64 - 65,
the Directors are responsible for the preparation of
the financial statements and for being satisfied that
they give a true and fair view, and for such internal
control as the Directors determine is necessary to
enable the preparation of financial statements that
are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Directors
are responsible for assessing the Group and
Society’s ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern and using the going concern basis of
accounting unless the Directors either intend to
liquidate the Group or the Society or to cease
operations, or has no realistic alternative but to do
so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it
exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the
aggregate, they could reasonably be expected to
influence the economic decisions of users taken on
the basis of these financial statements.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 141
Explanation as to what extent the audit was
considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
below, to detect irregularities, including fraud. The
risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate
concealment by, for example, forgery or intentional
misrepresentations, or through collusion. The extent
to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
However, the primary responsibility for the
prevention and detection of fraud rests with both
those charged with governance of the Society and
the Directors.
• We obtained an understanding of the legal and
regulatory frameworks that are applicable to the
Group and determined that the most significant
were the regulations, licence conditions and
supervisory requirements of the Prudential
Regulation Authority (PRA), the Financial Conduct
Authority (FCA) and the Building Societies Act
1986.
• We understood how the Group is complying with
those frameworks by making enquiries of key
management, internal audit, and those
responsible for legal and compliance matters. We
also reviewed correspondence between the Group
and UK regulatory bodies, reviewed minutes of
the Board and Board Risk Committee meetings
and gained an understanding of the Group’s
approach to governance demonstrated by the
Board’s approval of the Group’s governance
framework and the Board’s review of the Group’s
Operational Risk Framework and internal control
processes.
• We assessed the susceptibility of the Group’s
financial statements to material misstatement,
including how fraud might occur by considering
the controls that the Group has established to
address risks identified by the entity, or that
otherwise seek to prevent, deter or detect fraud.
We also considered performance and incentive
plan targets and their potential to influence key
management to manage earnings or influence the
perceptions of investors and stakeholders.
• Based on this understanding we designed our
audit procedures to identify non-compliance with
such laws and regulations. Our procedures
involved inquiries of legal counsel, executive
management, internal audit, consideration of
whistleblowing events and focused testing as
referred to in the Key Audit Matters section
above. Our inquiries and procedures addressed
subsidiaries in the Group including those audited
by component teams. The Group audit team had
regular communication with component teams to
discuss the audit which included if there were any
instances of non-compliance with laws and
regulations and how these were responded to.
• The Group operates in the financial services
sector which is a highly regulated environment.
As such the Senior Statutory Auditor considered
the experience and expertise of the engagement
team to ensure that the team had the appropriate
competence and capabilities, which included the
use of specialists where appropriate.
A further description of our responsibilities for the
audit of the financial statements is located on the
Financial Reporting Council’s website at
https://www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Other matters we are required to address
• Following the recommendation from the Board
Audit Committee, we were appointed by the
Society on 10 May 2019 to audit the financial
statements for the year ending 31 December
2019 and subsequent financial periods.
• The period of total uninterrupted engagement
including previous renewals and reappointments
is six years, covering the years ending 31
December 2019 to 31 December 2024 .
• The audit opinion is consistent with the additional
report to the Board Audit Committee.
Use of our report
This report is made solely to the Society’s members,
as a body, in accordance with Section 78 of the
Building Societies Act 1986. Our audit work has been
undertaken so that we might state to the Society’s
members those matters we are required to state to
them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than
the Society and the Society’s members as a body, for
our audit work, for this report, or for the opinions we
have formed.
for and on behalf of Ernst & Young LLP , Statutory
Auditor
Edinburgh
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 143
For the year ended 31 December 2024
Group (£m) | Society (£m) | ||||
Notes | 2024 | 2023 | 2024 | 2023 | |
Interest receivable and similar income: | |||||
Accounted for using effective interest rate method | 2 | 2,056.9 | 1,740.5 | ||
Other | 2 | 26.6 | 25.1 | ||
Total interest receivable and similar income | 2 | 2,083.5 | 1,765.6 | ||
Interest payable and similar charges | 3 | ( | ( | (1,676.3) | (1,306.9) |
Net interest receivable | 407.2 | 458.7 | |||
Fees and commissions receivable | 4 | 36.0 | 34.6 | ||
Fees and commissions payable | ( | ( | (3.3) | (3.4) | |
Fair value gains on financial instruments | 5 | 12.2 | 20.7 | ||
mandatorily held at FVTPL | |||||
Income from shares in subsidiary undertakings | 36.0 | 27.0 | |||
Other operating income | 6 | 9.4 | 8.8 | ||
Total income | 497.5 | 546.4 | |||
Administrative expenses | 7 | ( | ( | (262.0) | (239.1) |
Operating profit before impairment and provisions | 235.5 | 307.3 | |||
Impairment and provisions | 8 | 10.4 | 3.4 | ||
Profit before tax | 245.9 | 310.7 | |||
Tax expense | 12 | ( | ( | (56.7) | (76.8) |
Profit for the year | 189.2 | 233.9 | |||
Attributable to: | |||||
Members of Skipton Building Society | 189.2 | 233.9 | |||
Non-controlling interests | ( | - | - | ||
Profit for the year | 233.9 |
Segmental performance of the Group is shown in Note 45.
The accompanying Notes form part of these financial statements.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 144
For the year ended 31 December 2024
Group (£m) | Society (£m) | |||
Notes | 2024 | 2023 | 2024 | 2023 |
Profit for the year | 189.2 | 233.9 | ||
Other comprehensive (expense) / income: | ||||
Items that will not be reclassified to Income Statement: | ||||
Remeasurement losses on net defined benefit | ||||
34 | ( | ( | (2.7) | (0.2) |
obligations | ||||
Gains on equity share investments designated at FVOCI | - | - | ||
Income tax on items that will not be reclassified to 38 | 0.8 | 0.1 | ||
Income Statement | ||||
Net other comprehensive expense that will not be reclassified to Income Statement | ( | ( | (1.9) | (0.1) |
Items that may subsequently be reclassified to Income Statement: | ||||
Cash flow hedging reserve: | ||||
Losses taken to equity | ( | ( | (35.2) | (25.5) |
Realised losses transferred to Income Statement | 45.9 | 14.1 | ||
Fair value reserve: | ||||
(Losses) / gains taken to equity | ( | (1.8) | 0.5 | |
Impairment loss allowance on debt securities held | ||||
14 | ( | - | (0.1) | |
at FVOCI | ||||
Cost of hedging reserve: | ||||
(Losses) / gains taken to equity | ( | - | - | |
Exchange differences on translation of foreign | ( | ( | - | - |
operations | ||||
Income tax on items that may be reclassified to 38 | ( | (2.5) | 3.1 | |
Income Statement | ||||
Net other comprehensive income / (expense) that may | ( | 6.4 | (7.9) | |
subsequently be reclassified to Income Statement | ||||
Other comprehensive income / (expense) | ( | 4.5 | (8.0) | |
Total comprehensive income | 193.7 | 225.9 | ||
Attributable to: | ||||
Members of Skipton Building Society | 193.7 | 225.9 | ||
Non-controlling interests | ( | - | - | |
Total comprehensive income | 193.7 | 225.9 |
The accompanying Notes form part of these financial statements.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 145
As
Group (£m) | Society (£m) | ||||
Notes | 2024 | 2023 | 2024 | 2023 | |
Assets at | |||||
Cash in hand and balances with the Bank of England | 1,930.6 | 3,266.2 | |||
Loans and advances to credit institutions | 13 | 397.8 | 497.7 | ||
Debt securities | 14 | 4,340.1 | 3,206.5 | ||
Derivative financial instruments | 743.0 | 1,003.0 | |||
Loans and advances to customers held at amortised | 15 | 28,334.9 | 25,864.9 | ||
cost | |||||
Loans and advances to customers held at FVTPL | 19 | 0.9 | 0.9 | ||
Equity release portfolio held at FVTPL | 18 | 277.2 | 293.3 | ||
Current tax asset | - | - | |||
Investments in subsidiary undertakings and joint | 20 | 509.3 | 478.1 | ||
ventures | |||||
Property, plant and equipment | 21 | 43.1 | 39.0 | ||
Right-of-use assets | 22 | 8.3 | 10.0 | ||
Deferred tax asset | 33 | 11.2 | 16.7 | ||
Other assets | 25 | 22.9 | 24.4 | ||
Intangible assets | 24 | 4.2 | 0.2 | ||
Retirement benefit surplus | 34 | 4.8 | - | ||
Total assets | 36,628.3 | 34,700.9 | |||
Liabilities | |||||
Shares | 26 | 28,254.1 | 25,922.3 | ||
Amounts owed to credit institutions | 27 | 1,800.6 | 2,302.7 | ||
Amounts owed to other customers | 28 | 1,268.9 | 807.7 | ||
Debt securities in issue | 29 | 1,930.1 | 2,242.5 | ||
Derivative financial instruments | 282.2 | 508.7 | |||
Current tax liability | 2.7 | 0.6 | |||
Lease liabilities | 30 | 8.6 | 10.3 | ||
Other liabilities | 31 | 11.0 | 19.2 | ||
Accruals and deferred income | 27.6 | 31.8 | |||
Provisions for liabilities | 32 | 5.3 | 0.6 | ||
Retirement benefit obligations | 34 | - | 15.9 | ||
Subordinated liabilities | 35 | 690.2 | 685.3 | ||
Subscribed capital | 36 | 41.6 | 41.6 | ||
Total liabilities | 34,322.9 | 32,589.2 |
Consolidated Statement of Financial Position continues on page 146.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 146
As
Group (£m) | Society (£m) | |||
Notes | 2024 | 2023 | 2024 | 2023 |
Members' interests | ||||
General reserve at 31 December 2024 | 2,314.7 | 2,127.4 | ||
Fair value reserve | ( | ( | (10.6) | (9.3) |
Cash flow hedging reserve | 1.3 | (6.4) | ||
Cost of hedging reserve | ( | ( | - | - |
Translation reserve | - | - | ||
Attributable to members of Skipton Building Society | 2,305.4 | 2,111.7 | ||
Non-controlling interests | ( | ( | - | - |
Total members' interests | 2,305.4 | 2,111.7 | ||
Total liabilities and members' interests | 36,628.3 | 34,700.9 |
The accompanying Notes form part of these financial statements.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 147
For the year ended 31 December 2024
Group | General | Fair value | Cash flow | Cost of | Translation | Sub- | Non- | |
(£m) | reserve | reserve | hedging | hedging | reserve | total | controlling | Total |
reserve | reserve | interests | ||||||
Balance at | ( | ( | ( | |||||
Profit for the year | ||||||||
Other comprehensive (expense) / income net of tax: | ||||||||
Remeasurement losses on defined benefit obligations | ( | ( | ( | |||||
Net losses from changes in fair value | ( | ( | ( | ( | ( | |||
Realised losses transferred | ||||||||
to Income Statement | ||||||||
Exchange differences on translation of foreign | ( | ( | ( | |||||
operations | ||||||||
Other comprehensive | ( | ( | ( | ( | ||||
(expense) / income | ||||||||
Total comprehensive income | ( | ( | ( | |||||
/ (expense) for the year | ||||||||
Balance at | ( | ( | ( | |||||
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 148
For the year ended 31 December 2023
Group | General | Fair value | Cash flow | Cost of | Translation | Sub- | Non- | |
(£m) | reserve | reserve | hedging | hedging | reserve | total | controlling | Total |
reserve | reserve | interests | ||||||
Balance at 1 January 2023 | ( | ( | ||||||
Profit / (loss) for the year | ( | |||||||
Other comprehensive (expense) / income net of tax: | ||||||||
Remeasurement losses on defined benefit obligations | ( | ( | ( | |||||
Net gains / (losses) from changes in fair value | ( | ( | ( | |||||
Debt securities at FVOCI: | ( | ( | ( | |||||
impairment loss allowance | ||||||||
Realised losses transferred to Income Statement | ||||||||
Exchange differences on translation of foreign | ( | ( | ( | |||||
operations | ||||||||
Other comprehensive | ( | ( | ( | ( | ( | |||
(expense) / income | ||||||||
Total comprehensive income / | ( | ( | ( | |||||
(expense) for the year | ||||||||
Acquisition of non - controlling interests without change in control | ( | ( | ||||||
Transfer of fair value reserve | ||||||||
of equity share investments | ( | |||||||
designated at FVOCI | ||||||||
Balance at 31 December 2023 | ( | ( | ( |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 149
For the year ended 31 December 2024
Society (£m)
General reserve Fair value reserve
Cash flow
hedging reserve
Total
Balance
at 1 January 2024
2,127.4
(9.3)
(6.4)
2,111.7
Profit for the year
189.2
-
-
189.2
Other comprehensive (expense) / income net of tax:
Remeasurement losses on
defined benefit obligations
(1.9)
-
-
(1.9)
Net losses from changes in
fair value
-
(1.3)
(25.3)
(26.6)
Realised losses transferred
to Income Statement
-
-
33.0
33.0
Other comprehensive
(expense) / income
(1.9)
(1.3)
7.7
(4.5)
Total comprehensive
income / (expense) for the
year
187.3
(1.3)
7.7
193.7
Balance
at 31 December
2024
2,314.7
(10.6)
1.3
2,305.4
For the year ended 31 December 2023
Society (£m)
General reserve Fair value reserve
Cash flow
hedging reserve
Total
Balance
at 1 January 2023
1,893.6
(9.6)
1.8
1,885.8
Profit for the year
233.9
-
-
233.9
Other comprehensive (expense) / income net of tax:
Remeasurement losses on
defined benefit obligations
(0.1)
-
-
(0.1)
Net gains / (losses) from
changes in fair value
-
0.4
(18.4)
(18.0)
Debt securities at FVOCI:
impairment loss allowance
-
(0.1)
-
(0.1)
Realised losses transferred
to Income Statement
-
-
10.2
10.2
Other comprehensive
(expense) / income
(0.1)
0.3
(8.2)
(8.0)
Total comprehensive income /
(expense) for the year
233.8
0.3
(8.2)
225.9
Balance
at 31 December 2023
2,127.4
(9.3)
(6.4)
2,111.7
The accompanying Notes form part of these financial statements.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 150
For the year ended 31 December 2024
Group (£m) | Society (£m) | ||||
Notes | 2024 | 2023 | 2024 | 2023 | |
Restated * | Restated * | ||||
Cash flows from operating activities | |||||
Profit before tax | 245.9 | 310.7 | |||
Adjustments for: | |||||
Impairment credits on financial instruments | 37ai) | ( | ( | (16.7) | (4.1) |
Depreciation and amortisation | 20, 21, | 8.5 | 8.1 | ||
22, 23 | |||||
Impairment of property, plant and equipment, right - | 20, 21, | ||||
of-use assets, investment property and intangible assets | 22, 23 | - | 0.2 | ||
(Profit) / loss on disposal of property, plant and equipment, investment property and intangible assets | ( | ( | 0.6 | 0.2 | |
Fair value gains on financial instruments held at FVTPL | 37aii) | ( | ( | (12.2) | (20.7) |
Interest on subordinated liabilities and subscribed | 3 | 34.1 | 27.1 | ||
capital | |||||
Interest on lease liabilities | 3 | 0.3 | 0.3 | ||
Income from shares in subsidiary undertakings | (36.0) | (27.0) | |||
Other non-cash movements | 37aiii) | ( | ( | (2.7) | 7.6 |
221.8 | 302.4 | ||||
Changes in operating assets and liabilities: | |||||
Movement in prepayments and accrued income | ( | ( | 0.7 | (2.3) | |
Movement in accruals and deferred income | (4.2) | 8.5 | |||
Movement in provisions for liabilities | ( | ( | (0.2) | (0.2) | |
Net movement in derivatives | ( | 42.9 | (136.1) | ||
Movement in loans and advances to customers | ( | ( | (2,376.0) | (2,878.6) | |
Movement in shares | 2,317.2 | 3,470.8 | |||
Net movement in amounts owed to credit | ( | ( | (41.0) | (695.5) | |
institutions and other customers | |||||
Net movement in debt securities in issue | ( | ( | (312.4) | (150.1) | |
Net movement in loans and advances to credit | 180.9 | 112.6 | |||
institutions | |||||
Net movement in other assets | ( | (0.3) | (0.4) | ||
Net movement in other liabilities | (7.7) | 9.8 | |||
Contributions to defined benefit scheme | ( | ( | (23.0) | (1.7) | |
Income taxes paid | ( | ( | (50.8) | (60.3) | |
Net cash flows from operating activities | ( | (52.1) | (21.1) |
* The information shown above for the year ended 31 December 2023 is restated to reflect the appropriate presentation for
certain non-cash movements (see Note 1c) for details).
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 151
For the year ended 31 December 2024
Group (£m) | Society (£m) | ||||
Notes | 2024 | 2023 | 2024 | 2023 | |
Net cash flows from operating activities | ( | (52.1) | (21.1) | ||
Cash flows from investing activities | |||||
Purchase of debt securities | 14 | ( | ( | (3,986.6) | (2,294.0) |
Proceeds from maturities and disposals of debt | 2,830.1 | 1,713.2 | |||
securities | |||||
Dividends received from subsidiary undertakings | 36.0 | 27.0 | |||
Increase in loans to subsidiary undertakings | 20a) | (31.2) | (8.9) | ||
Purchase of non -controlling interests | ( | - | - | ||
Other investing activities | 37bi) | ( | ( | (14.6) | (6.2) |
Net cash flows from investing activities | ( | ( | (1,166.3) | (568.9) | |
Cash flows from financing activities | |||||
Exercise of share options in subsidiary management | 31 | ( | - | - | |
incentive scheme | |||||
Exercise of put options held by non -controlling | ( | - | - | ||
shareholders | |||||
Proceeds from issue of subordinated liabilities | - | 350.0 | |||
Interest paid on subordinated liabilities and subscribed capital | ( | ( | (33.5) | (23.0) | |
Interest paid on lease liabilities | 30 | ( | ( | (0.3) | (0.2) |
Payment of lease liabilities | 30 | ( | ( | (2.3) | (2.4) |
Net cash flows from financing activities | ( | (36.1) | 324.4 | ||
Net decrease in cash and cash equivalents | ( | ( | (1,254.5) | (265.6) | |
Cash and cash equivalents at 1 January | 3,239.1 | 3,504.7 | |||
Cash and cash equivalents at 31 December | 1,984.6 | 3,239.1 | |||
Analysis of the cash balances as shown within the Statement of Financial Position: | |||||
As at 31 December 2024 | Group (£m) | Society (£m) | |||
Notes | 2024 | 2023 | 2024 | 2023 | |
Cash in hand and balances with Bank of England | 1,930.6 | 3,266.2 | |||
Mandatory reserve deposit with Bank of England * | ( | - | (106.6) | ||
1,930.6 | 3,159.6 | ||||
Loans and advances to credit institutions | 13 | 54.0 | 79.5 | ||
Cash and cash equivalents at 31 December | 1,984.6 | 3,239.1 | |||
* From 1 March 2024 the mandatory reserve deposit with the Bank of England has been replaced with a Bank of England
levy; the levy recognised by the Group and Society for the year ended 31 December 2024 is charged to the Income
Statement within the line ‘Administrative expenses’.
The accompanying Notes form part of these financial statements.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 153
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 154
Performance & Strategy Governance Financial Statements Other Information | |||
Society | Previously | Adjustments | Restated |
£m | reported | ||
Within reconciliation of ‘Net cash flows from operating activities’ | |||
Adjustments for: | |||
Fair value gains on financial instruments held at FVTPL | (9.2) | (11.5) | (20.7) |
Other non-cash movements | (15.3) | 22.9 | 7.6 |
Changes in operating assets and liabilities: | |||
Movement in fair value of derivatives | 371.7 | (507.8) | (136.1) |
Movement in fair value adjustments for hedged risk | (435.5) | 435.5 | - |
Movements in debt securities requirements of IFRS 7 out in the tables below. | (60.9) Financial Instruments – Disclosures Accounting Policies, Changes in Accounting Estimates and Errors | 60.9 | - ii) During the year ended 31 December 2024, the Group reviewed its application in prior periods of the with respect to the disclosure of undiscounted gross contractual cash flows payable on financial liabilities. This review identified material misstatements where amounts previously reported by the Group (and Society) had included certain items that were not correctly calculated in accordance with IFRS 7 requirements. This matter impacts only the table ‘analysis of undiscounted gross contractual cash flows payable on financial liabilities’ that is presented for disclosure purposes in Note 41 Liquidity Risk. There is no impact for affected periods on the Group or Society’s Income Statements, Statements of Financial Position or Statements of Cash Flows. In accordance with IAS 8 , comparative amounts are restated as set |
Skipton Group Annual Report & Accounts 2024 155
Performance & Strategy Governance Financial Statements
Other Information
Up to 3 | 3 to 12 | 1 to 5 | Over 5 | ||
Group (£m) | Total | ||||
months | months | years | years | ||
Within table ‘analysis of undiscounted gross contractual cash flows payable on financial liabilities’ | |||||
Previously reported: | |||||
Amounts owed to credit institutions, other customers and debt securities in issue | 2,542.1 | 1,987.8 | 3,299.4 | - | 7,829.3 |
Derivative financial instruments | 50.3 | 198.2 | 529.7 | 240.6 | 1,018.8 |
Adjustments: | |||||
Amounts owed to credit institutions, other customers and debt securities in issue | 48.7 | (45.1) | (134.2) | - | (130.6) |
Derivative financial instruments | (6.8) | (78.8) | (241.2) | (194.8) | (521.6) |
Restated: | |||||
Amounts owed to credit institutions, other customers and debt securities in issue | 2,590.8 | 1,942.7 | 3,165.2 | - | 7,698.7 |
Derivative financial instruments | 43.5 | 119.4 | 288.5 | 45.8 | 497.2 |
Up to 3 | 3 to 12 | 1 to 5 | Over 5 | ||
Society (£m) | Total | ||||
months | months | years | years | ||
Within table ‘analysis of undiscounted gross contractual cash flows payable on financial liabilities’ | |||||
Previously reported: | |||||
Amounts owed to credit institutions, other customers and debt securities in issue | 1,680.1 | 1,176.0 | 2,921.8 | - | 5,777.9 |
Derivative financial instruments | 58.6 | 202.7 | 586.1 | 241.2 | 1,088.6 |
Adjustments: | |||||
Amounts owed to credit institutions, other customers and debt securities in issue | 16.9 | (8.5) | (48.5) | - | (40.1) |
Derivative financial instruments | (9.2) | (69.6) | (273.3) | (195.5) | (547.6) |
Restated: | |||||
Amounts owed to credit institutions, other customers and debt securities in issue | 1,697.0 | 1,167.5 | 2,873.3 | - | 5,737.8 |
Derivative financial instruments | 49.4 | 133.1 | 312.8 | 45.7 | 541.0 |
Skipton Group Annual Report & Accounts 2024 156
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Skipton Group Annual Report & Accounts 2024 157
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Skipton Group Annual Report & Accounts 2024 158
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Skipton Group Annual Report & Accounts 2024 159
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Skipton Group Annual Report & Accounts 2024 160
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Skipton Group Annual Report & Accounts 2024 161
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Skipton Group Annual Report & Accounts 2024 162
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Skipton Group Annual Report & Accounts 2024 163
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Skipton Group Annual Report & Accounts 2024 164
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Skipton Group Annual Report & Accounts 2024 165
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Skipton Group Annual Report & Accounts 2024 166
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Skipton Group Annual Report & Accounts 2024 167
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Skipton Group Annual Report & Accounts 2024 168
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Skipton Group Annual Report & Accounts 2024 169
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Skipton Group Annual Report & Accounts 2024 170
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Skipton Group Annual Report & Accounts 2024 171
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Skipton Group Annual Report & Accounts 2024 172
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Skipton Group Annual Report & Accounts 2024 173
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Skipton Group Annual Report & Accounts 2024 174
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Performance & Strategy Governance Financial Statements Other Information | |
Skipton Group Annual Report & Accounts 2024 175 |
Skipton Group Annual Report & Accounts 2024 176
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Skipton Group Annual Report & Accounts 2024 177
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Skipton Group Annual Report & Accounts 2024 178
Performance & Strategy Governance Financial Statements | ||
Other Information | ||
Skipton Group Annual Report & Accounts 2024 179
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Skipton Group Annual Report & Accounts 2024 180
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Skipton Group Annual Report & Accounts 2024 181
As at 31 December 2024 | Note | Scenario | 2025 | 2026 | 2027 | 2028 | 2029 |
Upside | 3.50 | 3.50 | 3.50 | 3.50 | 3.50 | ||
Bank of England Base Rate (%) | A | Central | 4.00 | 3.75 | 3.75 | 3.75 | 3.75 |
Downside | 6.00 | 6.00 | 5.00 | 5.00 | 5.00 | ||
Upside | 4.0 | 4.0 | 4.0 | 4.0 | 4.0 | ||
Unemployment (%) | A | Central | 4.1 | 4.3 | 4.4 | 4.4 | 4.2 |
Downside | 6.7 | 6.0 | 6.0 | 6.0 | 6.0 | ||
Upside | 4.2 | 4.2 | 4.2 | 4.2 | 4.2 | ||
UK House price inflation (%) | B | Central | 3.0 | 3.5 | 2.5 | 3.0 | 4.0 |
Downside | (1.0) | (11.5) | (1.0) | 1.0 | 4.0 |
As at 31 December 2023 | Note | Scenario | 2024 | 2025 | 2026 | 2027 | 2028 |
Upside | 3.50 | 3.50 | 3.50 | 3.50 | 3.50 | ||
Bank of England Base Rate (%) | A | Central | 5.00 | 4.00 | 3.75 | 3.75 | 3.75 |
Downside | 5.00 | 2.50 | 2.00 | 2.00 | 2.00 | ||
Upside | 4.1 | 4.0 | 4.0 | 4.0 | 4.0 | ||
Unemployment (%) | A | Central | 4.7 | 5.0 | 5.1 | 4.7 | 4.1 |
Downside | 9.0 | 7.2 | 6.6 | 6.0 | 6.0 | ||
Upside | 4.2 | 4.2 | 4.2 | 4.2 | 4.2 | ||
UK House price inflation (%) | B | Central | (4.0) | 1.5 | 3.0 | 3.0 | 3.0 |
Downside | (15.6) | 1.9 | 4.0 | 4.0 | 4.0 | ||
Upside | 2.0 | 2.0 | 2.0 | 2.0 | 2.0 | ||
Commercial property price growth (%) Notes | C a relevant input for the revised model). | Central | (8.7) | (4.5) | 1.0 | 1.0 | 1.0 |
Downside circumstances of each account and the property in question. | (18.6) | (3.2) | 0.0 | 0.0 A. The Bank of England Base Rates and unemployment rates are the position at 31 December each year. | 0.0 B. House price inflation is the annual growth rate in each year. In addition to house price inflation, the Group’s residential impairment calculations also include a ‘forced sale discount’ reflecting the likely reduction in property price when selling a repossessed property. The forced sale discount is calculated at account level, taking into account the specific C. Commercial property price growth is the annual growth rate in each year. The Group’s views for commercial property price growth are specific to the Group’s own commercial portfolio and are not intended to reflect views for the entire UK commercial property market. Following revisions in 2024 to the Group’s commercial loan impairment model (as set out on page 177), the Group no longer requires a view of future commercial property price growth (as this metric is not |
Performance & Strategy Governance Financial Statements
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Skipton Group Annual Report & Accounts 2024 182
Other Information | ||||
Performance & Strategy Governance Financial Statements | ||||
Skipton Group Annual Report & Accounts 2024 183
Performance & Strategy Governance Financial Statements | Other Information | ||||
Skipton Group Annual Report & Accounts 2024 184
Performance & Strategy Governance Financial Statements Other Information | ||||||||||
Scenario | ECL (£m) | Share of Gross | ||||||||
2023 | Notes | weighting (%) | (Note A) | Exposures (%) | ||||||
(Note B) | ||||||||||
Upside | Central Downside | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | |||
Residential | ||||||||||
Actual probability weighted ECL | 10 | 55 | 35 | 16.2 | 6.0 | 6.8 | 29.0 | 97.7 | 2.1 | |
100% upside | 100 | - | - | 4.2 | 2.3 | 3.6 | 10.1 | 98.2 | 1.5 | |
100% central | - | 100 | - | 8.3 | 4.4 | 5.6 | 18.3 | 98.0 | 1.8 | |
100% downside | - | - | 100 | 17.6 | 10.4 | 23.7 | 51.7 | 95.7 | 4.0 | |
Commercial | ||||||||||
Actual probability weighted ECL | 10 | 55 | 35 | 0.6 | 6.6 | 1.8 | 9.0 | 67.4 | 28.0 | |
100% upside | C | 100 | - | - | 0.6 | 4.4 | 1.6 | 6.6 | 67.4 | 28.0 |
100% central | C | - | 100 | - | 0.6 | 5.7 | 1.7 | 8.0 | 67.4 | 28.0 |
100% downside Notes | C holds ECLs (see Note 1h)). according to scenario weightings. | - | - | 100 calculated for each loan based on that stage allocation. | 0.7 | 8.6 | 1.8 | 11.1 | 67.4 the share of gross exposures held in each stage does not therefore vary according to scenario weightings. | 28.0 A. For the purposes of calculating each scenario’s 100% weighted ECL, each loan is allocated to a stage by considering only that scenario. For the purposes of the actual probability-weighted ECL, each loan’s stage allocation is based on a weighted average PD (that takes account of all scenarios) and this stage allocation is held constant across the scenarios; a probability-weighted 12 month or lifetime ECL (which also takes account of all scenarios) is then B. For the purposes of this analysis, gross exposures include the off-balance sheet loan commitments for which the Group C. For the Commercial portfolio, the staging of gross exposures is driven by arrears, watchlist cases and sector factors; D. For the Commercial portfolio, the Group has applied a revised approach to assessing impairment with effect from the year ended 31 December 2024 (see page 177 for details). Under this revised approach, commercial ECLs do not vary |
Skipton Group Annual Report & Accounts 2024 185
Group (£m) | Society (£m) | ||||||
Notes | Changes to assumption | Increase / (decrease) in impairment loss allowance | |||||
2024 | 2023 | 2024 | 2023 | ||||
Downside scenario | A | Absolute increase of 10% | 0.7 | 3.5 | 0.7 | 3.3 | |
weighting | |||||||
Significant increase in credit | B | Relative reduction by 25% | 0.1 | 0.4 | 0.1 | 0.4 | |
risk criteria | |||||||
Future house price inflation | C | + / - 0.5% pa | (0.5) / 0.6 | (1.2) / 1.3 | (0.4) / 0.5 | (1.1) / 1.3 | |
Unemployment | D | + / - 0.5% pa | 0.5 / (0.4) | 2.8 / (2.3) | 0.5 / (0.4) | 2.8 / (2.3) | |
Performance & Strategy Governance Financial Statements Other Information | ||||||
Skipton Group Annual Report & Accounts 2024 186
Group (£m) | Society (£m) | |||||
Assumption | Change to current assumption | Increase in impairment allowance | ||||
2024 | 2023 | 2024 | 2023 | |||
Downside scenario weighting | Absolute increase of 10% | 0.1 | 0.1 | 0.1 | 0.1 | |
Downside scenario weighting | Increase to 100% | 1.1 | 1.2 | 1.1 | 1.1 | |
Group and Society (£m) | ||||
Assumption | Change to current assumption | (Decrease) / Increase in portfolio fair value | ||
2024 | 2023 | |||
Redemption rates | + / - 1% pa | (0.4) / 0.5 | (1.3) / 1.5 | |
Illiquidity premia | + / - 0.2% pa | (4.3) / 4.4 | (4.9) / 5.1 | |
HPI forecast | + / - 0.5% pa | 4.0 / (4.3) | 5.2 / (5.5) | |
Property volatility | + / - 1% pa | (2.6) / 2.6 | (3.0) / 3.0 | |
RPI volatility | + / - 0.5% pa | (1.0) / 0.6 | (0.9) / 0.5 |
Performance & Strategy Governance Financial Statements
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Skipton Group Annual Report & Accounts 2024 187
Group & Society (£m) | ||||
Assumption | Notes Change to current assumption | (Decrease) / increase in liability | ||
2024 | 2023 | |||
Redemption rates | A | + / - 1% pa | (0.6) / 0.6 | (2.1) / 2.3 |
RPI volatility | A | + / - 0.5% pa | (2.0) / 1.5 | (2.3) / 1.8 |
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Skipton Group Annual Report & Accounts 2024 188
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Skipton Group Annual Report & Accounts 2024 189
Other Information | ||||||
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Skipton Group Annual Report & Accounts 2024 190 |
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Skipton Group Annual Report & Accounts 2024 191 |
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2024 | 2023 The tables below provide further information regarding the nature, amount and timing of fees and | |||||
Products and | Products and | Products and fees and commissions receivable by the Group are set out in Note 1n). | Products and | |||
services | services | services | services | |||
Group (£m) | transferred | transferred | Total | transferred | transferred | Total commissions receivable. IFRS 15 requires that revenue is recognised by the Group in a way that depicts the transfer of goods or services to customers; some revenue is therefore recognised at a point in time and some revenue is recognised over a period of time. Further details as to the revenue recognition policies applied to |
at a point in | over time | at a point in | over time | |||
time | time | |||||
Mortgage origination fees | 97.8 | 0.4 | 98.2 | 46.4 | 27.6 | 74.0 |
Other mortgage related | 2.1 | - | 2.1 | 2.3 | - | 2.3 |
fees | ||||||
General insurance income | 77.5 | 1.0 | 78.5 | 84.5 | 1.0 | 85.5 |
Commissions earned on property sales | 320.4 | - | 320.4 | 275.6 | - | 275.6 |
Commissions earned on property lettings | 146.3 | 101.3 | 247.6 | 108.9 | 121.3 | 230.2 |
Commercial property | 44.3 | 47.5 | 91.8 | 44.7 | 37.4 | 82.1 |
services fees | ||||||
Survey and valuation fees | 112.0 | - | 112.0 | 93.2 | - | 93.2 |
Asset management | 20.8 | 0.2 | 21.0 | 15.3 | 0.1 | 15.4 |
commission | ||||||
Conveyancing fees | 64.6 | - | 64.6 | 56.8 | - | 56.8 |
Financial advice fees | 33.9 | - | 33.9 | 32.4 | - | 32.4 |
Software and consultancy | - | 16.8 | 16.8 | - | 19.2 | 19.2 |
fees | ||||||
Factoring and invoice | 15.5 | - | 15.5 | 14.3 | - | 14.3 |
discounting services | ||||||
Other fees and commissions | 12.6 | 0.5 | 13.1 | 10.3 | 2.4 | 12.7 |
Total fees and commissions | 947.8 | 167.7 | 1,115.5 | 784.7 | 209.0 | 993.7 |
receivable |
Skipton Group Annual Report & Accounts 2024 192 | ||||||
Performance & Strategy Governance Financial Statements
Other Information
2024 | |||||
Group (£m) presented by reportable segment in Note 45. | Society | SIL | Connells | Other^ | Total The table below provides a reconciliation of fees and commissions receivable by the Group to the amounts |
Mortgage origination fees | - | - | 100.6 | (2.4) | 98.2 |
Other mortgage related fees | 1.9 | 0.3 | - | (0.1) | 2.1 |
General insurance income | 1.0 | - | 77.5 | - | 78.5 |
Commissions earned on property sales | - | - | 320.4 | - | 320.4 |
Commissions earned on property lettings | - | - | 247.6 | - | 247.6 |
Commercial property services fees | - | - | 91.1 | 0.7 | 91.8 |
Survey and valuation fees | - | - | 119.4 | (7.4) | 112.0 |
Asset management commission | - | - | 21.0 | - | 21.0 |
Conveyancing fees | - | - | 65.6 | (1.0) | 64.6 |
Financial advice fees | 33.0 | - | - | 0.9 | 33.9 |
Software and consultancy fees | - | - | - | 16.8 | 16.8 |
Factoring and invoice discounting services | - | - | - | 15.5 | 15.5 |
Other fees and commissions | 0.1 | - | 13.0 | - | 13.1 |
Fees and commissions receivable | 36.0 | 0.3 | 1,056.2 | 23.0 | 1,115.5 |
Fees and commissions payable and other operating income | 7.9 | - | (0.8) | (9.4) | (2.3) |
Net non -interest income | 43.9 | 0.3 | 1,055.4 | 13.6 | 1,113.2 |
Skipton Group Annual Report & Accounts 2024 193 |
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Skipton Group Annual Report & Accounts 2024 194 | ||||||
Group (£m) | Society (£m) | |||
2024 | 2023 | 2024 | 2023 | |
Equity release portfolio (Note 18) | (12.6) | 9.2 | (12.6) | 9.2 |
Derivatives associated with equity release portfolio (Note 18) | 21.9 | 1.8 | 21.9 | 1.8 |
Equity share investments (Note 20d)) | 1.1 | 0.5 | - | - |
Share warrants | 5.9 | 13.3 | - | - |
Put options held by minority shareholders | (0.3) | 0.3 | - | - |
Hedging instruments and hedged items | 2.0 | (1.6) | 6.9 | 4.7 |
Other financial instruments | - | - | (4.0) | 5.0 |
18.0 | 23.5 | 12.2 | 20.7 |
Performance & Strategy Governance Financial Statements
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Performance & Strategy Governance Financial Statements | Other Information | |||
Skipton Group Annual Report & Accounts 2024 195 |
Skipton Group Annual Report & Accounts 2024 196 |
Performance & Strategy Governance Financial Statements
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A number of transactions are entered into with related parties in the normal course of business; these are | ||
detailed below. | ||
Skipton Group Annual Report & Accounts 2024 197 |
Group & Society (£000) management personnel and persons who are connected with key management personnel: | ||
2024 | 2023 | |
Mortgage loans outstanding at 31 December 2024 | 643 | 1,019 |
Savings balances at 31 December 2024 | 1,327 | 1,476 |
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Skipton Group Annual Report & Accounts 2024 198 |
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Group (£m) | Society (£m) | |||
2024 | 2023 | 2024 | 2023 | |
Current tax: | ||||
Corporation tax on profits in the period | 66.5 | 81.3 | 51.9 | 75.2 |
Adjustments in respect of previous periods | 2.2 | (1.0) | 1.3 | (0.4) |
Pillar 2 top-up taxes | 1.5 | - | 1.5 | - |
70.2 | 80.3 | 54.7 | 74.8 | |
Deferred tax (Note 33): | ||||
Current year charge / (credit) | 9.6 | (2.0) | 3.9 | 0.9 |
Adjustments in respect of previous periods | (1.7) | 1.1 | (1.9) | 0.9 |
Effects of changes in tax rates | - | (0.6) | - | 0.2 |
7.9 | (1.5) | 2.0 | 2.0 | |
Total tax expense actual tax expense is as follows. | 78.1 | 78.8 | 56.7 | 76.8 A reconciliation of the tax expense on profit before tax at the standard rate of corporation tax in the UK to the |
Skipton Group Annual Report & Accounts 2024 199 | ||||
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Skipton Group Annual Report & Accounts 2024 200
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Group (£m) | Society (£m) | |||
2024 | 2023 | 2024 | 2023 | |
Gross carrying amount | 414.7 | 488.8 | 397.9 | 497.7 |
Loss allowance | (0.1) | - | (0.1) | - shown in the table above were held in stage 1 for both the Group and Society at the end of the current and prior |
Net carrying amount year. | 414.6 | 488.8 | 397.8 | 497.7 As outlined in Note 1f), loans and advances to credit institutions are held at amortised cost. All amounts No amounts were written off during the current or prior year in either the Group or the Society. For further |
Skipton Group Annual Report & Accounts 2024 201 |
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Skipton Group Annual Report & Accounts 2024 202
Performance & Strategy Governance Financial Statements
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Group (£m) activities. | 2024 | 2023 | |
FVOCI and Total | FVOCI and Total | ||
Gilts The majority of debt securities held are highly liquid assets which are used on a continuing basis in the Group’s | 1,086.5 | 409.2 | |
Certificates of deposit | - | 97.9 | |
Fixed rate bonds | 1,274.9 | 584.0 | |
Floating rate notes | - | 219.8 | |
Treasury bills | 598.2 | 860.0 | |
Covered bonds | 770.1 | 758.6 | |
Residential mortgage backed securities | 619.9 | 408.2 | |
4,349.6 | 3,337.7 | ||
Debt securities have remaining maturities as follows: | |||
In not more than three months | 492.9 | 487.7 | |
In more than three months but not more than one year | 826.3 | 942.7 | |
In more than one year but not more than five years | 2,222.1 | 1,477.2 | |
In more than five years | 808.3 | 430.1 | |
4,349.6 | 3,337.7 | ||
Transferable debt securities comprise: | |||
Listed on a recognised investment exchange | 4,349.6 | 3,239.8 | |
Unlisted | - | 97.9 | |
4,349.6 | 3,337.7 |
Skipton Group Annual Report & Accounts 2024 203 |
Performance & Strategy Governance Financial Statements
Other Information
Group (£m) | 2024 | 2023 |
FVOCI and Total | FVOCI and Total | |
At 1 January | 3,337.7 | 2,640.3 |
Additions | 4,402.0 | 2,476.7 |
Maturities and disposals | (3,376.3) | (1,828.4) |
Changes in fair value | (28.5) | 49.2 |
Other | 14.7 | (0.1) |
At 31 December | 4,349.6 | 3,337.7 |
Society (£m) | 2024 | 2023 | ||||
FVOCI | FVTPL | Total | FVOCI | FVTPL | Total | |
At 1 January | 3,143.4 | 63.1 | 3,206.5 | 2,514.6 | 58.1 | 2,572.7 |
Additions | 3,908.8 | 77.8 | 3,986.6 | 2,294.0 | - | 2,294.0 |
Maturities and disposals | (2,765.3) | (66.6) | (2,831.9) | (1,713.1) | - | (1,713.1) |
Changes in fair value | (28.7) | (4.0) | (32.7) | 47.9 | 5.0 | 52.9 |
Other | 11.6 | - | 11.6 | - | - | - |
At 31 December | 4,269.8 | 70.3 | 4,340.1 | 3,143.4 | 63.1 | 3,206.5 |
Group (£m) | Society (£m) | |||||
2024 | 2023 | 2024 | 2023 | |||
Loss allowance at 1 January | 0.2 | 0.3 | 0.3 | 0.4 | ||
Increases due to origination, acquisition and additions | 0.2 | 0.1 | 0.2 | 0.1 | ||
Decrease due to derecognition, repayments and disposals | (0.2) | (0.2) | (0.2) | (0.2) | ||
Loss allowance at 31 December | 0.2 | 0.2 | 0.3 | 0.3 |
Skipton Group Annual Report & Accounts 2024 204 |
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Skipton Group Annual Report & Accounts 2024 205 | ||
Performance & Strategy Governance Financial Statements
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Skipton Group Annual Report & Accounts 2024 206 |
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Skipton Group Annual Report & Accounts 2024 207
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Skipton Group Annual Report & Accounts 2024 208
Group (£m) | ||||
Loans fully secured | Loans fully | Other loans | ||
on residential | secured on | and | Total | |
property | land | advances | ||
Loss allowance at 1 January 2024 | 29.0 | 9.0 | 1.6 | 39.6 |
Amounts written off during the year, net of recoveries | (1.0) | (1.4) | (0.5) | (2.9) |
Income statement (credit) / charge for the year | (14.5) | (2.9) | 0.3 | (17.1) |
Loss allowance at 31 December 2024 | 13.5 | 4.7 | 1.4 | 19.6 |
Group (£m) | ||||
Loans fully secured | Loans fully | Other loans | ||
on residential | secured on | and | Total | |
property | land | advances | ||
Loss allowance at 1 January 2023 | 32.5 | 9.9 | 1.2 | 43.6 |
Amounts written off during the year, net of recoveries | (0.5) | - | (0.4) | (0.9) |
Income statement (credit) / charge for the year | (3.0) | (0.9) | 0.8 | (3.1) |
Loss allowance at 31 December 2023 | 29.0 | 9.0 | 1.6 | 39.6 |
Society (£m) | ||||
Loans fully secured | Loans fully | |||
on residential | secured on | Total | ||
property | land | |||
Loss allowance at 1 January 2024 | 27.9 | 9.0 | 36.9 | |
Amounts written off during the year, net of recoveries | (1.0) | (1.4) | (2.4) | |
Income statement credit for the year | (14.1) | (2.9) | (17.0) | |
Loss allowance at 31 December 2024 | 12.8 | 4.7 | 17.5 |
Society (£m) | ||||
Loans fully secured | Loans fully | |||
on residential | secured on | Total | ||
property | Land | |||
Loss allowance at 1 January 2023 | 31.9 | 9.9 | 41.8 | |
Amounts written off during the year, net of recoveries | (0.5) | - | (0.5) | |
Income statement credit for the year | (3.5) | (0.9) | (4.4) | |
Loss allowance at 31 December 2023 | 27.9 | 9.0 | 36.9 |
Performance & Strategy Governance Financial Statements
Other Information
Group & Society (£m) Movements during the year in the equity release portfolio are outlined below. | |||
2024 | 2023 | ||
At January | 293.3 | 278.7 | |
Redemptions | (4.3) | (3.7) | |
Movements in fair value | (12.6) | 9.2 | |
Realised losses on redemption | (1.8) | (0.8) | |
Accrued interest | 2.6 | 9.9 | |
At 31 December calculation, are found in Note 1f) and Note 1v). | 277.2 | 293.3 Further details on how the valuation of the equity release portfolio is derived, including the key inputs into the The Group holds derivative financial instruments to economically hedge the movements in fair value of the equity release portfolio. The movement in fair value of the derivatives held to hedge the equity release portfolio during the year was a £21.9m gain (2023: £1.8m gain) and is included in the Income Statement line ‘Fair value |
Skipton Group Annual Report & Accounts 2024 209 |
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Skipton Group Annual Report & Accounts 2024 210
Society (£m) | |||
Shares in subsidiary | Loans to subsidiary | Total | |
undertakings | undertakings | ||
Cost | |||
At 1 January | 183.5 | 372.7 | 556.2 |
Additions | - | 37.1 | 37.1 |
Repayments | - | (5.9) | (5.9) |
At 31 December | 183.5 | 403.9 | 587.4 |
Provisions | |||
At 1 January | 78.1 | - | 78.1 |
At 31 December | 78.1 | - | 78.1 |
Net book value at 31 December | 105.4 | 403.9 | 509.3 |
Society (£m) | |||
Shares in subsidiary | Loans to subsidiary | Total | |
undertakings | undertakings | ||
Cost | |||
At 1 January | 183.5 | 363.8 | 547.3 |
Additions | - | 12.9 | 12.9 |
Repayments | - | (4.0) | (4.0) |
At 31 December | 183.5 | 372.7 | 556.2 |
Provisions | |||
At 1 January | 78.1 | - | 78.1 |
At 31 December | 78.1 | - | 78.1 |
Net book value at 31 December | 105.4 | 372.7 | 478.1 |
Performance & Strategy Governance Financial Statements
Other Information
Performance & Strategy Governance Financial Statements | |||||
Other Information | |||||
Skipton Group Annual Report & Accounts 2024 211 |
Skipton Group Annual Report & Accounts 2024 212
Ownership Interest (%) | Carrying Value (£m) | |||||
Name of investment | Principle Business Activity | Class of shares held | 2024 | 2023 | 2024 | 2023 |
Cybele Solutions | Conveyancing services | Ordinary | 50.0 | 50.0 | 11.2 | 10.3 |
Holdings Limited* |
Performance & Strategy Governance Financial Statements
Other Information
Other Information | |||||
Performance & Strategy Governance Financial Statements | |||||
Skipton Group Annual Report & Accounts 2024 213 |
2024 | 2023 | |||||
Land and | Equipment, | Land and | Equipment, | |||
Group (£m) | buildings | fixtures | Total | buildings | fixtures | Total |
and fittings | and fittings | |||||
Cost | ||||||
At 1 January | 110.8 | 87.9 | 198.7 | 106.2 | 82.2 | 188.4 |
Additions | 8.9 | 13.1 | 22.0 | 6.6 | 11.0 | 17.6 |
Disposals | (3.7) | (6.9) | (10.6) | (2.0) | (5.2) | (7.2) |
Foreign exchange movements on translation | - | (0.2) | (0.2) | - | (0.1) | (0.1) |
Reclassification to investment property | (0.4) | - | (0.4) | - | - | - |
At 31 December | 115.6 | 93.9 | 209.5 | 110.8 | 87.9 | 198.7 |
Depreciation | ||||||
At 1 January | 58.4 | 65.8 | 124.2 | 55.0 | 61.6 | 116.6 |
Charge for the year | 5.9 | 8.4 | 14.3 | 5.3 | 8.6 | 13.9 |
Impairment charge | - | - | - | - | 0.2 | 0.2 |
Disposals | (3.2) | (6.4) | (9.6) | (1.9) | (4.5) | (6.4) |
Foreign exchange movements on translation | - | (0.2) | (0.2) | - | (0.1) | (0.1) |
Reclassification to investment property | (0.1) | - | (0.1) | - | - | - |
At 31 December | 61.0 | 67.6 | 128.6 | 58.4 | 65.8 | 124.2 |
Net book value at 1 January | 52.4 | 22.1 | 74.5 | 51.2 | 20.6 | 71.8 |
Net book value at 31 December | 54.6 | 26.3 | 80.9 | 52.4 | 22.1 | 74.5 |
Skipton Group Annual Report & Accounts 2024 214 |
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Other Information
Skipton Group Annual Report & Accounts 2024 215 |
Performance & Strategy Governance Financial Statements
Other Information
2024 | 2023 | |||||
Land and | Equipment, | Land and | Equipment, | |||
Group (£m) | buildings | fixtures | Total | buildings | fixtures | Total |
and fittings | and fittings | |||||
Cost | ||||||
Balance at 1 January | 160.4 | 21.3 | 181.7 | 150.6 | 18.2 | 168.8 |
Additions | 17.1 | 2.2 | 19.3 | 20.9 | 3.8 | 24.7 |
Lease modifications and remeasurements | 11.2 | - | 11.2 | 10.5 | - | 10.5 |
Disposals | (24.7) | (0.9) | (25.6) | (21.5) | (0.7) | (22.2) |
Foreign exchange movements on translation | (0.2) | - | (0.2) | (0.1) | - | (0.1) |
At 31 December | 163.8 | 22.6 | 186.4 | 160.4 | 21.3 | 181.7 |
Depreciation | ||||||
Balance at 1 January | 70.9 | 9.9 | 80.8 | 56.7 | 5.4 | 62.1 |
Charge for the year | 32.1 | 5.6 | 37.7 | 32.6 | 5.0 | 37.6 |
Impairment charge | 2.3 | 0.1 | 2.4 | 1.9 | - | 1.9 |
Disposals | (23.8) | (0.9) | (24.7) | (20.2) | (0.5) | (20.7) |
Foreign exchange movements on translation | (0.2) | - | (0.2) | (0.1) | - | (0.1) |
At 31 December | 81.3 | 14.7 | 96.0 | 70.9 | 9.9 | 80.8 |
Net book value at 1 January | 89.5 | 11.4 | 100.9 | 93.9 | 12.8 | 106.7 |
Net book value at 31 December | 82.5 | 7.9 | 90.4 | 89.5 | 11.4 | 100.9 |
Skipton Group Annual Report & Accounts 2024 216 |
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Other Information
Group & Society (£m) | ||
2024 | 2023 | |
Cost | ||
At 1 January | 25.1 | 25.1 |
Disposals | (0.4) | - |
Reclassification from property, plant and equipment | 0.4 | - |
At 31December | 25.1 | 25.1 |
Depreciation | ||
At 1 January | 20.0 | 19.1 |
Charge for the year | 0.6 | 0.7 |
Impairment charge | - | 0.2 |
Disposals | (0.1) | - |
Reclassification from property, plant and equipment | 0.1 | - |
At 31 December relates to branches where part of the property is subleased. was £1.9m (2023: £1.8m) for the Group and Society. | 20.6 | 20.0 |
Net book value at 1 January | 5.1 | 6.0 |
Net book value at 31 December | 4.5 | 5.1 All investment property relates to property purchased by the Society and is either unoccupied by the Society or The amount of rental income from investment property recognised in the Income Statement during the year |
Skipton Group Annual Report & Accounts 2024 217 |
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Group (£m) | Society (£m) | ||||
2024 | 2023 | 2024 | 2023 | ||
Goodwill | 218.5 | 217.7 | - | - | |
Other intangible assets | 92.9 | 95.5 | 4.2 | 0.2 | |
Total intangible assets | 311.4 | 313.2 | 4.2 | 0.2 |
Group (£m) | ||
2024 | 2023 | |
Cost, less amortisation to 1 January 2004 | ||
At 1 January | 230.2 | 228.8 |
Acquisitions of subsidiary undertakings and business units (Note 20b)) | 0.5 | 1.0 |
Revaluation of put options | 0.3 | 0.4 |
At 31 December | 231.0 | 230.2 |
Impairment losses | ||
At 1 January | 12.5 | 12.5 |
At 31 December | 12.5 | 12.5 |
Net book value at 1 January | 217.7 | 216.3 |
Net book value at 31 December | 218.5 | 217.7 Goodwill acquired in a business combination is allocated at acquisition to the cash generating unit (CGU), or group of CGUs, that is expected to benefit from that business combination (as further described in Note 1e)); at Skipton Group level, the allocation of goodwill typically reflects the Group’s operating segments. The Group’s reportable segments are currently assessed and presented at the operating entity level and goodwill held by the Group is allocated accordingly; when testing goodwill held by the Group for impairment at the consolidated |
Skipton Group Annual Report & Accounts 2024 218 |
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Skipton Group Annual Report & Accounts 2024 219
Operating Segment | Key drivers |
Connells Group | Volume of UK property transactions, house price inflation, level of unemployment and |
interest rates | |
Other | Volume of new business, arrears levels, level of unemployment and interest rates |
Operating Segment | 2024 | 2023 |
Connells | 17 | 16 |
Other | 12 | 13 |
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Skipton Group Annual Report & Accounts 2024 220
Other Information | |||||
Performance & Strategy Governance Financial Statements | |||||
Group (£m) | Society (£m) | |||||
2024 | 2023 | 2024 | 2023 | |||
Brands | 61.2 | 61.2 | - | - | ||
Customer contracts and relationships | 10.5 | 16.7 | - | - | ||
Computer software and databases | 21.2 | 17.6 | 4.2 | 0.2 | ||
Total | 92.9 | 95.5 | 4.2 | 0.2 |
2024 | 2023 | |
Peter Alan Limited | 2.3 | 2.3 |
Gascoigne Halman Group Limited | 3.0 | 3.0 |
RMS Estate Agents Limited | 1.2 | 1.2 |
Countrywide Estate Agents | 42.6 | 42.6 |
Lambert Smith Hampton Group Limited | 12.1 | 12.1 |
Total brands | 61.2 | 61.2 |
Goodwill | 212.2 | 211.4 |
Total goodwill and brands | 273.4 | 272.6 |
Group (£m) | Society (£m) | ||||
2024 | 2023 | 2024 | 2023 | ||
Trade receivables (Note 43c)) | 68.8 | 58.0 | 1.9 | 1.8 | |
Prepayments | 33.6 | 33.1 | 16.2 | 16.6 | |
Accrued income | 24.7 | 21.8 | 0.1 | 0.4 | |
Equity share investments mandatorily held at FVTPL | 16.9 | 10.5 | - | - | |
(Note 20d)) | |||||
Share warrants | 21.9 | 15.1 | - | - | |
Investment property (Note 23) | 4.5 | 5.1 | 4.5 | 5.1 | |
Other | 10.8 | 8.5 | 0.2 | 0.5 | |
181.2 | 152.1 | 22.9 | 24.4 |
A maturity analysis of shares is included in Note 41. |
Group (£m) | Society (£m) | ||||
2024 | 2023 | 2024 | 2023 | ||
Amounts owed to subsidiary undertakings | - | - | 201.0 | 209.3 | |
Other | 1,599.6 | 2,093.4 | 1,599.6 | 2,093.4 | |
1,599.6 | 2,093.4 A maturity analysis of amounts owed to credit institutions is included in Note 41. | 1,800.6 | 2,302.7 |
Skipton Group Annual Report & Accounts 2024 221 |
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Other Information
Group (£m) | Society (£m) | |||||
2024 | 2023 | 2024 | 2023 | |||
Certificates of deposit | 5.1 | - | 5.1 | - | ||
Covered bonds | 1,934.9 | 2,251.5 | 1,925.0 | 2,242.5 | ||
Securitisation | 491.6 | 186.0 | - | - | ||
Fair value adjustment for hedged risk | 3.7 | (22.8) | - | - During 2024 the Society issued covered bonds totalling €500m, and in October £700m of Class A notes were | ||
2,435.3 A maturity analysis of debt securities in issue is included in Note 41. | 2,414.7 | 1,930.1 during the year; £300m matured in February 2024 and €500m matured in October 2024. | 2,242.5 issued under Darrowby No. 6 plc, placing £500m and the Society retaining £200m. The Darrowby No. 5 securitisation reached its five year call and step-up date in December 2024 and Class A notes totalling £195.0m, plus the unrated B notes, were called and cancelled. There were also two covered bond maturities |
Skipton Group Annual Report & Accounts 2024 222 |
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Other Information
Subsidiary management incentive scheme shareholdings in Connells Limited at some future dates. | In 2019 two members of Connells Limited senior management purchased equity shares in that company. At the same time, the Group issued options to these shareholders which required SGHL to purchase their During 2024, one member of management left the scheme and as at 31 December 2024 no options remain |
Skipton Group Annual Report & Accounts 2024 223 |
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Other Information
Skipton Group Annual Report & Accounts 2024 224 | |||||||
2023 | ||||||
Provision for | Survey and | |||||
Group (£m) | the costs of | Commission | valuation | Customer | Other | Total |
surplus | clawbacks | claims | compensation | provisions | ||
properties | ||||||
At 1 January | 7.2 | 16.9 | 8.4 | 0.7 | 1.5 | 34.7 |
(Credit) / charge for the year | (0.8) A | 8.7 B | (1.2) A | 0.1 A | 0.7 A | 7.5 |
Utilised during the year | (0.8) | (8.6) | (2.0) | (0.5) | (0.9) | (12.8) |
At 31 December | 5.6 | 17.0 | 5.2 | 0.3 | 1.3 | 29.4 |
2024 | ||||||
Provision for the | Commission | Customer | Other | |||
Society (£m) | costs of surplus | clawbacks | compensation | provisions | Total | |
properties | ||||||
At 1 January | 0.1 | - | 0.3 | 0.2 | 0.6 | |
(Credit) / charge for the year | (0.1) A | 0.1 A | 0.3 A | 4.6 A | 4.9 | |
Utilised during the year | - | (0.1) | (0.1) | - | (0.2) | |
At 31 December | - | - | 0.5 | 4.8 | 5.3 |
2023 | |||||
Provision for the | Customer | Other | |||
Society (£m) | costs of surplus | compensation | provisions | Total | |
properties | |||||
At 1 January | - | 0.6 | 0.2 | 0.8 | |
Charge for the year | 0.2 A | 0.1 A | - | 0.3 | |
Utilised during the year | (0.1) | (0.4) | - | (0.5) | |
At 31 December | 0.1 | 0.3 | 0.2 | 0.6 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 225
Performance & Strategy Governance Financial Statements
Other Information
Group (£m) The movement during the year in the net deferred tax asset was as follows: | Society (£m) | |||
2024 | 2023 | 2024 | 2023 28% (2023: 28%) for the Society and 25% (2023: 25%) for most other Group companies. The rate for the | |
At 1 January to a 3% banking surcharge. | 20.9 | 13.1 | 16.7 | 16.5 Deferred tax is calculated on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes, using the enacted tax rate expected to apply in the relevant tax jurisdiction for the period when these differences are expected to reverse, which is Society is higher than for most other Group companies as the Society’s taxable profits over £100m are subject |
Income Statement (charge) / credit (Note 12) | (7.9) | 1.5 | (2.0) | (2.0) |
Items taken directly to other comprehensive income | (6.5) | 6.6 | (3.5) | 2.2 |
Acquisition of other business assets | (0.2) | (0.3) | - | - |
At 31 December | 6.3 Deferred tax assets and liabilities are attributable to the following items: | 20.9 | 11.2 | 16.7 |
Skipton Group Annual Report & Accounts 2024 226 |
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Other Information
Skipton Group Annual Report & Accounts 2024 227 |
Performance & Strategy Governance Financial Statements
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Skipton Group Annual Report & Accounts 2024 228
Performance & Strategy Governance Financial Statements
Other Information
Performance & Strategy Governance Financial Statements Other Information | ||||
Skipton Group Annual Report & Accounts 2024 229 |
Performance & Strategy Governance Financial Statements | |||
Other Information | |||
Skipton Group Annual Report & Accounts 2024 230 |
Performance & Strategy Governance Financial Statements | Other Information | |||||
2024 | 2023 | ||||
Group (£m) | Retirement (2014) Scheme and the Countrywide scheme. | Retirement | Retirement | ||
Benefit | Benefit | Total | Benefit | Total The table below shows the net pension asset / (liability) recognised within the Statement of Financial Position: | |
Surplus | Obligation | Obligation | |||
Fair value of plan assets | 91.9 | 103.5 | 195.4 | 191.1 | 191.1 |
Fair value of defined benefit obligation | (87.1) | (112.1) | (199.2) | (217.3) | (217.3) |
Net pensions asset / (liability) | 4.8 | (8.6) | (3.8) | (26.2) | (26.2) |
Skipton Group Annual Report & Accounts 2024 231 |
Group (£m) | Society (£m) The table below sets out the reconciliation of the fair value of scheme assets for the year: | |||
2024 | 2023 | 2024 | 2023 | |
At 1 January | 191.1 | 187.9 | 79.2 | 78.6 |
Interest income | 10.0 | 9.3 | 4.8 | 3.8 |
Return on plan assets (excluding amounts included | (21.5) | (2.4) | (11.0) | (0.2) |
in interest income) | ||||
Contributions by employer | 26.0 | 8.4 | 23.0 | 1.7 |
Benefits paid | (10.2) | (12.1) | (4.1) | (4.7) |
At 31 December December 2024 was as follows: • Group £(11.5)m (2023: £6.9m) • Society £(6.2)m (2023: £3.6m) | 195.4 | 191.1 | 91.9 | 79.2 The actual return on the scheme assets, including interest income on plan assets, over the year ended 31 |
Skipton Group Annual Report & Accounts 2024 232 |
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Other Information | ||||
Skipton Group Annual Report & Accounts 2024 233
Performance & Strategy Governance Financial Statements
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Other Information | ||||
Skipton Group Annual Report & Accounts 2024 234 |
Skipton Group Annual Report & Accounts 2024 235 |
Performance & Strategy Governance Financial Statements | Other Information | ||||
Group & Society (£m) | ||
2024 | 2023 | |
Fixed rate reset notes: | ||
Senior non-preferred (SNP) notes due 2026 | 351.7 | 351.7 |
Senior non-preferred (SNP) notes due 2029 | 354.1 | 354.1 |
705.8 | 705.8 | |
Unamortised discount on issue: | ||
Senior non-preferred (SNP) notes due 2026 | (0.2) | (0.4) |
Senior non-preferred (SNP) notes due 2029 | (1.4) | (1.8) |
(1.6) | (2.2) | |
Fair value adjustment for hedged risk | (14.0) | (18.3) |
690.2 have a maturity date of 25 April 2029 and an optional redemption date of 25 April 2028. excluding) the date of redemption, are subject to certain conditions. | 685.3 The fixed rate reset notes are denominated in Sterling. Coupons are paid on a fixed basis semi-annually. The subordinated liabilities listed above were issued under the Society’s £2.0bn Euro Medium Term Note Programme. The £350m Senior non-preferred (SNP) notes due 2026 have a maturity date of 2 October 2026 and an optional redemption date of 2 October 2025. The £350m Senior non-preferred (SNP) notes due 2029 The optional redemptions, at 100% of the principal amount plus accrued and unpaid interest up to (but The notes are junior in right of payment to all Senior Claims, pari passu with all other Senior Non-Preferred |
Skipton Group Annual Report & Accounts 2024 236 |
Performance & Strategy Governance Financial Statements
Other Information
Group (£m) a) Cash flows from operating activities i) Impairment credits on financial instruments financial instruments’ include the following: | Society (£m) | |||
2024 | 2023 | 2024 | 2023 For the purposes of the Statements of Cash Flows, amounts presented within the line ‘Impairment credits on | |
Impairment credit on loans and advances to customers (net of recoveries) (Note 17) | (17.1) | (3.1) | (17.0) | (4.4) |
Loans and advances recovered | 0.5 | 0.4 | 0.4 | 0.4 |
Impairment credit on liquid assets | (0.1) | (0.1) | (0.1) | (0.1) |
Impairment charge on trade receivables (Note 43c)) | 0.8 | 0.8 | - | - |
(15.9) ii) Fair value gains on financial instruments held at FVTPL | (2.0) | (16.7) | (4.1) For the purposes of the Statements of Cash Flows, amounts presented within the line ‘Fair value gains on |
Group (£m) financial instruments held at FVTPL’ include the following: | Society (£m) | |||
2024 | 2023 | 2024 | 2023 | |
Restated* | Restated* | |||
Fair value (gains) / losses on hedging instruments and hedged | (2.0) | 1.6 | (6.9) | (4.7) |
items | ||||
Fair value gains on derivatives associated with the equity release | (21.9) | (1.8) | (21.9) | (1.8) |
portfolio | ||||
Fair value losses / (gains) on equity release portfolio (Note 18) | 12.6 | (9.2) | 12.6 | (9.2) |
Fair value gains on share warrants | (5.9) | (13.3) | - | - |
Fair value gains / (losses) on put options held by minority | 0.3 | (0.3) | - | - |
shareholders iii) Other non-cash movements | ||||
Fair value gains on equity share investments at FVTPL (Note 20d)) | (1.1) | (0.5) | - | - |
Fair value losses / (gains) on debt securities at FVTPL | - | - | 4.0 | (5.0) |
(18.0) | (23.5) | (12.2) hedging instruments and hedged items’, which was not previously presented within this breakdown. | (20.7) * The information shown above for the year ended 31 December 2023 is restated to reflect the appropriate presentation of certain non-cash movements (see Note 1c) for details). The restatement relates solely to the line ‘Fair value gains on |
Skipton Group Annual Report & Accounts 2024 237 | ||||||
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Other Information
Performance & Strategy Governance Financial Statements Other Information | ||||||
Skipton Group Annual Report & Accounts 2024 238 |
Skipton Group Annual Report & Accounts 2024 239 | ||||||
Performance & Strategy Governance Financial Statements Other Information | ||||
Skipton Group Annual Report & Accounts 2024 240 Performance & Strategy Governance Financial Statements Other Information | ||||
2024 | 2023 | |||||
Group (£m) | Before- tax | Tax benefit / | Net-of-tax | Before- tax | Tax (expense) | Net-of-tax |
amount | (expense) | amount | amount | / benefit | amount | |
Financial assets held at FVOCI | (1.7) | 0.6 | (1.1) | 1.8 | (0.2) | 1.6 |
Cash flow hedges | 16.3 | (4.6) | 11.7 | (34.3) | 9.6 | (24.7) |
Cost of hedging reserve | (1.2) | 0.3 | (0.9) | 0.8 | (0.2) | 0.6 |
Remeasurements of defined | (3.7) | 1.0 | (2.7) | (4.5) | 1.1 | (3.4) |
benefit obligations | ||||||
Translation of foreign operations | (1.4) | - | (1.4) | (0.3) | - | (0.3) |
Other comprehensive income | 8.3 | (2.7) | 5.6 | (36.5) | 10.3 | (26.2) |
2024 | 2023 | |||||
Society (£m) | Before- tax | Tax benefit / | Net-of-tax | Before- tax | Tax (expense) | Net-of-tax |
amount | (expense) | amount | amount | / benefit | Amount | |
Financial assets held at FVOCI | (1.8) | 0.5 | (1.3) | 0.4 | (0.1) | 0.3 |
Cash flow hedges | 10.7 | (3.0) | 7.7 | (11.4) | 3.2 | (8.2) |
Remeasurements of defined | (2.7) | 0.8 | (1.9) | (0.2) | 0.1 | (0.1) |
benefit obligations | ||||||
Other comprehensive income | 6.2 | (1.7) | 4.5 | (11.2) | 3.2 | (8.0) |
Skipton Group Annual Report & Accounts 2024 241
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Other Information
Skipton Group Annual Report & Accounts 2024 242
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Other Information
2024 | 2023 | |||||||
Group (£m) | Up to 3 | 3 - 12 | 1 – 5 | Over | Up to 3 | 3 - 12 | 1 – 5 | Over |
months | months | years | 5 years | months | months | years | 5 years | |
Cash flow hedges | ||||||||
Interest rate swaps | ||||||||
Notional (£m) | - | - | 2,291.5 | 571.5 | - | - | 1,817.5 | 256.0 |
Weighted average fixed | - | - | 3.8% | 3.8% | - | - | 4.5% | 3.6% |
interest rate (%) | ||||||||
Fair value hedges | ||||||||
Interest rate swaps | ||||||||
Notional (£m) | 3,988.3 | 13,669.0 | 16,872.2 | 1,538.5 | 3,144.0 | 8,606.8 | 21,167.8 | 955.5 |
Weighted average fixed | 4.3% | 3.7% | 3.2% | 3.2% | 2.4% | 3.2% | 2.9% | 2.8% |
interest rate (%) | ||||||||
Cross currency swaps | ||||||||
Notional (£m) | - | - | 421.3 | - | - | 443.5 | - | - |
Weighted average fixed | - | - | 3.3% | - | - | 0.01% | - | - |
interest rate (%) |
The table below provides further detail on the Group’s fair value hedges used in hedge accounting | ||||||||
Skipton Group Annual Report & Accounts 2024 243 | ||||||
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Other Information
Carrying amount (note A) mandatorily held at FVTPL’. | Change in fair value | Losses reclassified from | ||||
£m Notes A. The Statement of Financial Position lines that includes these items are ‘Derivative financial instruments’. B. The change in fair value during the period that was used as the basis for calculating hedge ineffectiveness and which was recognised in the Income Statement line ‘Fair value gains on financial instruments mandatorily held at FVTPL’. C. The amount of hedge ineffectiveness recognised in the Income Statement during the year. The Income Statement line that includes the hedge ineffectiveness recognised during the period is ‘Fair value gains on financial instruments D. In addition, £1.2m of fair value losses (2023: £0.8m gain) were recognised directly in the Group’s cost of hedging reserve due to ineffectiveness arising as a result of foreign currency basis spread as described in Note 1f). The table below provides further detail on the Group’s cash flow hedges used in hedge accounting relationships. | Notional | Assets | Liabilities | credit / (charge) | OCI to Income Statement | |
(note B) | ||||||
2024 | Group | |||||
Interest rate swaps | 2,863.0 | 17.5 | (22.1) | 52.8 | 45.9 | |
2024 | Society | |||||
Interest rate swaps | 3,953.8 | 20.1 | (55.4) | 47.0 | 45.9 | |
2023 | Group | |||||
Interest rate swaps | 2,073.5 | 3.8 | (61.2) | (27.1) | 14.1 | |
2023 A. The Statement of Financial Position lines that includes these items are ‘Derivative financial instruments’. Income. cashflow hedges. | Society Notes | |||||
Interest rate swaps | 3,245.1 | 13.5 | (95.8) | (11.8) | 14.1 B. The change in fair value during the period that was used as the basis for calculating hedge ineffectiveness and is recognised within the ‘Cash flow hedging reserve: Losses taken to equity’ line of the Statement of Comprehensive There was no hedge ineffectiveness recognised during either 2024 or 2023 in respect of the Group or Society’s | |
Skipton Group Annual Report & Accounts 2024 244 |
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Other Information
Skipton Group Annual Report & Accounts 2024 245
Carrying amount | Amount | ||||||
Fair value | Change in fair | remaining on | |||||
adjustment on | value credit / | items de- | |||||
Group (£m) | Assets | Liabilities | hedged item | SOFP line | (charge) | designated | |
(note A) | (note B) | from hedge | |||||
relationship | |||||||
(note C) | |||||||
Cash flow hedges | |||||||
Floating rate assets | 1,271.0 | - | n/a | note D | n/a | 78.3 | |
Floating rate liabilities | - | 802.5 | n/a | note E | n/a | (14.9) | |
Fair value hedges | |||||||
Fixed rate mortgages | 21,758.7 | - | (350.9) | note F | 615.9 | - | |
Debt securities | 854.4 | - | (52.3) | note D | 47.5 | - | |
Fixed rate savings | - | 11,194.4 | (3.3) | note G | 129.4 | - | |
Amounts owed to other customers | - | 41.3 | (0.1) | note I | (0.1) | - | |
Covered bonds | - | 434.4 | (22.8) | note E | 18.0 | - | |
Subordinated liabilities | - | 705.8 | (18.2) | note H | 21.1 | - |
Carrying amount | Amount | |||||
Fair value | Change in fair | remaining on | ||||
adjustment on | value credit / | items de- | ||||
Society (£m) | Assets | Liabilities | hedged item | SOFP line | (charge) | designated |
(note A) | (note B) | from hedge | ||||
relationship | ||||||
(note C) | ||||||
Cash flow hedges | ||||||
Floating rate assets | 1,775.3 | - | n/a | note D | n/a | 37.6 |
Floating rate liabilities | - | 2,178.5 | n/a | note E | n/a | (10.1) |
Fair value hedges | ||||||
Fixed rate mortgages | 21,325.2 | - | (271.7) | note F | 75.7 | - |
Debt securities | 2,206.9 | - | (79.3) | note D | (26.9) | - |
Fixed rate savings | - | 12,930.5 | (16.2) | note G | 14.6 | - |
Subordinated liabilities | - | 705.8 | (14.0) | note H | 4.2 | - |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 246
Carrying amount | Amount | ||||||
Fair value | Change in fair | remaining on | |||||
adjustment on | value credit / | items de- | |||||
Society (£m) | Assets | Liabilities | hedged item | SOFP line | (charge) | designated | |
(note A) | (note B) | from hedge | |||||
relationship | |||||||
(note C) | |||||||
Cash flow hedges | |||||||
Floating rate assets | 1,544.8 | - | n/a | note D | n/a | 78.3 | |
Floating rate liabilities | - | 1,700.3 | n/a | note E | n/a | (14.7) | |
Fair value hedges | |||||||
Fixed rate mortgages | 21,828.7 | - | (347.4) | note F | 617.4 | - | |
Debt securities | 854.4 | - | (52.4) | note D | 47.4 | - | |
Fixed rate savings | - | 11,938.7 | (30.8) | note G | 160.9 | - | |
Amounts owed to other customers | - | 41.3 | (0.1) | note I | (0.1) | - | |
Subordinated liabilities | - | 705.8 | (18.2) | note H | 21.1 | - |
Carrying amount | Change in fair value | |||||
recognised in OCI: | Amount reclassified from | |||||
£m | Notional | Assets | Liabilities | (charge) / credit | OCI to Income Statement | |
(note A) | ||||||
2024 | Group | |||||
Cross currency | 421.3 | 8.4 | - | (1.2) | - | |
swaps | ||||||
2023 | Group | |||||
Cross currency | 443.5 | - | (23.6) | 0.8 | - | |
swaps | ||||||
Performance & Strategy Governance Financial Statements
Other Information
2024 | 2023 | |||||
Cash flow | Cost of | Cash flow | Cost of | |||
Group (£m) | hedging | hedging | Total | hedging | hedging | Total |
reserve | reserve | reserve | reserve | |||
Balance at 1 January | 4.9 | (0.5) | 4.4 | 29.6 | (1.1) | 28.5 |
Change in fair value of derivatives in effective hedging relationships: | ||||||
Held to hedge interest rate | 6.3 | (1.2) | 5.1 | (40.7) | 0.8 | (39.9) |
risk | ||||||
Net amounts reclassified to profit or loss from derivatives: | ||||||
Held to hedge interest rate | 10.0 | - | 10.0 | 6.4 | - | 6.4 |
risk | ||||||
Tax on movements in reserves | (4.6) | 0.3 | (4.3) | 9.6 | (0.2) | 9.4 |
during the year | ||||||
Balance at 31 December | 16.6 | (1.4) | 15.2 | 4.9 | (0.5) | 4.4 |
Skipton Group Annual Report & Accounts 2024 247 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 248
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 249 | |||||||
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 250 | |||||||
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 251 | |||||||
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 252 | |||||||
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 253 | |||||
2023 (restated*) | |||||
Group (£m) | Up to 3 | 3 – 12 | 1 to 5 | Over 5 | Total |
months | months | years | years | ||
Shares | 21,648.9 | 2,360.0 | 2,117.9 | 29.6 | 26,156.4 |
Amounts owed to credit institutions, other customers and debt securities in issue | 2,590.8 | 1,942.7 | 3,165.2 | - | 7,698.7 |
Derivative financial instruments | 43.5 | 119.4 | 288.5 | 45.8 | 497.2 |
Lease liabilities | 7.6 | 22.6 | 59.6 | 14.6 | 104.4 |
Trade payables | 10.2 | - | - | - | 10.2 |
Fair value of put option obligation | - | 3.4 | 0.2 | - | 3.6 |
Subordinated liabilities | - | 28.9 | 440.6 | 371.9 | 841.4 |
Subscribed capital | 1.6 | 2.9 | 18.0 | note A | 22.5 |
Total | 24,302.6 | 4,479.9 | 6,090.0 | 461.9 | 35,334.4 |
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Other Information
Skipton Group Annual Report & Accounts 2024 254 | |||||
2023 (restated*) | |||||
Society £m | Up to 3 | 3 – 12 | 1 to 5 | Over 5 | Total |
months | months | years | years | ||
Shares | 21,648.9 | 2,360.0 | 2,117.9 | 2.1 | 26,128.9 |
Amounts owed to credit institutions, other customers and debt securities in issue | 1,697.0 | 1,167.5 | 2,873.3 | - | 5,737.8 |
Derivative financial instruments | 49.4 | 133.1 | 312.8 | 45.7 | 541.0 |
Lease liabilities | 0.6 | 1.9 | 6.4 | 2.2 | 11.1 |
Trade payables | 2.3 | - | - | - | 2.3 |
Subordinated liabilities | - | 28.9 | 440.6 | 371.9 | 841.4 |
Subscribed capital | 1.6 | 2.9 | 18.0 | note A | 22.5 |
Total | 23,399.8 | 3,694.3 | 5,769.0 | 421.9 | 33,285.0 |
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Other Information
Skipton Group Annual Report & Accounts 2024 255
£m | As at 31 December | Average | High | Low | As at 31 December | ||
2024 | 2024 | 2024 | 2024 | 2023 | |||
Static earnings -at-risk | 27.9 | 24.8 | 32.1 | 16.5 | 16.5 | ||
Historical value -at-risk | 3.5 | 3.4 | 5.2 | 1.8 | 1.8 | ||
2% parallel interest rate shift | 20.8 | 21.0 | 37.6 | 8.1 | 17.8 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 256
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 257
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 258
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 259 ^ F | ||||||
2023 | ||||||
Group | Fair value | |||||
Gross carrying | ECL allowance | adjustment for | Carrying amount | |||
amount | (Note 17) | hedged risk | ||||
£m | £m | £m | £m | % | ||
Residential mortgages | 28,192.3 | (29.0) | (350.9) | 27,812.4 | 98.8 | |
Loans fully secured on land^ | 135.2 | (9.0) | - | 126.2 | 0.4 | |
Other lending: | ||||||
Debt factoring advances | 171.2 | (1.6) | - | 169.6 | 0.6 | |
Other loans | 53.2 | - | - | 53.2 | 0.2 | |
Total | 28,551.9 | (39.6) | (350.9) | 28,161.4 | 100.0 |
2024 | ||||||
Society | Fair value | |||||
Gross carrying | ECL allowance | adjustment for | Carrying amount | |||
amount | (Note 17) | hedged risk | ||||
£m | £m | £m | £m | % | ||
Residential mortgages | 28,509.8 | (12.8) | (271.7) | 28,225.3 | 99.6 | |
Loans fully secured on land^ | 114.3 | (4.7) | - | 109.6 | 0.4 | |
Total | 28,624.1 | (17.5) | (271.7) | 28,334.9 | 100.0 |
2023 | ||||||
Society | Fair value | |||||
Gross carrying | ECL allowance | adjustment for | Carrying amount | |||
amount | (Note 17) | hedged risk | ||||
£m | £m | £m | £m | % | ||
Residential mortgages | 26,114.0 | (27.9) | (347.4) | 25,738.7 | 99.5 | |
Loans fully secured on land^ | 135.2 | (9.0) | - | 126.2 | 0.5 | |
Total | 26,249.2 | (36.9) | (347.4) | 25,864.9 | 100.0 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 260
2024 (£m) | Group | Society | ||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
Not past due | 30,067.3 | 224.2 | 13.8 | 30,305.3 | 28,046.0 | 220.4 | 13.8 | 28,280.2 |
Up to 30 days past due | - | 72.5 | 3.6 | 76.1 | - | 70.6 | 3.6 | 74.2 |
31 to 60 days past due | - | 46.4 | 4.6 | 51.0 | - | 43.6 | 4.6 | 48.2 |
61 to 90 days past due | - | 15.7 | 9.8 | 25.5 | - | 15.7 | 9.8 | 25.5 |
Over 90 days past due | - | - | 84.9 | 84.9 | - | - | 81.7 | 81.7 |
Total | 30,067.3 | 358.8 | 116.7 | 30,542.8 | 28,046.0 | 350.3 | 113.5 | 28,509.8 |
2023 (£m) | Group | Society | ||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
Not past due | 27,485.7 | 506.4 | 8.5 | 28,000.6 | 25,412.6 | 505.6 | 8.5 | 25,926.7 |
Up to 30 days past due | - | 67.0 | 1.8 | 68.8 | - | 64.2 | 1.8 | 66.0 |
31 to 60 days past due | - | 42.5 | 3.5 | 46.0 | - | 41.8 | 3.5 | 45.3 |
61 to 90 days past due | - | 12.7 | 7.3 | 20.0 | - | 12.7 | 7.1 | 19.8 |
Over 90 days past due | - | - | 56.9 | 56.9 | - | - | 56.2 | 56.2 |
Total | 27,485.7 | 628.6 | 78.0 | 28,192.3 | 25,412.6 | 624.3 | 77.1 | 26,114.0 |
31 December |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 261
2023 (£m) | Group | Society | ||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
Gross carrying amount at 1 | 20,685.8 | 4,351.4 | 60.1 | 25,097.3 | 18,799.9 | 4,346.8 | 60.1 | 23,206.8 |
January | ||||||||
Transfers due to changes in credit | ||||||||
risk (note A): | ||||||||
From stage 1 to stage 2 | (266.4) | 266.4 | - | - | (262.1) | 262.1 | - | - |
From stage 1 to stage 3 | (6.0) | - | 6.0 | - | (5.1) | - | 5.1 | - |
From stage 2 to stage 1 | 3,471.8 | (3,471.8) | - | - | 3,468.9 | (3,468.9) | - | - |
From stage 2 to stage 3 | - | (17.6) | 17.6 | - | - | (17.6) | 17.6 | - |
From stage 3 to stage 2 | - | 7.1 | (7.1) | - | - | 7.1 | (7.1) | - |
From stage 3 to stage 1 | 1.6 | - | (1.6) | - | 1.6 | - | (1.6) | - |
Modification of contractual | (5.2) | (13.7) | 14.5 | (4.4) | (5.2) | (13.7) | 14.5 | (4.4) |
cashflows | ||||||||
Increases due to origination | 6,575.3 | 26.9 | 1.1 | 6,603.3 | 6,205.9 | 26.9 | 1.0 | 6,233.8 |
Decrease due to derecognition and repayments | (2,980.5) | (514.9) | (9.8) | (3,505.2) | (2,800.6) | (513.2) | (9.7) | (3,323.5) |
Written off | (0.2) | (1.5) | (3.4) | (5.1) | (0.2) | (1.5) | (3.4) | (5.1) |
Other movements | 9.5 | (3.7) | 0.6 | 6.4 | 9.5 | (3.7) | 0.6 | 6.4 |
Gross carrying amount at 31 December | 27,485.7 | 628.6 | 78.0 | 28,192.3 | 25,412.6 | 624.3 | 77.1 | 26,114.0 |
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Other Information
Skipton Group Annual Report & Accounts 2024 262
2024 (£m) | Group | Society | ||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
Loss allowance at 1 January | 16.2 | 6.0 | 6.8 | 29.0 | 15.4 | 5.9 | 6.6 | 27.9 |
Transfers due to changes in credit | ||||||||
risk: | ||||||||
From stage 1 to stage 2 | (0.1) | 0.8 | - | 0.7 | (0.1) | 0.8 | - | 0.7 |
From stage 1 to stage 3 | - | - | 0.5 | 0.5 | - | - | 0.5 | 0.5 |
From stage 2 to stage 1 | 0.1 | (1.6) | - | (1.5) | 0.1 | (1.6) | - | (1.5) |
From stage 2 to stage 3 | - | (0.4) | 0.4 | - | - | (0.4) | 0.4 | - |
From stage 3 to stage 2 | - | 0.1 | (0.2) | (0.1) | - | 0.1 | (0.2) | (0.1) |
Remeasurements within existing | (11.0) | (0.8) | (0.4) | (12.2) | (10.4) | (0.9) | (0.7) | (12.0) |
stage | ||||||||
Increases due to origination | 1.2 | 0.1 | 0.1 | 1.4 | 1.1 | 0.1 | 0.1 | 1.3 |
Decrease due to derecognition and repayments | (1.9) | (0.6) | (0.9) | (3.4) | (1.7) | (0.5) | (0.9) | (3.1) |
Changes due to modification | - | (1.1) | 0.9 | (0.2) | - | (1.1) | 0.9 | (0.2) |
without derecognition | ||||||||
Written off | - | - | (0.7) | (0.7) | - | - | (0.7) | (0.7) |
Loss allowance at 31 December | 4.5 | 2.5 | 6.5 | 13.5 | 4.4 | 2.4 | 6.0 | 12.8 |
2023 (£m) | Group | Society | ||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
Loss allowance at 1 January | 11.2 | 17.7 | 3.6 | 32.5 | 10.6 | 17.7 | 3.6 | 31.9 |
Transfers due to changes in credit | ||||||||
risk: | ||||||||
From stage 1 to stage 2 | (0.1) | 1.5 | - | 1.4 | (0.1) | 1.5 | - | 1.4 |
From stage 1 to stage 3 | - | - | 0.7 | 0.7 | - | - | 0.7 | 0.7 |
From stage 2 to stage 1 | 1.8 | (12.0) | - | (10.2) | 1.8 | (12.0) | - | (10.2) |
From stage 2 to stage 3 | - | (0.5) | 1.5 | 1.0 | - | (0.5) | 1.5 | 1.0 |
From stage 3 to stage 2 | - | 0.1 | (0.1) | - | - | 0.1 | (0.1) | - |
Remeasurements within existing | (0.8) | 0.1 | 0.3 | (0.4) | (0.9) | - | 0.3 | (0.6) |
stage | ||||||||
Increases due to origination | 5.5 | 0.3 | 0.1 | 5.9 | 5.4 | 0.3 | 0.1 | 5.8 |
Decrease due to derecognition and repayments | (1.4) | (1.5) | (0.3) | (3.2) | (1.4) | (1.5) | (0.3) | (3.2) |
Changes due to modification | - | 0.3 | 1.4 | 1.7 | - | 0.3 | 1.2 | 1.5 |
without derecognition | ||||||||
Written off | - | - | (0.4) | (0.4) | - | - | (0.4) | (0.4) |
Loss allowance at 31 December | 16.2 | 6.0 | 6.8 | 29.0 | 15.4 | 5.9 | 6.6 | 27.9 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 263
Performance & Strategy Governance Financial Statements | ||||||||
Other Information | ||||||||
Group 2023 (£m) | Gross Carrying Amount | Loss Allowance | ||||||
Probability of default | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
<0.15% | 56.9 | 0.3 | - | 57.2 | 0.6 | - | - | 0.6 |
0.15% - <0.25% | 1,168.8 | - | - | 1,168.8 | 0.4 | - | - | 0.4 |
0.25% - <0.5% | 8,527.9 | 0.6 | - | 8,528.5 | 4.0 | - | - | 4.0 |
0.5% - <0.75% | 10,540.5 | 1.8 | - | 10,542.3 | 5.7 | - | - | 5.7 |
0.75% - <2.5% | 7,093.1 | 94.2 | - | 7,187.3 | 5.3 | 0.1 | - | 5.4 |
2.5% - <10% | 98.5 | 200.8 | - | 299.3 | 0.2 | 0.3 | - | 0.5 |
10% - <100% | - | 330.9 | - | 330.9 | - | 5.6 | - | 5.6 |
Default | - | - | 78.0 | 78.0 | - | - | 6.8 | 6.8 |
Total | 27,485.7 | 628.6 | 78.0 | 28,192.3 | 16.2 | 6.0 | 6.8 | 29.0 |
ECL coverage by stage (%) | 0.06% | 0.95% | 8.72% | 0.10% |
Skipton Group Annual Report & Accounts 2024 264
Society 2024 (£m) | Gross Carrying Amount | Loss Allowance | ||||||
Probability of default | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
<0.15% | 4,841.6 | 0.4 | - | 4,842.0 | 0.6 | - | - | 0.6 |
0.15% - <0.25% | 11,387.7 | 0.4 | - | 11,388.1 | 1.5 | - | - | 1.5 |
0.25% - <0.5% | 10,063.3 | 5.7 | - | 10,069.0 | 1.8 | - | - | 1.8 |
0.5% - <0.75% | 1,315.8 | 13.0 | - | 1,328.8 | 0.3 | - | - | 0.3 |
0.75% - <2.5% | 430.9 | 65.3 | - | 496.2 | 0.2 | - | - | 0.2 |
2.5% - <10% | 6.7 | 59.4 | - | 66.1 | - | 0.1 | - | 0.1 |
10% - <100% | - | 206.1 | - | 206.1 | - | 2.3 | - | 2.3 |
Default | - | - | 113.5 | 113.5 | - | - | 6.0 | 6.0 |
Total | 28,046.0 | 350.3 | 113.5 | 28,509.8 | 4.4 | 2.4 | 6.0 | 12.8 |
ECL coverage by stage (%) | 0.02% | 0.69% | 5.29% | 0.04% |
Society 2023 (£m) | Gross Carrying Amount | Loss Allowance | ||||||
Probability of default | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
<0.15% | 56.9 | 0.3 | - | 57.2 | 0.6 | - | - | 0.6 |
0.15% - <0.25% | 1,168.8 | - | - | 1,168.8 | 0.4 | - | - | 0.4 |
0.25% - <0.5% | 8,547.2 | 0.6 | - | 8,547.8 | 3.9 | - | - | 3.9 |
0.5% - <0.75% | 8,448.1 | 1.8 | - | 8,449.9 | 5.0 | - | - | 5.0 |
0.75% - <2.5% | 7,093.1 | 94.2 | - | 7,187.3 | 5.3 | 0.1 | - | 5.4 |
2.5% - <10% | 98.5 | 200.8 | - | 299.3 | 0.2 | 0.3 | - | 0.5 |
10% - <100% | - | 326.6 | - | 326.6 | - | 5.5 | - | 5.5 |
Default | - | - | 77.1 | 77.1 | - | - | 6.6 | 6.6 |
Total | 25,412.6 | 624.3 | 77.1 | 26,114.0 | 15.4 | 5.9 | 6.6 | 27.9 |
ECL coverage by stage (%) | 0.06% | 0.95% | 8.56% | 0.11% |
2024 | 2023 | |||||
Group | Gross | ECL | ECL | Gross | ECL | ECL |
carrying | allowance | coverage | carrying | allowance | coverage | |
amount | £m | % | amount | £m | % | |
£m | £m | |||||
Over 30 days past due | 62.1 | 1.2 | 1.9% | 55.2 | 2.3 | 4.2% |
In forbearance | 16.5 | 0.1 | 0.6% | 7.3 | 0.1 | 1.4% |
In arrears | 66.8 | 0.6 | 0.9% | 62.5 | 1.4 | 2.2% |
Term expired | 18.6 | - | - | 13.5 | - | - |
Temporary transfer to interest only* | 103.5 | 0.1 | 0.1% | 210.7 | 0.4 | 0.2% |
Increase in PD since origination | 91.3 | 0.5 | 0.5% | 279.4 | 1.8 | 0.6% |
Total | 358.8 | 2.5 | 0.7% | 628.6 | 6.0 | 1.0% |
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Other Information
Skipton Group Annual Report & Accounts 2024 265
2024 | 2023 | |||||
Society | Gross | ECL | ECL | Gross | ECL | ECL |
carrying | allowance | coverage | carrying | allowance | coverage | |
amount | £m | % | amount | £m | % | |
£m | £m | |||||
Over 30 days past due | 59.3 | 1.1 | 1.9% | 54.5 | 2.2 | 4.0% |
In forbearance | 12.6 | 0.1 | 0.8% | 6.5 | 0.1 | 1.5% |
In arrears | 65.0 | 0.6 | 0.9% | 59.7 | 1.4 | 2.3% |
Term expired | 18.6 | - | - | 13.5 | - | - |
Temporary transfer to interest only * | 103.5 | 0.1 | 0.1% | 210.7 | 0.4 | 0.2% |
Increase in PD since origination | 91.3 | 0.5 | 0.5% | 279.4 | 1.8 | 0.6% |
Total | 350.3 | 2.4 | 0.7% | 624.3 | 5.9 | 0.9% |
2024 | 2023 | |||||||
Group (£m) | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
Prime: | ||||||||
Residential | 24,273.8 | 288.6 | 80.1 | 24,642.5 | 21,437.2 | 492.2 | 48.7 | 21,978.1 |
Buy-to-let | 5,608.3 | 42.1 | 18.3 | 5,668.7 | 5,864.2 | 73.3 | 11.5 | 5,949.0 |
Self build | 8.6 | 0.8 | 1.0 | 10.4 | 9.7 | 1.3 | 1.0 | 12.0 |
Fast track* | 9.2 | 0.6 | 0.1 | 9.9 | 10.9 | 1.4 | - | 12.3 |
Self certified | 145.2 | 21.4 | 15.4 | 182.0 | 138.8 | 49.8 | 14.2 | 202.8 |
Sub -prime^: | ||||||||
Residential | 3.7 | 0.8 | 0.2 | 4.7 | 4.4 | 1.5 | 0.3 | 6.2 |
Buy-to-let | 5.0 | 0.4 | 0.3 | 5.7 | 6.3 | 1.3 | 0.2 | 7.8 |
Self certified | 13.5 | 4.1 | 1.3 | 18.9 | 14.2 | 7.8 | 2.1 | 24.1 |
Total | 30,067.3 | 358.8 | 116.7 | 30,542.8 | 27,485.7 | 628.6 | 78.0 | 28,192.3 |
2024 | 2023 | |||||||
Society (£m) | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
Prime: | ||||||||
Residential | 23,584.1 | 285.0 | 79.8 | 23,948.9 | 20,673.1 | 491.2 | 48.5 | 21,212.8 |
Buy-to-let | 4,276.7 | 37.2 | 15.4 | 4,329.3 | 4,555.6 | 70.0 | 10.8 | 4,636.4 |
Self build | 8.6 | 0.8 | 1.0 | 10.4 | 9.7 | 1.3 | 1.0 | 12.0 |
Fast track* | 9.2 | 0.6 | 0.1 | 9.9 | 10.9 | 1.4 | - | 12.3 |
Self certified | 145.2 | 21.4 | 15.4 | 182.0 | 138.4 | 49.8 | 14.2 | 202.4 |
Sub -prime^: | ||||||||
Residential | 3.7 | 0.8 | 0.2 | 4.7 | 4.4 | 1.5 | 0.3 | 6.2 |
Buy-to-let | 5.0 | 0.4 | 0.3 | 5.7 | 6.3 | 1.3 | 0.2 | 7.8 |
Self certified | 13.5 | 4.1 | 1.3 | 18.9 | 14.2 | 7.8 | 2.1 | 24.1 |
Total | 28,046.0 | 350.3 | 113.5 | 28,509.8 | 25,412.6 | 624.3 | 77.1 | 26,114.0 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 266
Group (£m) | 2024 | 2023 | ||||||
Region | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
North | 854.6 | 14.3 | 3.9 | 872.8 | 806.6 | 20.6 | 3.1 | 830.3 |
Yorkshire | 2,332.1 | 30.2 | 9.8 | 2,372.1 | 2,181.6 | 53.8 | 6.9 | 2,242.3 |
East Midlands | 2,035.7 | 26.7 | 7.2 | 2,069.6 | 1,830.9 | 43.1 | 4.8 | 1,878.8 |
East Anglia | 2,836.3 | 43.8 | 11.3 | 2,891.4 | 2,527.4 | 57.1 | 7.6 | 2,592.1 |
London | 5,732.7 | 54.4 | 22.6 | 5,809.7 | 5,147.8 | 102.2 | 10.8 | 5,260.8 |
South East | 4,847.5 | 57.2 | 21.5 | 4,926.2 | 4,316.7 | 101.4 | 13.7 | 4,431.8 |
South West | 2,695.6 | 29.2 | 6.9 | 2,731.7 | 2,518.8 | 63.1 | 4.7 | 2,586.6 |
West Midlands | 2,381.5 | 31.1 | 7.4 | 2,420.0 | 2,110.4 | 50.9 | 5.9 | 2,167.2 |
North West | 2,821.4 | 37.5 | 13.6 | 2,872.5 | 2,605.4 | 73.3 | 10.0 | 2,688.7 |
Wales | 825.6 | 10.3 | 3.9 | 839.8 | 773.1 | 21.6 | 2.2 | 796.9 |
Scotland | 1,959.1 | 19.8 | 6.7 | 1,985.6 | 1,843.7 | 38.7 | 6.1 | 1,888.5 |
Northern Ireland | 11.2 | 0.8 | 1.3 | 13.3 | 11.7 | 1.8 | 2.0 | 15.5 |
Channel Islands | 734.0 | 3.5 | 0.6 | 738.1 | 811.6 | 1.0 | 0.2 | 812.8 |
Total | 30,067.3 | 358.8 | 116.7 | 30,542.8 | 27,485.7 | 628.6 | 78.0 | 28,192.3 |
Society (£m) | 2024 | 2023 | ||||||
Region | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
North | 850.3 | 14.3 | 3.9 | 868.5 | 802.0 | 20.6 | 3.1 | 825.7 |
Yorkshire | 2,315.5 | 30.0 | 9.8 | 2,355.3 | 2,164.0 | 53.7 | 6.9 | 2,224.6 |
East Midlands | 2,024.7 | 26.6 | 7.2 | 2,058.5 | 1,820.6 | 43.1 | 4.6 | 1,868.3 |
East Anglia | 2,814.4 | 43.4 | 11.3 | 2,869.1 | 2,504.4 | 57.1 | 7.6 | 2,569.1 |
London | 4,899.8 | 50.4 | 20.3 | 4,970.5 | 4,328.4 | 100.1 | 10.3 | 4,438.8 |
South East | 4,705.0 | 57.0 | 21.5 | 4,783.5 | 4,168.9 | 100.7 | 13.7 | 4,283.3 |
South West | 2,661.5 | 29.2 | 6.9 | 2,697.6 | 2,486.2 | 63.1 | 4.7 | 2,554.0 |
West Midlands | 2,315.4 | 31.0 | 7.1 | 2,353.5 | 2,048.2 | 50.7 | 5.9 | 2,104.8 |
North West | 2,698.9 | 37.5 | 13.6 | 2,750.0 | 2,496.3 | 73.1 | 10.0 | 2,579.4 |
Wales | 819.6 | 10.3 | 3.9 | 833.8 | 767.8 | 21.6 | 2.2 | 791.6 |
Scotland | 1,929.7 | 19.8 | 6.7 | 1,956.2 | 1,814.1 | 38.7 | 6.1 | 1,858.9 |
Northern Ireland | 11.2 | 0.8 | 1.3 | 13.3 | 11.7 | 1.8 | 2.0 | 15.5 |
Total | 28,046.0 | 350.3 | 113.5 | 28,509.8 | 25,412.6 | 624.3 | 77.1 | 26,114.0 |
Group (£m) | 2024 | 2023 | ||||||
Loan -to-value | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
<40% | 5,891.7 | 72.6 | 21.0 | 5,985.3 | 5,892.2 | 156.8 | 14.5 | 6,063.5 |
40% - 50% | 4,052.9 | 58.7 | 19.8 | 4,131.4 | 4,151.6 | 113.4 | 15.3 | 4,280.3 |
50% - 60% | 4,442.5 | 63.8 | 32.9 | 4,539.2 | 4,410.2 | 131.7 | 18.5 | 4,560.4 |
60% - 70% | 4,622.4 | 60.2 | 16.6 | 4,699.2 | 4,538.0 | 109.2 | 13.3 | 4,660.5 |
70% - 80% | 4,021.4 | 41.5 | 8.7 | 4,071.6 | 3,433.1 | 60.9 | 5.6 | 3,499.6 |
80% - 90% | 5,324.7 | 46.2 | 10.8 | 5,381.7 | 3,271.7 | 43.1 | 4.6 | 3,319.4 |
90% - 100% | 1,687.3 | 14.5 | 3.0 | 1,704.8 | 1,772.9 | 11.2 | 2.7 | 1,786.8 |
>100% | 24.4 | 1.3 | 3.9 | 29.6 | 16.0 | 2.3 | 3.5 | 21.8 |
Total | 30,067.3 | 358.8 | 116.7 | 30,542.8 | 27,485.7 | 628.6 | 78.0 | 28,192.3 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 267
Society (£m) | 2024 | 2023 | ||||||
Loan -to-value | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
<40% | 5,611.6 | 71.9 | 21.0 | 5,704.5 | 5,534.2 | 156.4 | 14.5 | 5,705.1 |
40% - 50% | 3,761.8 | 58.7 | 19.4 | 3,839.9 | 3,807.0 | 113.2 | 15.2 | 3,935.4 |
50% - 60% | 4,036.9 | 61.1 | 32.2 | 4,130.2 | 3,973.8 | 131.3 | 18.4 | 4,123.5 |
60% - 70% | 4,091.1 | 57.3 | 16.5 | 4,164.9 | 4,031.0 | 108.3 | 12.8 | 4,152.1 |
70% - 80% | 3,628.3 | 40.7 | 7.3 | 3,676.3 | 3,047.6 | 59.7 | 5.4 | 3,112.7 |
80% - 90% | 5,235.9 | 45.6 | 10.2 | 5,291.7 | 3,233.8 | 41.9 | 4.6 | 3,280.3 |
90% - 100% | 1,663.2 | 14.5 | 3.0 | 1,680.7 | 1,769.2 | 11.2 | 2.7 | 1,783.1 |
>100% | 17.2 | 0.5 | 3.9 | 21.6 | 16.0 | 2.3 | 3.5 | 21.8 |
Total | 28,046.0 | 350.3 | 113.5 | 28,509.8 | 25,412.6 | 624.3 | 77.1 | 26,114.0 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 268
Group 2024 | Reduced | Transfer to | Term | Total renegotiations | ||||
Total | Capitalisation | Payment | interest only | Extension | ||||
£m | £m | £m | £m | £m | £m | % | ||
Stage 1 | ||||||||
Not past due | 30,067.3 | 0.3 | 27.8 | 6.0 | - | 34.1 | 0.1 | |
30,067.3 | 0.3 | 27.8 | 6.0 | - | 34.1 | 0.1 | ||
Stage 2 | ||||||||
Not past due | 224.2 | 0.2 | 24.0 | 7.9 | - | 32.1 | 14.3 | |
Past due up to 30 days | 72.5 | - | 29.4 | 0.6 | - | 30.0 | 41.4 | |
Over 30 days past due | 62.1 | 0.3 | 24.4 | 1.4 | - | 26.1 | 42.0 | |
358.8 | 0.5 | 77.8 | 9.9 | - | 88.2 | 24.6 | ||
Stage 3 | ||||||||
Not past due | 13.8 | 1.1 | 3.2 | 0.2 | - | 4.5 | 32.6 | |
Past due up to 90 days | 18.0 | 0.2 | 8.9 | 2.0 | - | 11.1 | 61.7 | |
Over 90 days past due | 84.9 | 0.2 | 46.8 | 5.9 | - | 52.9 | 62.3 | |
116.7 | 1.5 | 58.9 | 8.1 | - | 68.5 | 58.7 | ||
Gross carrying amount | 30,542.8 | 2.3 | 164.5 | 24.0 | - | 190.8 | 0.6 | |
Loss allowance | (13.5) | (0.3) | (3.8) | (0.2) | - | (4.3) | 31.9 | |
30,529.3 | 2.0 | 160.7 | 23.8 | - | 186.5 | 0.6 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 269
Group 2023 | Reduced | Transfer to | Term | Total renegotiations | ||||
Total | Capitalisation | Payment | interest only | Extension | ||||
£m | £m | £m | £m | £m | £m | % | ||
Stage 1 | ||||||||
Not past due | 27,485.7 | 0.2 | 15.2 | 3.5 | - | 18.9 | 0.1 | |
27,485.7 | 0.2 | 15.2 | 3.5 | - | 18.9 | 0.1 | ||
Stage 2 | ||||||||
Not past due | 506.4 | 0.3 | 25.7 | 6.5 | - | 32.5 | 6.4 | |
Past due up to 30 days | 67.0 | 0.1 | 21.9 | 0.3 | - | 22.3 | 33.3 | |
Over 30 days past due | 55.2 | - | 20.8 | 1.5 | - | 22.3 | 40.4 | |
628.6 | 0.4 | 68.4 | 8.3 | - | 77.1 | 12.3 | ||
Stage 3 | ||||||||
Not past due | 8.5 | 0.8 | 2.2 | - | - | 3.0 | 35.3 | |
Past due up to 90 days | 12.6 | 0.1 | 5.5 | 0.4 | - | 6.0 | 47.6 | |
Over 90 days past due | 56.9 | 0.6 | 30.7 | 2.9 | 0.1 | 34.3 | 60.3 | |
78.0 | 1.5 | 38.4 | 3.3 | 0.1 | 43.3 | 55.5 | ||
Gross carrying amount | 28,192.3 | 2.1 | 122.0 | 15.1 | 0.1 | 139.3 | 0.5 | |
Loss allowance | (29.0) | (0.3) | (4.4) | (0.2) | - | (4.9) | 16.9 | |
28,163.3 | 1.8 | 117.6 | 14.9 | 0.1 | 134.4 | 0.5 |
Society 2024 | Reduced | Transfer to | Term | Total renegotiations | |||||
Total | Capitalisation | Payment | interest only | Extension | |||||
£m | £m | £m | £m | £m | £m | % | |||
Stage 1 | |||||||||
Not past due | 28,046.0 | 0.3 | 27.8 | 6.0 | - | 34.1 | 0.1 | ||
28,046.0 | 0.3 | 27.8 | 6.0 | - | 34.1 | 0.1 | |||
Stage 2 | |||||||||
Not past due | 220.4 | 0.2 | 22.3 | 5.7 | - | 28.2 | 12.8 | ||
Past due up to 30 days | 70.6 | - | 29.4 | 0.6 | - | 30.0 | 42.5 | ||
Over 30 days past due | 59.3 | 0.3 | 24.4 | 1.4 | - | 26.1 | 44.0 | ||
350.3 | 0.5 | 76.1 | 7.7 | - | 84.3 | 24.1 | |||
Stage 3 | |||||||||
Not past due | 13.8 | 1.1 | 3.2 | 0.2 | - | 4.5 | 32.6 | ||
Past due up to 90 days | 18.0 | 0.2 | 8.9 | 2.0 | - | 11.1 | 61.7 | ||
Over 90 days past due | 81.7 | 0.2 | 46.8 | 5.9 | - | 52.9 | 64.7 | ||
113.5 | 1.5 | 58.9 | 8.1 | - | 68.5 | 60.4 | |||
Gross carrying amount | 28,509.8 | 2.3 | 162.8 | 21.8 | - | 186.9 | 0.7 | ||
Loss allowance | (12.8) | (0.3) | (3.8) | (0.2) | - | (4.3) | 33.6 | ||
28,497.0 | 2.0 | 159.0 | 21.6 | - | 182.6 | 0.6 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 270
Society 2023 | Total | Capitalisation | Reduced | Transfer to | Term | Total renegotiations | ||
£m | £m | Payment | interest only | Extension | £m | % | ||
£m | £m | £m | ||||||
Stage 1 | ||||||||
Not past due | 25,412.6 | 0.2 | 15.2 | 3.5 | - | 18.9 | 0.1 | |
25,412.6 | 0.2 | 15.2 | 3.5 | - | 18.9 | 0.1 | ||
Stage 2 | ||||||||
Not past due | 505.6 | 0.3 | 25.6 | 6.4 | - | 32.3 | 6.4 | |
Past due up to 30 days | 64.2 | 0.1 | 21.9 | 0.3 | - | 22.3 | 34.7 | |
Over 30 days past due | 54.5 | - | 20.8 | 1.5 | - | 22.3 | 40.9 | |
624.3 | 0.4 | 68.3 | 8.2 | - | 76.9 | 12.3 | ||
Stage 3 | ||||||||
Not past due | 8.5 | 0.8 | 2.2 | - | - | 3.0 | 35.3 | |
Past due up to 90 days | 12.4 | 0.1 | 5.5 | 0.4 | - | 6.0 | 48.4 | |
Over 90 days past due | 56.2 | 0.6 | 30.7 | 2.9 | 0.1 | 34.3 | 61.0 | |
77.1 | 1.5 | 38.4 | 3.3 | 0.1 | 43.3 | 56.2 | ||
Gross carrying amount | 26,114.0 | 2.1 | 121.9 | 15.0 | 0.1 | 139.1 | 0.5 | |
Loss allowance | (27.9) | (0.3) | (4.4) | (0.2) | - | (4.9) | 17.6 | |
26,086.1 | 1.8 | 117.5 | 14.8 | 0.1 | 134.2 | 0.5 |
(£m) | Group | Society | ||
2024 | 2023 | 2024 | 2023 | |
Stage 1 | 30,059.9 | 27,480.3 | 28,041.6 | 25,409.8 |
Stage 2 | 358.4 | 628.0 | 350.0 | 623.7 |
Stage 3 | 115.8 | 77.0 | 112.6 | 76.1 |
30,534.1 | 28,185.3 | 28,504.2 | 26,109.6 | |
Gross loan balances | 30,542.8 | 28,192.3 | 28,509.8 | 26,114.0 |
Negative equity | 8.7 | 7.0 | 5.6 | 4.4 |
Capped collateral held in respect of possessions (included in stage 3 above) | 2.9 | 2.2 | 2.9 | 2.2 |
Performance & Strategy Governance Financial Statements
Other Information
2024 (2023: £0.7m) for the Group and for the Society. | 2023 | |||||||
Group & Society (£m) business. | Stage 1 ii) Commercial mortgages | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 The tables below provide information on commercial loans by payment due status. | Stage 3 | Total At 31 December 2024 the contractual amount outstanding on loans written off during the year due to there being no reasonable expectation of recovery, but which remain subject to enforcement activity, is £0.7m The commercial mortgage portfolio (also known as loans fully secured on land) is currently closed to new |
Not past due | 93.9 | 0.4 | 11.3 | 105.6 | 89.6 | 31.7 | 2.1 | 123.4 |
Up to 30 days | - | 2.3 | - | 2.3 | 1.4 | 2.7 | - | 4.1 |
31 to 60 days | - | 2.1 | - | 2.1 | - | 0.4 | - | 0.4 |
61 to 90 days | - | 1.1 | 0.7 | 1.8 | - | 3.0 | 0.2 | 3.2 |
Over 90 days | - | - | 2.5 | 2.5 | - | - | 4.1 | 4.1 |
Total the year. | 93.9 | 5.9 | 14.5 | 114.3 | 91.0 | 37.8 | 6.4 | 135.2 The table below provides information on movements in the gross carrying amount of commercial loans during |
Skipton Group Annual Report & Accounts 2024 271 |
Performance & Strategy Governance Financial Statements
Other Information
2024 | 2023 | |||||||
Group & Society (£m) 1h)). | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 2024, stage 3 loans include £nil being held in stage 3 under this probation period (2023: £nil). | Total Gains and losses arising during the year from loan modifications that did not result in derecognition were not significant. Amounts written off are in accordance with the Group’s accounting policy for write-offs (see Note For commercial loans, stage 3 loans which no longer meet any of the default criteria are subject to a three month minimum probation period before they become eligible for transfer out of stage 3. At 31 December The table below provides information on movements in the impairment loss allowance for commercial loans |
Loss allowance at 1 January | 0.6 | 6.6 | 1.8 | 9.0 | 1.3 | 7.8 | 0.8 | 9.9 |
Transfers due to changes in credit | ||||||||
risk: during the year. | ||||||||
From stage 1 to stage 2 | - | - | - | - | - | 0.1 | - | 0.1 |
From stage 2 to stage 1 | - | (1.9) | - | (1.9) | - | (0.2) | - | (0.2) |
From stage 2 to stage 3 | - | (0.4) | 0.4 | - | - | - | - | - |
Remeasurements within existing | (0.3) | (0.1) | - | (0.4) | (0.5) | (0.1) | - | (0.6) |
stage | ||||||||
Decrease due to derecognition and repayments | (0.1) | (0.9) | (1.1) | (2.1) | (0.2) | (0.6) | - | (0.8) |
Changes due to modification | - | (3.1) | 3.3 | 0.2 | - | (0.4) | 1.0 | 0.6 |
without derecognition | ||||||||
Written off | - | - | (0.1) | (0.1) | - | - | - | - |
Loss allowance at 31 December | 0.2 | 0.2 | 4.3 | 4.7 | 0.6 | 6.6 | 1.8 | 9.0 |
ECL coverage (%) | 0.21% | 3.39% | 29.66% | 4.11% | 0.66% | 17.46% | 28.13% | 6.66% |
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Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 273
Group & Society (£m) | 2024 | 2023 | ||||||
Geographical analysis (Region) | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
North | 2.9 | 0.3 | - | 3.2 | 2.6 | 1.4 | 0.7 | 4.7 |
Yorkshire | 6.2 | 0.3 | 5.7 | 12.2 | 6.5 | 6.8 | 0.1 | 13.4 |
East Midlands | 3.2 | - | 2.3 | 5.5 | 3.1 | 5.1 | - | 8.2 |
East Anglia | 9.6 | 0.1 | - | 9.7 | 10.8 | - | - | 10.8 |
London | 22.8 | 2.1 | 0.7 | 25.6 | 24.1 | 5.0 | 1.0 | 30.1 |
South East | 15.5 | 1.2 | - | 16.7 | 12.6 | 5.0 | 0.7 | 18.3 |
South West | 12.0 | 0.4 | 0.4 | 12.8 | 8.2 | 5.6 | 0.4 | 14.2 |
West Midlands | 7.0 | 0.6 | 2.3 | 9.9 | 7.5 | 3.3 | - | 10.8 |
North West | 10.5 | 0.9 | 2.1 | 13.5 | 11.3 | 3.9 | 3.0 | 18.2 |
Wales | 2.4 | - | 0.7 | 3.1 | 2.4 | 1.5 | - | 3.9 |
Scotland | 1.8 | - | 0.3 | 2.1 | 1.9 | 0.2 | 0.5 | 2.6 |
Total | 93.9 | 5.9 | 14.5 | 114.3 | 91.0 | 37.8 | 6.4 | 135.2 |
Group & Society (£m) | 2024 | 2023 | ||||||
Loan -to-value | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
<40% | 27.4 | 1.0 | 2.0 | 30.4 | 32.7 | 3.4 | 1.1 | 37.2 |
40% - 50% | 18.5 | 1.1 | 0.6 | 20.2 | 17.9 | 1.7 | 0.9 | 20.5 |
50% - 60% | 16.6 | 1.2 | 1.2 | 19.0 | 14.3 | 5.0 | 0.1 | 19.4 |
60% - 70% | 6.3 | 1.4 | 0.1 | 7.8 | 7.8 | 2.8 | 0.1 | 10.7 |
70% - 80% | 7.4 | 0.5 | 1.3 | 9.2 | 8.1 | 1.3 | - | 9.4 |
80% - 90% | 9.3 | 0.3 | - | 9.6 | 3.4 | 5.4 | - | 8.8 |
90% - 100% | 5.4 | 0.4 | - | 5.8 | 4.6 | 1.7 | 0.8 | 7.1 |
>100% | 3.0 | - | 9.3 | 12.3 | 2.2 | 16.5 | 3.4 | 22.1 |
Total | 93.9 | 5.9 | 14.5 | 114.3 | 91.0 | 37.8 | 6.4 | 135.2 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 274 | |||||||
2023 | ||||||
Group & Society | Reduced | Transfer to | Total renegotiations | |||
Total | Payment | interest only | £m | % | ||
£m | £m | £m | ||||
Stage 1 | ||||||
Not past due | 89.6 | 0.1 | 0.6 | 0.7 | 0.8 | |
Past due up to 30 days | 1.4 | 0.1 | - | 0.1 | 7.1 | |
91.0 | 0.2 | 0.6 | 0.8 | 0.9 | ||
Stage 2 | ||||||
Not past due | 31.7 | - | 7.6 | 7.6 | 24.0 | |
Past due up to 30 days | 2.7 | 0.6 | - | 0.6 | 22.2 | |
Over 30 days past due | 3.4 | 1.8 | - | 1.8 | 52.9 | |
37.8 | 2.4 | 7.6 | 10.0 | 26.5 | ||
Stage 3 | ||||||
Not past due | 2.1 | 0.1 | 1.3 | 1.4 | 66.7 | |
Past due up to 90 days | 0.2 | 0.2 | - | 0.2 | 100.0 | |
Over 90 days past due | 4.1 | 2.5 | 1.0 | 3.5 | 85.4 | |
6.4 | 2.8 | 2.3 | 5.1 | 79.7 | ||
Gross carrying amount | 135.2 | 5.4 | 10.5 | 15.9 | 11.8 | |
Loss allowance | (9.0) | (1.2) | (3.7) | (4.9) | 54.4 | |
126.2 | 4.2 | 6.8 | 11.0 | 8.7 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 275
to the latest external valuation of the properties in question. The total fair value of collateral held in respect of
commercial loans for the Group and the Society at 31 December 2024 is £270.5m (2022: £318.0m).
(2023: £nil) for the Group and the Society.
iii) Other lending
Group & Society (£m) | 2024 | 2023 |
Stage 1 | 93.2 | 90.8 |
Stage 2 | 5.9 | 34.5 |
Stage 3 | 12.3 | 5.1 |
Total | 111.4 | 130.4 |
Gross loan balances | 114.3 | 135.2 |
Negative equity | 2.9 | 4.8 |
Capped collateral held in respect of possessions (included within stage 3 above) | - | - |
2024 | 2023 | |||||
Group (£m) | Gross | ECL | Net | Gross | ECL | Net |
carrying | allowance | carrying | carrying | allowance | carrying | |
amount | amount | amount | amount | |||
Debt factoring advances | 190.0 | (1.4) | 188.6 | 171.2 | (1.6) | 169.6 |
Other loans | 48.2 | - | 48.2 | 53.2 | - | 53.2 |
Total advances during the year. | 238.2 | (1.4) | 236.8 | 224.4 | (1.6) | 222.8 The table below provides information on movements in the gross carrying amount of other loans and |
2024 | 2023 | |||||||
Group (£m) | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
Gross carrying amount at 1 January | 219.6 | 4.3 | 0.5 | 224.4 | 200.4 | 5.6 | 0.1 | 206.1 |
Transfers due to changes in credit risk (note A): | ||||||||
From stage 1 to stage 2 | (3.4) | 3.4 | - | - | (4.1) | 4.1 | - | - |
From stage 1 to stage 3 | (0.4) | - | 0.4 | - | (0.2) | - | 0.2 | - |
From stage 2 to stage 1 | 2.3 | (2.3) | - | - | 3.6 | (3.6) | - | - |
From stage 2 to stage 3 | - | (1.6) | 1.6 | - | - | (0.7) | 0.7 | - |
From stage 3 to stage 2 | - | 0.3 | (0.3) | - | - | - | - | - |
From stage 3 to stage 1 | 0.3 | - | (0.3) | - | - | - | - | - |
Modification of contractual | - | - | - | - | 0.1 | - | - | 0.1 |
cashflows | ||||||||
Increases due to origination | 74.2 | - | - | 74.2 | 68.0 | - | - | 68.0 |
Decrease due to derecognition | (58.1) | (1.8) | - | (59.9) | (48.2) | (1.1) | (0.1) | (49.4) |
and repayments | ||||||||
Write -offs | - | - | (0.6) | (0.6) | - | - | (0.4) | (0.4) |
Other movements | - | - | 0.1 | 0.1 | - | - | - | - |
Gross carrying amount at 31 | 234.5 | 2.3 | 1.4 | 238.2 | 219.6 | 4.3 | 0.5 | 224.4 |
December |
Performance & Strategy Governance Financial Statements
Other Information
2024 | 2023 | |||||||
Group (£m) | Stage 1 advances during the year. | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total The table below provides information on movements in the impairment loss allowance for other loans and |
Loss allowance at 1 January | 0.2 | 1.1 | 0.3 | 1.6 | 0.1 | 1.1 | - | 1.2 |
Transfers due to changes in credit risk: | ||||||||
From stage 1 to stage 2 | (0.1) | 1.0 | - | 0.9 | - | 1.3 | - | 1.3 |
From stage 1 to stage 3 | - | - | - | - | - | - | 0.1 | 0.1 |
From stage 2 to stage 1 | - | (0.3) | - | (0.3) | - | (0.5) | - | (0.5) |
From stage 2 to stage 3 | - | (1.0) | 1.0 | - | - | (0.6) | 0.6 | - |
From stage 3 to stage 1 | 0.1 | - | (0.1) | - | - | - | - | - |
Remeasurements within existing | (0.2) | - | (0.2) | 0.1 | (0.2) | - | (0.1) | |
stage Debt factoring advances | ||||||||
Write -offs | - | - | (0.6) | (0.6) | - | - | (0.4) | (0.4) |
Loss allowance at 31 December due. | 0.2 | 0.6 | 0.6 Group’s debt factoring and invoice discounting business. | 1.4 | 0.2 | 1.1 | 0.3 | 1.6 Debt factoring advances relate to amounts advanced to clients by Skipton Business Finance Limited (SBF), the Credit risk is predominantly managed by rigorous due diligence controls and regular monitoring of client accounts, and includes the use of concentration limits, credit reference checks and ‘watchlists’ on clients’ debtors. Advances are typically made to clients only against notified invoices that are less than 90 days past Debt factoring and invoice discounting advances are typically secured via a legal charge against the relevant |
Skipton Group Annual Report & Accounts 2024 276 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 277
Rating | Group | Society | ||||||
2024 | 2024 | 2023 | 2023 | 2024 | 2024 | 2023 | 2023 | |
£m | % | £m | % | £m | % | £m | % | |
Aaa | 2,429.6 | 36.3 | 1,903.9 | 26.8 | 2,666.1 | 40.0 | 1,950.1 | 28.0 |
Aa1 | 268.2 | 4.0 | 90.5 | 1.3 | 268.2 | 4.0 | 90.5 | 1.3 |
Aa2 | 0.1 | - | 6.7 | 0.1 | - | - | 6.7 | 0.1 |
Aa3 | 3,605.1 | 53.8 | 4,543.7 | 64.1 | 3,336.4 | 50.0 | 4,356.3 | 62.4 |
A1 | 117.3 | 1.8 | 236.8 | 3.3 | 72.1 | 1.1 | 192.5 | 2.8 |
A2 | 1.0 | - | 0.9 | - | - | - | - | - |
Unrated | 273.5 | 4.1 | 310.2 | 4.4 | 325.7 | 4.9 | 374.3 | 5.4 |
Total | 6,694.8 | 100.0 | 7,092.7 | 100.0 | 6,668.5 | 100.0 | 6,970.4 | 100.0 |
Performance & Strategy Governance Financial Statements
Other Information
Industry sector / asset class | Group | Society | ||||||
2024 | 2024 | 2023 | 2023 | 2024 | 2024 | 2023 | 2023 | |
£m | % | £m | % | £m | % | £m | % | |
Cash in hand and balances with the Bank of England | 1,930.6 | 28.9 | 3,266.2 | 46.0 | 1,930.6 | 29.0 | 3,266.2 | 46.9 |
Loans and advances to banks and building societies | 414.6 | 6.2 | 488.8 | 6.9 | 397.8 | 6.0 | 497.7 | 7.1 |
Gilts | 1,086.5 | 16.2 | 409.2 | 5.8 | 1,086.5 | 16.3 | 369.3 | 5.3 |
Certificates of deposit | - | - | 97.9 | 1.4 | - | - | 97.9 | 1.4 |
Fixed rate bonds | 1,274.9 | 19.0 | 584.0 | 8.2 | 1,274.9 | 19.1 | 584.0 | 8.4 |
Floating rate notes | - | - | 219.8 | 3.1 | - | - | 169.6 | 2.4 |
Treasury bills | 598.2 | 8.9 | 860.0 | 12.1 | 321.2 | 4.8 | 702.9 | 10.1 |
Covered bonds | 770.1 | 11.5 | 758.6 | 10.7 | 770.1 | 11.5 | 758.6 | 10.9 |
Residential mortgage backed | 619.9 | 9.3 | 408.2 | 5.8 | 887.4 | 13.3 | 524.2 | 7.5 |
securities | ||||||||
Total | 6,694.8 | 100.0 | 7,092.7 | 100.0 | 6,668.5 | 100.0 | 6,970.4 | 100.0 |
Skipton Group Annual Report & Accounts 2024 278
Geographical exposure (Region) | Group | Society | ||||||
2024 | 2024 | 2023 | 2023 | 2024 | 2024 | 2023 | 2023 | |
£m | % | £m | % | £m | % | £m | % | |
UK | 5,331.5 | 79.7 | 6,174.1 | 87.1 | 5,393.6 | 81.0 | 6,158.3 | 88.3 |
Rest of Europe | 327.9 | 4.9 | 144.4 | 2.0 | 293.3 | 4.4 | 109.7 | 1.0 |
Supranationals: | ||||||||
Europe | 122.4 | 1.8 | 192.8 | 2.7 | 122.4 | 1.8 | 152.6 | 2.8 |
Global | 528.4 | 7.9 | 335.9 | 4.8 | 528.4 | 7.9 | 335.9 | 4.8 |
Africa | 28.4 | 0.4 | 27.5 | 0.4 | 28.4 | 0.4 | 27.5 | 0.4 |
Asia | 135.2 | 2.0 | 106.5 | 1.5 | 135.2 | 2.0 | 106.5 | 1.5 |
South America | 117.7 | 1.8 | 27.1 | 0.4 | 117.7 | 1.8 | 27.1 | 0.4 |
North America | 100.2 | 1.5 | 81.3 | 1.1 | 49.5 | 0.7 | 52.8 | 0.8 |
Rest of World | 3.1 | - | 3.1 | - | - | - | - | - |
Total | 6,694.8 | 100.0 | 7,092.7 | 100.0 | 6,668.5 | 100.0 | 6,970.4 | 100.0 |
(£m) | Group | Society | |||
2024 | 2023 | 2024 | 2023 | ||
Gross carrying amount | 71.0 | 60.4 | 1.9 | 1.8 | |
Loss allowance | (2.2) | (2.4) | - | - | |
Net carrying amount | 68.8 | 58.0 | 1.9 | 1.8 |
Performance & Strategy Governance Financial Statements
Other Information
(£m) | Group | Society | ||||
2024 | 2023 | 2024 | 2023 | |||
Loss allowance at 1 January | 2.4 | 3.7 | - | - | ||
Net allowances made during the year | 0.8 | 0.9 | - | - | ||
Write -offs | (1.0) | (2.2) | - | - | ||
Loss allowance at 31 December | 2.2 | 2.4 | - | - |
(£m) | Group | Society | |||
2024 | 2023 | 2024 | 2023 | ||
Not past due | 38.3 | 31.9 | - | - | |
Up to 30 days past due | 19.5 | 14.1 | 0.5 | 0.2 | |
31 to 120 days past due | 9.5 | 11.4 | 1.0 | 0.9 | |
Over 120 days past due | 3.7 | 3.0 | 0.4 | 0.7 | |
Total | 71.0 | 60.4 | 1.9 | 1.8 |
Skipton Group Annual Report & Accounts 2024 279
Performance & Strategy Governance Financial Statements
Other Information
Group (£m) | 2023 | |||
As reported | Netting | Cash | Net amounts | |
within SOFP | agreements | collateral | after offsetting | |
Financial assets | ||||
Derivative financial instruments | 1,000.8 | (381.3) | (603.7) | 15.8 |
Financial liabilities | ||||
Derivative financial instruments | 452.2 | (381.3) | (43.9) | 27.0 |
Society (£m) | 2024 | ||||
As reported | Netting | Cash | Net amounts | ||
within SOFP | agreements | collateral | after offsetting | ||
Financial assets | |||||
Derivative financial instruments | 743.0 | (208.3) | (557.3) | - | |
Financial liabilities | |||||
Derivative financial instruments | 282.2 | (208.3) | (70.4) | 3.5 |
Group (£m) | 2024 | ||||
As reported | Netting | Cash | Net amounts | ||
within SOFP | agreements | collateral | after offsetting | ||
Financial assets | |||||
Derivative financial instruments | 752.1 | (204.2) | (557.3) | - | |
Financial liabilities | |||||
Derivative financial instruments | 225.1 | (204.2) | (18.1) | 2.8 |
Skipton Group Annual Report & Accounts 2024 280
Society (£m) | 2023 | ||||
As reported | Netting | Cash | Net amounts | ||
within SOFP | agreements | collateral | after offsetting | ||
Financial assets | |||||
Derivative financial instruments | 1,003.0 | (394.2) | (603.7) | 5.1 | |
Financial liabilities | |||||
Derivative financial instruments | 508.7 | (394.2) | (108.1) | 6.4 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 281 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 282 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 283
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 284 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 285 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 286
Equity | Equity | Loans and | Derivative | Fair value of | Share | Other | |||
Group 2023 (£m) | share | release | advances | financial | put option | warrants | assets | Total | |
investments | portfolio | to customers instruments | obligation | ||||||
At 1 January | 1.1 | 278.7 | 1.0 | (26.5) | (3.8) | 26.6 | 1.4 | 278.5 | |
Gain recognised in | A | B | C | D E | |||||
0.5 | 9.2 | - | 1.8 | 0.3 | 13.3 | - | 25.1 | ||
Income Statement | |||||||||
Revaluations to goodwill | - | - | - | - | (0.4) | - | - | (0.4) | |
Accrued interest | - | 9.9 F | 0.1 F | 2.0 F | - | - | - | 12.0 | |
Repayments | - | (3.7) | (0.2) | - | - | - | - | (3.9) | |
Realised losses | - | (0.8) G | - | - | - | - | - | (0.8) | |
Exercise of put | |||||||||
options by non - controlling | - | - | - | - | 0.4 | - | - | 0.4 | |
Additions / other | 8.9 | - | - | - | - | (24.8) | (1.4) | (17.3) | |
At 31 December | 10.5 | 293.3 | 0.9 | (22.7) | (3.5) | 15.1 | - | 293.6 | |
Equity | Equity | Loans and | Derivative | Fair value of | Share | ||
Group 2024 (£m) | share | release | advances | financial | put option | warrants | Total |
investments | Portfolio | to customers | instruments | obligation | |||
At 1 January | 10.5 | 293.3 | 0.9 | (22.7) | (3.5) | 15.1 | 293.6 |
Gain / (loss) | |||||||
recognised in Income | 1.1 A | (12.6) B | - | 21.9 C | (0.3) D | 5.9 E | 16.0 |
Statement | |||||||
Revaluations to goodwill | - | - | - | - | (0.3) | - | (0.3) |
Accrued interest | - | 2.6 F | 0.1 F | - | - | - | 2.7 |
Repayments | - | (4.3) | (0.1) | - | - | - | (4.4) |
Realised losses | - | (1.8) G | - | - | - | - | (1.8) |
Additions / other | 5.3 | - | - | - | - | 0.9 | 6.2 |
At 31 December | 16.9 | 277.2 | 0.9 | (0.8) | (4.1) | 21.9 | 312.0 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 287
Equity | Loans and | Derivative | ||
Society 2024 (£m) | release | advances | financial | Total |
portfolio | to customers | instruments | ||
At 1 January | 293.3 | 0.9 | (34.2) | 260.0 |
(Loss) / gain recognised in Income Statement | (12.6) A | - | 29.0 B | 16.4 |
Accrued interest | 2.6 C | 0.1 C | - | 2.7 |
Repayments | (4.3) | (0.1) | - | (4.4) |
Realised losses | (1.8) D | - | - | (1.8) |
At 31 December | 277.2 | 0.9 | (5.2) | 272.9 |
Equity | Loans and | Derivative | ||
Society 2023 (£m) | release | advances | financial | Total |
portfolio | to customers | instruments | ||
At 1 January | 278.7 | 1.0 | (42.8) | 236.9 |
Gain recognised in Income Statement | 9.2 A | - | 6.6 B | 15.8 |
Accrued interest | 9.9 C | 0.1 C | 2.0 C | 12.0 |
Repayments | (3.7) | (0.2) | - | (3.9) |
Realised losses | (0.8) D | - | - | (0.8) |
At 31 December | 293.3 | 0.9 | (34.2) | 260.0 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 288
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 289
(£m) | Group 2024 | Society 2024 | ||
Carrying Value | Fair Value | Carrying Value | Fair Value | |
Financial assets | ||||
Cash in hand and balances with the Bank of England | 1,930.6 | 1,930.6 | 1,930.6 | 1,930.6 |
Loans and advances to credit institutions | 414.6 | 414.6 | 397.8 | 397.8 |
Loans and advances to customers | 30,601.1 | 30804.7 | 28334.9 | 28,531.4 |
Trade receivables | 68.8 | 68.8 | 1.9 | 1.9 |
Loans to subsidiary undertakings | - | - | 403.9 | 403.9 |
Other assets | 0.1 | 0.1 | - | - |
33,015.2 | 33,218.8 | 31,069.1 | 31,265.6 | |
Financial liabilities | ||||
Shares | 28,268.5 | 28,239.2 | 28,254.1 | 28,239.2 |
Amounts owed to credit institutions | 1,599.6 | 1,599.6 | 1,800.6 | 1,800.6 |
Amounts owed to other customers | 2,751.1 | 2,753.8 | 1,268.9 | 1,268.7 |
Debt securities in issue | 2,435.3 | 2,423.1 | 1,930.1 | 1,930.9 |
Lease liabilities | 92.1 | 92.1 | 8.6 | 8.6 |
Trade payables | 11.0 | 11.0 | 2.8 | 2.8 |
Subordinated liabilities | 690.2 | 700.4 | 690.2 | 700.4 |
Subscribed capital | 41.6 | 61.8 | 41.6 | 61.8 |
35,889.4 | 35,881.0 | 33,996.9 | 34,013.0 |
(£m) | Group 2023 | Society 2023 | ||
Carrying Value | Fair Value | Carrying Value | Fair Value | |
Financial assets | ||||
Cash in hand and balances with the Bank of England | 3,266.2 | 3,266.2 | 3,266.2 | 3,266.2 |
Loans and advances to credit institutions | 488.8 | 488.8 | 497.7 | 497.7 |
Loans and advances to customers | 28,161.4 | 27,965.8 | 25,864.9 | 25,713.6 |
Trade receivables | 58.0 | 58.0 | 1.8 | 1.8 |
Loans to subsidiary undertakings | - | - | 372.7 | 372.7 |
Other assets | 0.2 | 0.2 | - | - |
31,974.6 | 31,779.0 | 30,003.3 | 29,852.0 | |
Financial liabilities | ||||
Shares | 25,949.8 | 25,913.1 | 25,922.3 | 25,913.1 |
Amounts owed to credit institutions | 2,093.4 | 2,093.4 | 2,302.7 | 2,302.7 |
Amounts owed to other customers | 2,808.8 | 2,820.6 | 807.7 | 807.8 |
Debt securities in issue | 2,414.7 | 2,408.4 | 2,242.5 | 2,222.2 |
Lease liabilities | 103.0 | 103.0 | 10.3 | 10.3 |
Trade payables | 10.2 | 10.2 | 2.3 | 2.3 |
Subordinated liabilities | 685.3 | 682.9 | 685.3 | 682.9 |
Subscribed capital | 41.6 | 57.8 | 41.6 | 57.8 |
34,106.8 | 34,089.4 | 32,014.7 | 31,999.1 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 290
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 291 | |||||
Group £m | 2024 | ||||
Society | SIL | Connells | Other^ | Total | |
External Income | 550.2 | 1.4 | 1,051.4 | 16.2 | 1,619.2 |
Income from other segments | (88.7) | 50.6 | 17.6 | 20.5 | - |
Total Income | 461.5 | 52.0 | 1,069.0 | 36.7 | 1,619.2 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 292 | |||||
Group (£m) | 2023 | ||||
Society | SIL | Connells | Other^ | Total | |
External Income | 614.5 | 5.7 | 937.2 | (2.8) | 1,554.6 |
Income from other segments | (95.1) | 54.0 | 13.7 | 27.4 | - |
Total Income | 519.4 | 59.7 | 950.9 | 24.6 | 1,554.6 |
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 293
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 295
Nature of the Group’s activities
The Skipton Building Society Group holds an investment in a number of subsidiary undertakings. The Society
and the majority of its subsidiary undertakings are incorporated in the UK, with the exception of the entities
listed below. For a full list of the principal trading subsidiaries in the Group and the nature of their activities, see
Note 20a) of the financial statements.
At 31 December 2024, Jade Software Corporation Limited also held a 100% ownership in the following trading
subsidiary undertakings, all of which carry out the principal business activity of the Jade group of businesses.
In addition, the Group holds a non-controlling interest of 17.7% in Wynyard Group Limited, which entered
liquidation in February 2017 and which is incorporated in New Zealand.
Country by country disclosures
An analysis of turnover, which is regarded as total income as defined below (and which excludes dividend
income from subsidiaries), profit before tax, the current tax charge, corporation taxes paid, public subsidies
received and the average number of employees on a full-time equivalent basis is set out below. The
information presented is at a full Group level of consolidation.
Total income is defined as net interest income plus fees and commissions receivable (net of fees and
commissions payable), together with all other components of operating income. Total gross income and total
gross profit before tax, for each country, represents consolidated income or profit before tax for that country.
Name of subsidiary undertaking Principal business activity
Country of
incorporation
% ownership
Interest
31.12.24
Jade Software Corporation Limited
Provider of software development services
New Zealand 100%
Northwest Investments NZ Limited
Provider of software development services
New Zealand 100%
Skipton International Limited
Offshore deposit taker and lender
Guernsey 100%
2024 (£m) UK Australia Guernsey
New
Zealand
Jersey Total
Current tax expense*
67.1
-
2.7
-
0.4
70.2
Corporation taxes paid
64.0
-
3.6
-
0.7
68.3
Public subsidies received^
-
-
-
0.2
-
0.2
Average number of employees
16,572
14
105
225
35
16,950
Name of subsidiary undertaking Country of incorporation
Jade Software Corporation (NZ) Limited
New Zealand
Jade Software Corporation Pty Limited
Australia
Jade Software Corporation UK Limited
UK
2024 (£m) UK Australia Guernsey
New
Zealand
Jersey Total
Total income by country
1,551.7
3.0
42.8
17.8
9.2
1,624.5
Inter
-country adjustments
54.1
-
(54.1)
(5.3)
-
(5.3)
Consolidated income
1,605.8
3.0
(11.3)
12.5
9.2
1,619.2
Profit before tax by country
285.9
0.1
27.1
1.3
4.2
318.6
Inter
-country adjustments
59.8
1.3
(53.4)
(7.7)
-
-
Consolidated profit before tax
345.7
1.4
(26.3)
(6.4)
4.2
318.6
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 296
2023 (£m) UK Australia Guernsey
New
Zealand
Jersey Total
Current tax expense
75.6
0.1
4.0
(0.1)
0.7
80.3
Corporation taxes paid
54.3
0.1
3.0
-
0.9
58.3
Public subsidies received^
-
-
-
0.3
-
0.3
Average number of employees
17,235
13
77
236
6
17,567
2023 (£m) UK Australia Guernsey
New
Zealand
Jersey Total
Total income by country
1,476.7
3.9
49.6
18.1
10.1
1,558.4
Inter
-country adjustments
53.9
-
(53.9)
(3.8)
-
(3.8)
Consolidated income
1,530.6
3.9
(4.3)
14.3
10.1
1,554.6
Profit before tax by country
284.0
0.3
41.1
1.0
7.0
333.4
Inter
-country adjustments
57.6
1.9
(53.2)
(6.3)
-
-
Consolidated profit before tax
341.6
2.2
(12.1)
(5.3)
7.0
333.4
Performance & Strategy Governance Financial Statements
Other Information
* The current tax expense in the UK includes a Pillar 2 top-up charge in the Society.
^ Public subsidies received relate to cash payments received from governments in the form of grants.
Skipton Group Annual Report & Accounts 2024 297
These percentages form part of the audited Accounts.
Explanation
The above percentages have been calculated in accordance with the provisions of the Building Societies Act
1986.
The lending limit measures the proportion of business assets not in the form of loans fully secured on
residential property. Business assets are defined as the total assets of the Group plus provisions for
impairment losses on loans and receivables, less liquid assets, intangible assets, property, plant and
equipment, right-of-use assets and investment property as shown within the Group Statement of Financial
Position.
The funding limit measures the proportion of shares and borrowings (excluding the fair value adjustment for
hedged risk) not in the form of shares held by individuals. We have taken advantage of the relief set out in SI
2007/No 860, effective from April 2007, to exclude retail offshore deposits from the total of wholesale funds.
The statutory limits are as laid down under the Building Societies Act 1986 and ensure that the principal
purpose of a building society is that of making loans which are secured on residential property and are funded
substantially by its members.
These percentages form part of the audited Accounts.
Explanation
The above percentages have been calculated from the Group and Society Income Statements and Statements
of Financial Position.
Shares, deposits and borrowings represent the total of shares, amounts owed to credit institutions, amounts
owed to other customers and debt securities in issue, including accrued interest and the fair value adjustments
for hedged risk.
Gross capital represents the general reserve together with the fair value reserve, cash flow hedging reserve,
cost of hedging reserve, translation reserve, subordinated liabilities, subscribed capital and non-controlling
interests, as shown within the Group Statement of Financial Position. Free capital represents gross capital,
less property, plant and equipment, right-of-use assets, investment property and intangible assets as shown
within the Group Statement of Financial Position.
Liquid assets represent the total of cash in hand and balances with the Bank of England, loans and advances
to credit institutions and debt securities. Mean total assets are the average of the 2024 and 2023 total assets.
Management expenses represent administrative expenses.
1. Statutory percentages
£m
As at December 2024 (%)
Statutory Limit (%)
Lending limit
3.29
25.00
Funding limit
14.38
50.00
2. Other percentages
£m 2024 (%) 2023 (%)
As a percentage of shares and borrowings:
(i) Gross capital
9.70
9.46
(ii) Free capital
8.31
7.98
(iii) Liquid assets
19.10
21.32
As a percentage of mean total assets:
(i) Group profit after taxation
0.63
0.72
(ii) Group management expenses
3.44
3.46
(iii) Society management expenses
0.73
0.72
As a percentage of closing total assets:
(i) Group profit after tax
0.62
0.68
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 298
3. Information relating to Directors at 31 December 2024
The Board of Directors at 31 December 2024, their dates of birth and dates of appointment as a Director are as
follows:
*Executive Directors
Documents may be served on any of the above-named Directors at the following address: Addleshaw Goddard,
3 Sovereign Square, Sovereign Street, Leeds, LS1 4ER.
The Directors’ business occupations and other directorships at 31 December 2024 were as follows:
Director Date of Birth Date of Appointment
A P Bottomley*
12 July 1965 1 January 2016
G V Burr
12 January 1963 27 April 2022
P S Chambers*
26 April 1967 26 March 2024
I A Cummings
22 October 1961 1 July 2022
S J Davis
28 June 1963 3 April 2023
H I Gunawickrema
10 April 1978 1 November 2024
S A Haire*
18 April 1974 31 December 2022
D A Hall
9 November 1955 27 March 2017
H L Jackson
23 August 1965 24 October 2018
M J Lund
1 July 1957 25 April 2016
P W Moore
5 January 1960 1 February 2021
Director Skipton Group Role Other directorships held
A P Bottomley
Building Society Chief Executive Officer
– Money
(Member of the Group Executive
Committee, Member of the Non-
Executive Remuneration Committee)
Amber Homeloans Limited
Bailey Computer Services Limited
Skipton Financial Services Limited
Skipton Group Holdings Limited
Skipton Trustees Limited
The New Homes Group Limited
G V Burr
Non-executive Director
(Chair of the Board, Chair of the Board
Nominations Committee, Chair of the
Non-Executive Remuneration
Committee)
Ingleby Farms & Forests Limited
Metro AG
Skipton Group Holdings Limited
P S Chambers
Building Society Group
Chief Financial
Officer
(Member of the Group Executive
Committee, Member of the Non-
Executive Remuneration Committee)
Skipton Financial Services Limited
Skipton Group Holdings Limited
Skipton Investments Limited
Skipton Mortgage Corporations Limited
Skipton Mortgages Limited
I A Cummings
Non-executive Director
(Chair of the Board Audit Committee,
Member of the Board Change
Committee, Member of the Board
Nominations Committee, Member of the
Board Risk Committee)
Investec Wealth & Investment Limited
Rathbones Group PLC
Rathbone Investment Management
Limited
Skipton Group Holdings Limited
TFS Derivatives Limited
Tradition Financial Services
Tradition London Clearing Limited
Tradition Management Services Limited
Tradition (UK) Limited
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 299
3. Information relating to Directors at 31 December 2024 (continued)
Director Skipton Group Role Other directorships held
S J Davis
Non-executive Director
(Chair of the Board Remuneration
Committee, member of the Board
Nominations Committee)
Skipton Group Holdings Limited
Peter Vardy Group
Philip Kingsley Group
Scottish Ballet
H I Gunawickrema
Non-executive Director
(Member of the Board Nominations
Committee)
HIG Advisory Limited
Skipton Group Holdings Limited
S A Haire
Building Society Group Chief Executive
(Chair of the Group Executive
Committee, Member of the Non-
Executive Remuneration Committee)
Skipton Group Holdings Limited
D A Hall
Non-executive Director
(Chair of the Board Risk Committee,
Member of the Board Audit Committee,
Member of the Board Nominations
Committee)
Aareal Bank AG
Auxmoney Europe Holding Limited
Moneta Money Bank
Skipton Group Holdings Limited
H L Jackson
Non-executive Director
(Chair of the Board Change Committee,
Member of the Board Nominations
Committee, Member of the Board
Remuneration Committee, Member of
the Board Risk Committee)
Admiral Long Foundation
Ikano Bank AB
Rothesay Life PLC
Rothesay Limited
Skipton Group Holdings Limited
The Veterinary Defence Society
Yorkshire Cancer Research
M J Lund
Non-executive Director
(Deputy Chair of the Board, Senior
Independent Director, Member of the
Board Audit Committee, Member of the
Board Nominations Committee, Member
of the Board Remuneration Committee,
Chair and independent non-executive
director of Connells)
Connells Limited
Coutts & Company
Skipton Group Holdings Limited
P W Moore
Non-executive Director
(Member of the Board Audit Committee,
Member of the Board Nominations
Committee, Member of the Board Risk
Committee, Non-
executive director of
Connells, Chair of Connells’ Audit and
Risk Committee)
Bank of Ireland (UK) PLC
Connells Limited
Hart Learning Group (including North
Hertfordshire College)
Skipton Group Holdings Limited
St Mungos
St Mungo Community Housing
Association
Wesleyan Assurance Society
Messrs Bottomley, Chambers and Haire have service contracts entered into on 1 January 2016, 6 February
2024 and 14 July 2022 respectively which may be terminated by either party giving one year’s notice.
4. Principal office
of the principal office is The Bailey, Skipton, North Yorkshire, BD23 1DN
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 300
Set out below are the definitions of terms used within the Annual Report and Accounts to assist the reader and
to facilitate comparison with other financial institutions:
Arrears
A customer is in arrears when they are behind in fulfilling their obligations with the result that
an outstanding loan commitment is overdue.
Asset backed
securities (ABS)
An asset backed security is a security whose value and income payments are derived from
and collateralised (or ‘backed’) by a specified pool of underlying assets. Typically, these
assets are pools of residential or commercial mortgages.
Buy
-to-let mortgages
Mortgages offered to customers purchasing residential property to be rented to others to
generate a rental income.
Common Equity Tier 1
capital
Common Equity Tier 1 (CET1) capital primarily comprises internally generated capital from
retained profits, less regulatory adjustments. CET1 capital is fully loss absorbing.
Contractual maturity
The final payment date of a loan or other financial instrument, at which point the entire
remaining outstanding principal and interest is due to be repaid.
Covered bonds
Debt securities backed by a portfolio of mortgages that are segregated from the issuer’s other
assets to be solely for the benefit of the holders of the covered bonds. The Group has
established covered bonds as part of its funding activities. Covered bonds use retail /
residential mortgages as the asset pool.
Credit Valuation
Adjustment (CVA)
The adjustment applied to the fair value of derivatives for potential mark-to-
market losses due
to credit quality deterioration of a counterparty (that does not necessarily default).
CRD V
Capital Requirements Directive V (CRD V) became effective on 28 December 2020 and is
made up of the Capital Requirements Directive (CRD) and the Capital Requirements
Regulation (UK CRR).
Debt securities
Assets representing certificates of indebtedness of credit institutions, public bodies or other
undertakings
Debt securities in issue
Transferable certificates of indebtedness of the Group to the bearer of the certificates. These
are liabilities of the Group and can include certificates of deposit.
Derivative financial
instruments
A derivative financial instrument is a type of financial instrument (or an agreement between
two parties) that has a value based on the underlying asset, index or reference rate it is linked
to. The Group uses derivative financial instruments to hedge its exposures to market risks
such as interest rate risk and currency risk.
Effective interest rate
(EIR) method
The method used to measure the carrying value of a financial asset or liability measured at
amortised cost and to allocate associated interest income or expense over the relevant
period.
EPC
Stands for Energy Performance Certificate. It is related to an energy rating scheme which
identifies a household’s energy efficiency level. EPC scores range from least efficient (G) to
most efficient (A) on a scale.
Expected Credit Loss
(ECL)
The present value of all cash shortfalls over the expected life of the financial instrument to
determine impairment loss allowances under IFRS 9.
Exposure at default
(EAD)
The expected outstanding balance of an asset at the time of default.
Fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm's-length transaction.
Fair value through
other
comprehensive income
(FVOCI)
Financial instruments held at fair value in the Statement of Financial Position, with changes in
fair value recognised through other comprehensive income.
Fair value through
profit or loss
(FVTPL)
Financial instruments held at fair value in the Statement of Financial Position, with changes in
fair value recognised through the Income Statement.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 301
Financial Services
Compensation
Scheme (FSCS)
The UK's compensation fund of last resort for customers of authorised financial services
firms. The FSCS may pay compensation to customers if a firm is unable, or likely to be unable,
to pay claims against it, usually because it has stopped trading or has been declared in
default. The FSCS is funded by the financial services industry.
Forbearance strategies
Strategies to assist borrowers in financial difficulty, such as arrears capitalisation, a reduction
in the monthly payment, a conversion to interest only or a mortgage term extension.
Forbearance strategies aim, if possible, to avoid foreclosure or repossession.
Free capital
The aggregate of gross capital less property, plant and equipment, right-of-use assets,
investment property and intangible assets.
Funding limit
Measures the proportion of shares and borrowings (excluding the fair value adjustment for
hedged risk) not in the form of shares held by individuals. The calculation of the funding limit
is explained in the Annual Business Statement.
Goodwill
Goodwill arises on the acquisition of subsidiary undertakings, joint ventures, associates or
other businesses and represents the excess of the fair value of consideration over the fair
value of separately identifiable net assets acquired at the date of acquisition.
Greenhouse Gases
(GHG)
Gases which absorb and re-emit infrared radiation, thereby trapping it in the Earth’s
atmosphere. It includes carbon dioxide (CO₂), methane (CH
4
), nitrous oxide (N₂O),
hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF
6
) and nitrogen
trifluoride (NF
3
). These emissions add to the greenhouse effect – a contributor to climate
change.
Gross capital
The aggregate of the general reserve, translation reserve, fair value reserve, cash flow hedging
reserve, cost of hedging reserve, subordinated liabilities, subscribed capital and non-
controlling interests.
Internal Capital
Adequacy Assessment
Process (ICAAP)
The Group’s own assessment, as part of regulatory requirements, of the levels of capital that it
needs to hold in respect of the risks it faces under a business as usual scenario and a variety
of stress scenarios.
Internal Liquidity
Adequacy Assessment
Process (ILAAP)
The Group’s own assessment that current and projected levels of liquidity are sufficient and
appropriate for the Group’s plans, under a variety of stress scenarios. It also details the
Group’s compliance with the PRA’s regulatory requirements.
Internal Ratings Based
approach (IRB)
An advanced approach to measuring capital requirements in respect of credit risk. The IRB
approach may only be used with permission from the PRA.
International Swaps
and Derivatives
Association (ISDA)
Master Agreement
A standardised contract developed by ISDA and used to enter into bilateral derivatives
transactions.
Investment grade
The range of credit ratings, from Aaa to Baa3, as measured by external credit rating agencies.
Lending limit
Measures the proportion of business assets not in the form of loans fully secured on
residential property. The calculation of the lending limit is explained in the Annual Business
Statement.
Leverage ratio
The ratio of Tier 1 capital divided by total leverage exposure measure of on and off-balance
sheet assets, after netting derivatives.
Liquid assets
The total of cash in hand and balances with the Bank of England, loans and advances to credit
institutions and debt securities.
Liquidity Coverage
Ratio (LCR)
A measure designed to ensure that financial institutions have sufficient high-quality assets
available to meet their liquidity needs for a 30 day liquidity stress scenario.
Liquidity ratio
Liquid assets as a percentage of shares, deposits and borrowings.
Loan
-to-value ratio
(LTV)
A ratio which expresses the balance of a mortgage as a percentage of the value of the
property. The Group calculates residential mortgage LTVs on an indexed basis (the value of
the property is updated on a quarterly basis to reflect changes in a house price index).
Loans past due / past
due loans
Loans on which payments are overdue including those on which partial payments are being
made.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 302
Loss given default
(LGD)
An estimate of the loss that would be incurred should a borrower default on their credit
obligations.
Management expenses
Management expenses represent administrative expenses. The cost to mean asset ratio is
management expenses expressed as a percentage of mean total assets.
Material Risk Takers
(MRTs)
A group of employees to which the FCA’s Remuneration Code applies. MRTs consist of
Executive Directors, Non-Executive Directors and certain senior managers who could have a
material impact on the firm’s risk profile.
Mean total assets
Represents the amount produced by halving the aggregate of total assets at the beginning
and end of the financial year.
Medium term notes
(MTN)
Corporate notes continuously offered by an entity to investors through a dealer, across a
range of maturity periods.
Member
A person who has a share investment or a mortgage loan with the Society, or is the holder of a
Permanent Interest-Bearing Share in the Society.
Minimum requirement
for own funds and
eligible liabilities
(MREL)
A regulatory requirement for the minimum amount of equity and subordinated debt a firm
must maintain to support an effective resolution.
Mortgage backed
securities (MBS)
Assets which are backed by underlying mortgage collateral.
Net interest income
The difference between interest received on assets and interest paid on liabilities.
Net interest margin
Net interest income as a percentage of mean total assets.
Permanent Interest
Bearing Shares (PIBS)
or subscribed capital
Unsecured, deferred shares that are a form of Tier 2 capital. PIBS rank behind the
claims of all subordinated debt holders, depositors, payables and investing members of
Skipton Building Society.
Prime
Prime mortgages are those granted to the most credit worthy category of borrower.
Probability of Default
(PD)
An estimate of the probability that a borrower will default on their credit obligations.
Put option
Where the Group acquires a majority shareholding in a subsidiary undertaking, but grants the
non-
controlling shareholders an option to sell their shares to the Group at some future date(s),
a put option obligation exists.
Renegotiated loans
Loans are classed as renegotiated, with the customer’s consent, when their terms have
changed during the year. Loans and advances may be renegotiated whether or not the
customer is experiencing financial difficulty in repaying their loan with the Group.
Repo / reverse repo
Short to medium-term funding agreements which allow a borrower to sell a financial asset,
such as an ABS or government bond, as security for cash. As part of the agreement the
borrower agrees to repurchase the security at some later date. For the party selling the
security (and agreeing to repurchase it in the future) it is a repo; for the party on the other end
of the transaction (buying the security and agreeing to sell in the future) it is a reverse
repurchase agreement or reverse repo, for which the underlying collateral can typically be
resold or repledged if desired.
Residential loans
Mortgage lending secured against residential property.
Residential mortgage
backed securities
(RMBS)
A category of ABS that represent interests in a group of residential mortgages. Investors in
these securities have the right to cash received from future mortgage payments (interest and
/ or principal).
Risk appetite
The articulation of the level of risk that the Group is willing to take in order to safeguard the
interests of the Society's members whilst achieving business objectives.
Risk weighted assets
(RWA)
The value of assets, after adjustment, under CRD V rules to reflect the degree of risk they
represent.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Group Annual Report & Accounts 2024 303
Securitisation
A process by which a group of assets, usually loans, are aggregated into a pool which is used
to back the issuance of new securities. A firm transfers these assets to a special purpose
vehicle which then issues securities backed by the assets. The Group has established
securitisation structures as part of its funding activities. These securitisation structures use
retail / residential mortgages as the asset pool.
Shares
Money deposited by non-corporate depositors in a retail savings account with the Society.
Such funds are recorded as liabilities for the Society.
Shares, deposits and
borrowings
The total of shares, amounts owed to credit institutions, amounts owed to other customers
and debt securities in issue, including accrued interest and fair value adjustments for hedged
risk.
Significant increase in
credit risk (SICR)
A significant increase in credit risk on a financial asset is judged to have occurred when an
assessment using quantitative and qualitative factors identifies that the credit risk has
increased significantly since the asset was originally recognised.
SPPI test
An assessment of whether the contractual terms of the financial asset give rise to cash flows
that are in substance solely payments of principal and interest.
Scope 1 emissions
Under the Greenhouse Gas Protocol methodology, scope 1 emissions include emissions
generated from sources under the direct control of an organisation. For example, emissions
from combustion of fuel or oil for heating offices.
Scope 2 emissions
Under the Greenhouse Gas Protocol methodology, scope 2 emissions include those generated
from the purchase of electricity.
Scope 3 emissions
Under the Greenhouse Gas Protocol methodology, scope 3 includes all indirect emissions.
These result from the activities of the organisation, but not in their direct control. This
includes areas like leased assets, suppliers and colleague commuting.
Stage 1 financial assets
Stage 1 financial assets are those which have not experienced a significant increase in credit
risk since origination. 12-month ECLs are recognised and interest revenue is determined by
the EIR on the gross carrying amount.
Stage 2 financial
assets
Stage 2 financial assets have experienced a significant increase in credit risk since initial
recognition. Lifetime ECLs are recognised and interest revenue is determined by the EIR on
the gross carrying amount.
Stage 3 financial
assets
Stage 3 financial assets are identified as in default and considered credit impaired.
Lifetime ECLs are recognised and interest revenue is determined by the EIR on the net carrying
amount.
Subordinated debt /
liabilities
A form of Tier 2 capital that is unsecured and ranks behind the claims of all depositors,
creditors and investing members (other than holders of PIBS).
Sub
-prime
Loans to borrowers that typically have weakened credit histories that include payment
delinquencies and in some cases potentially more severe problems such as court judgments
and discharged bankruptcies.
tCO₂e
This stands for metric tonnes of carbon dioxide equivalent. It is a standard unit for measuring
greenhouse gas emissions, accounting for the different greenhouse gases using a single
factor.
Term Funding Scheme
with additional
incentives for SMEs
(TFSME)
A scheme allowing eligible banks and building societies to access four-year funding at rates
very close to Bank Base Rate, designed to incentivise eligible participants to provide credit to
businesses and households to bridge through the period of economic disruption caused by
COVID-19 – TFSME, which closed for drawdowns in 2021, included additional incentives to
provide credit to SMEs.
Tier 1 capital
A measure of financial strength, as defined by CRD V. Common Equity Tier 1 capital
comprises general reserves from retained profits less regulatory adjustments.
Tier 2 capital
Tier 2 capital comprises the Society’s PIBS.
UK CRR
UK Capital Requirements Regulation (UK CRR) implemented in 2022.
Wholesale funding
Amounts owed to credit institutions, amounts owed to other customers and debt securities in
issue excluding balances deposited by offshore customers.
Performance & Strategy Governance Financial Statements
Other Information
Skipton Building Society is a member of the Building Societies Association. Authorised by the Prudential Regulation Authority
and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, under registration number 153706,
for accepting deposits, advising on and arranging mortgages and providing restricted financial advice.
Principal Office, The Bailey, Skipton, North Yorkshire, BD23 1DN.
Go to skiptongroup.com
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