Page 4 - Pillar 3 Disclosure
P. 4


Overview from Paul Winter, CEO

2013; meteoric economic 

rise or flicker of recovery?

Overview of financial services in 2013

In 2013 we saw the launch of Help to Buy and 

the withdrawal of the Funding for Lending (FLS) 

scheme for residential mortgages. The former

is designed to stimulate increased demand for 
residential property, encouraging banks to lend 

to those with lower deposits. We were already 

lending to those with 5% deposits and therefore 

did not join the scheme. It is concerning that in a 

year where the housing market began to revive, 

2013 started with the lights going out at
the Government decided to quicken the pace of 
Help to Buy’s introduction with the risk of over- 
the Super Bowl and a meteor crashing into 
heating the housing market. FLS was removed in 
Chelyabinsk, Russia and ended with mixed 
October; the scheme provided a cheap source
fortunes such as England qualifying for the 
of funding to prompt lending to businesses and 
World Cup but losing the Ashes. The UK 
individuals. Banks have drawn down £16 billion 
economy during this time has some parallels. 
but reduced their net lending by over £12 billion; 
In the last quarter of 2012 economic growth 
building societies have drawn down £6.9 billion 
had declined and the hopes for 2013 were achieving net lending of £15.7 billion. As a result 

low. Growth was slow during the year but building societies held a 24% share of all gross 

consistent with three successive quarters of mortgage lending in 2013.

positive growth. The economy is now making 
Savings balances in the mutual sector for the first 
steady progress but this is clearly fuelled
11 months of 2013 increased by £6.7 billion 
by consumer spending rather than business 
compared with £1.7 billion for the same period in 
productivity (consumer spending increased by 2012. Savings interest rates throughout the year 

0.8% in October) and whilst unemployment remained deflated with best buy savings rates 

is reducing, the levels of youth unemployment reducing by half from August 2012.

remain disappointing.


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