Question

I am in the process of switching my LISA to Tembo who offer better interest rates. Even Moneybox offer a better rate for 12 months. Why is Beehive Money's LISA interest rate at 3.50% still when you have others doing over 4.00%? 

Our response

This is an area we grapple with a lot as in order to make the organisation work, if we are paying the highest savings rates, we have to charge our mortgage members high rates to offset this so finding the balance is key.

We operate in a very competitive market and although we do seek to offer the highest rate we can. It’s not always possible to do this for every product we have for all of the time.

We try to balance the needs of all members of the Society, which means that whilst we always pay good rates, it isn’t the right thing for us to be at the top of the market. 

Question

Will Beehive Money seek to implement open banking to allow members to move funds from other financial providers directly to Beehive Money without needing to enter payment details please? Additionally, will Beehive Money implement debit card deposits into accounts to allow members to deposit with ease please? Both Yorkshire and Skipton Building Societies allow this.

Our response

Our strategy is seeking to bring all of our ways of doing business, into the future as well as retaining what people love about us today.

The type of capability you are asking about are great examples of this, but we are on a journey, and we will seek to continually improve. So I am not able to answer when further enhancements like these will be ready, but I can confirm we are looking at options. 

Question

You are currently offering a 2 Year Fixed Rate Bond Issue 9 at 5.07%. The interest on this bond accumulates until maturity after 2 years, which causes income tax issues, i.e. the interest is taxable on maturity and not annually. Why do you not allow the interest to be paid away each year? This would be more tax efficient for members. 

Our response

Thank you for your feedback. We are always looking to provide more options for our savers in terms of when interest is paid. This is something we are looking into and hope to be able to offer members very soon.

Question

In the 2023 members newsletter page 9 there are many abbreviations that lay-folk like me do not know what they represent. What is CETI? What is LCR? What is ECL? Why is not the wording written in full so that all members can understand? 

Our response

It is great to have that feedback from our members. I can confirm that in our annual report and accounts which is available on our website we include a full glossary of financial terms on page 114, and we will make sure this is included in our next members newsletter too.

CET1 - Common Equity Tier 1 ratio is a measure of solvency and it signifies our strength as a financial services business. Ours stands at 15.2% which is strong relative to our competitors. 

LCR is our Liquidity Coverage Ratio which is 184%. We maintain a prudent level of liquid resources, of an appropriate level and quality, to meet our financial obligations and to provide protection and flexibility for our savings deposits in this uncertain economic environment.

ECL is Expected Credit Loss which is a term used for accounting for impairment provisions.

Thank you for highlighting this and we will look to provide greater clarity and more relatable ways to describe things to members as we move forward.

Question

What is the profile of mortgage repayment arrears in terms of months outstanding at the year-end compared with the current situation?

Our response

The balances that have been in arrears by a month or more is very low relative to our overall balances. 

So that you don’t think I am avoiding the question, I will provide the numbers which reflects the change as compared with previous periods. It was £16m for 2022 and £17m for 2023. As context these figures represent less than half of one percent of the total mortgage balances for the respective years. (0.50% and 0.48%).

Question

What is the amount of the provision at the year-end for delinquent mortgages compared with the last financial year? 

Our response

The provision held for 2022 is £0.27m and for 2023 is £0.30m for all mortgage accounts that are in arrears.

Question

What is the annual record of any foreclosures and loan losses not recovered?

Our response

In 2023 we only had 1 foreclosure (taken over) on a property that meant we received £172,000 of which around £40,000 was paid back to the member, i.e. we did not incur any loss on this transaction. 

Question

How have credit criteria policies been changed?

Our response

Over the course of 2023, we have made a number of changes to lending policies both maintaining our position relative to the competition but also seeking out gaps in the market. This included expanding our maximum loan allowances for flats and new build properties but also helping members with historic and minimal adverse credit history, locked out by high street lenders. 

In light of the higher Bank of England interest rate and future rate expectations, we revised some of the ways we assess how members can afford their mortgage loans, ensuring members can continue to buy the home they want whilst being prepared in case they increase further.

Question

Members have asked questions about why we referred members to an unregulated firm and why this was not disclosed to members. 

Our response

Referrals were made to help people meet a series of personal and financial needs including wills, estate planning, powers of attorney.

We know that many other building societies were also offering this service at this time.

There was no requirement for The Will Writing Company to be regulated but even so, it was regulated by the Solicitors Regulatory Authority from 2016.

Questions

Members have asked about the level of due diligence we carried out beforehand on The Will Writing Company (TWWC) and why we were not aware that they were in financial difficulty. 

Our response

We undertook full and regular annual due diligence procedures in relation to TWWC before we started working with them and over the period of time referrals were taking place.

These reviews did not raise any issues of concern. The financial credit score was still scoring well.

When TWWC went into administration, we contacted circa 400 directly impacted members whose arrangements were not yet concluded, and advised them to seek independent legal advice, and provided guidance on how to reclaim fees they may have paid for services they did not receive.

We also advised those members affected to immediately contact their local Nottingham Building Society branch for support. TWWC’s administration took everyone by surprise.

Please remember that member losses did not come from TWWC nor from the initial the investments nor from the fact that TWWC went into administration. The member losses came later, when Philips Trust Corporation became involved.

Question

Members have asked about commission payments and why they were not disclosed. Were staff financially incentivised to recommend The Will Writing Company?

Our response

We have looked back over all of the years in terms of incentives etc. to ensure we understand the position. From those cases we have seen the commission was disclosed, but there are members who do not feel that this was clear.

Let me make it clear that for us commission was not a key driver and staff were not directly incentivised. To set the context, only a small amount of commission was received by Society from The Will Writing Company - on average around £70,000 each year over the seven years we worked with The Will Writing Company.

The driver was real member needs. It is difficult to see how we could have anticipated, an additional company being established and causing the damage that it has.

Question

Members have asked what our plans are to help those who have been impacted. As we have said, I’ve been leading the teams focused on this issue over the last few months.

Our response

We have been in contact with the administrators, Kroll, to better understand the number of our members affected and to what extent, in order to ascertain how we may be able to help on a voluntary basis.

As a mutual building society, we have a responsibility to balance the interests of impacted members with the best interests of our overall membership.

We are planning to provide meaningful support to impacted members and we will be in a position to outline the details in the near future. We will contact members directly as well as making an announcement.