The organisation, which has 80 staff and is based in the Scottish capital, says it is now the oldest remaining building society in the world, having started life in 1848 as the Edinburgh Property Investment Company, with subsequent milestones including its merger with fellow Scottish player Century Building Society.
The member-based mutual offers savings accounts and mortgages primarily to members resident in Scotland, and in March last year unveiled its results for the 12 months ending January 31, including a record jump of £74 million in mortgage lending, while pre-tax profit was up by just over a third to £840,000.
Mr Denton said at the time that SBS has since inception supported members “through wars, recessions, and now a generation-defining pandemic” – also stating that “trust and purpose were key to [our] strong performance”.
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His first job was a bank clerk in Royal Bank of Scotland’s Forfar office in 1988, progressing more senior roles at the lender, then taking the post of director for branch, mortgages and business banking at Co-operative Bank. Before his arrival at SBS he was managing director, operations, at Co-op Funeralcare.
“I’ve got 15 years in management and board positions, and every position and organisation has come with ups and downs and critical transformation periods. However, what has always shone through is the necessity to focus on what we are dealing with – people’s hard-earned money and helping them to achieve what they want from their lives.”
It’s coming up for the third anniversary of you being appointed to your current role, and in October at the Scottish Mortgage Awards you were named Business Leader of the Year, with SBS announced as Building Society of the Year. How would you characterise your time as CEO so far…?
When I took up the role, I don’t think anyone could have anticipated what was to come. Within nine months, we were living in a global pandemic and that triggered completely new ways of working, professionally and personally. I’m proud that as a business we have continued to challenge the pandemic’s force and serve our members to the best of our ability.
By nature, I’m an analyst and I’ve spent a lot of time analysing government policies, economic forecasting, and industry announcements, assessing what it means for people and their money. SBS’s model is simplistic in that we offer only two products: savings and mortgages.
Because of that time-tested approach, we have managed to maintain a healthy business that achieved growth, and that was down to the hard work of my team, and, I would like to hope, my leadership.
Can you give more details of how SBS handled the last two years, for example not furloughing any staff, and how it will help people through the current cost-of-living crisis?
We placed customer service and agility at the centre of our efforts, but our business model was advantageous too. In early 2020, the governments wanted to keep the housing markets open, so they offered relief on stamp duty, which meant a boom in demand for homes.
Unlike larger banks, we weren’t caught up in managing payments and business lending, we were solely focused on delivering the best mortgage options for our customers.
We also had the funds to do it. With more people reducing their cost of living as the world shut down – reducing commuting, eating-out and entertainment costs – we saw this money transferred into our savings accounts, giving us the financial power to keep up with the demand for new mortgages.
We are not the biggest building society in the UK, but after growing our mortgage book by 22 per cent in 2020 alone, we had the biggest growth.
It was important to me that we retained the team to continue to serve our customers, but also to retain the morale during what has been a very testing time for everyone.
As we now appear to be edging closer to the end of the health pandemic, Scotland is facing a new wave of instability as the cost of living goes up. This is where we turn our attention to our savings, providing products that meet needs and are flexible, so if people need to move money around or input again later, we can allow for that.
The organisation last year opened a branch in Aberdeen, and one in Glasgow in 2019, for example, bucking the trend for lenders to close branches amid an increasing digital presence. What is the motivation behind this?
Banking has been redefined through my career, but something that became clear very quickly when I started was that transactional banking just doesn’t work for SBS members. Aberdeen is setting a new standard as we throw our weight behind our physical presence in Scotland. The £500,000 investment has allowed us to create a space for our teams to encourage more informal approaches with our customers.
We’ve renamed our branches Relationship Centres. They are places where you can come and sit down with a cup of coffee before we even talk business. You won’t be handed a leaflet and left to work it out yourself.
How can you compete with online-only lenders like Monzo and Starling, which the FCA said recently now hold 8 per cent of all personal current accounts?
Quite simply, we don’t want to compete with online-only lenders. We are proud of our traditional and trusted approach and the relationships and success stories we’ve forged because of that. There is absolutely a space for digital banking, and it has been exciting to watch its transformation in recent years, especially the start-ups.
However, we don’t ever want to feel "faceless”. This might appeal to younger markets eager for quick, transactional processes as they go about their busy lives, but we know our members like to engage with real people.
SBS has been highly active in sustainability, for example supporting Trees For Life's conservation work on the Caledonian Forest. Can you explain more about your environmental, social and governance strategy?
In the aftermath of COP26, we are acutely aware of our role as a business in Scotland to help meet the net-zero targets. We also recognise our responsibility to explore that commitment with our 30,000-strong member community too.
Our flexible approach to lending means every single mortgage is reviewed and underwritten by an individual. Therefore, if we can see that a customer wants to loan more to undertake home improvements that will reduce their offsets and costs, we fully support this. We can also help with equity release for retrofit activities, whether it be solar panels, heat pumps, or the like.
We also offer self-build mortgage lending, which is particularly popular in Scotland’s northern regions and islands. Many houses are built on an individual basis and, as such, what we find is that many consumers take their carbon footprint incredibly seriously.
We do not have the knowledge or power to do it all, so we have engaged with partners to support and educate us too. In 2019, we achieved carbon-neutral status through our work with Trees for Life, a charity that rewilds the Scottish Highlands.
The next step is to achieve carbon negative. We also have a partnership with environment risk specialist Ambiental, which assesses every property we lend on. Its work allows us to examine the threats of rising sea temperatures and floods for the next 30 to 50 years, and has given us invaluable insights.
It will be the 180th anniversary of SBS in 2028 – what would you like it to look like then?
Naturally, we will develop with the times, but I anticipate that much of the business model that was established in 1848 will remain in 2028. By that, I mean, we will continue to put our members first.
The biggest evolution will be the advancement of technology and what that can do for us as an organisation, however, I am confident that tech in the coming years will only enhance our offering rather than replace it. For example, we have significantly invested in building our infrastructure to provide even more peace of mind – by mid-2022, we will be fully cloud-based.
Additionally, following the relaunch of our Aberdeen branch we will roll out the same, improved model in key cities around the country.
I’ve worked in financial services my entire professional career, so I understand the undoubtedly changing landscape of banking. That means, despite our somewhat traditional and, some may say, historical values, we are consistently led by the needs of our customers, and are ready to embrace what they require while always having one eye on the future.