Darlington Building Society has posted strong results after rising to the unprecedented challenges of the pandemic. Chief executive, Andrew Craddock, talks to Peter Barron.

During a career spanning 36 years in banking, Andrew Craddock has come through challenging times before – not least the global financial crash of 2008. But Darlington Building Society’s chief executive does not hesitate in describing the past year as the toughest of all.

“With the financial crisis 13 years ago, we knew the impact it was having. It was a mess, but we could see how to get out of it. This time, it’s the huge uncertainty that has made it so hard for people in different ways”.

Then, just a minute into the interview, Andrew interjects with questions of his own: “How’s it affected you? Are all your family OK?” It is typical of the man, underlining why his own staff recently voted for him, without his knowledge, as “Inspirational Leader of the Year” in the Society’s annual awards, in recognition of the care he showed staff, members and the local community throughout the pandemic.

From the beginning of the first lockdown, staff were given a raft of reassurances: The Society would not be using the Government’s job retention furlough scheme; there would be no redundancies for the year ahead; and everyone would be kept on full pay, irrespective of whether they were able to work full-time.

Businessiq: Staff made proactive calls to make sure isolated members were okStaff made proactive calls to make sure isolated members were ok

The staff responded by going the extra mile for members: making calls to check on those who were isolated; keeping branches open, albeit on reduced hours; and maintaining services. Indeed, there was only one day when a branch had to close due to a positive test at Northallerton. And, in the darkest days of the pandemic, the Society reinforced its support of local communities, by extending its annual pledge to donate five per cent of profits to good causes until 2025.

On all fronts – staff, members and community – it has been an exemplary performance, now capped by robust financial results that Andrew describes as “a testament to the way the staff pulled together in unprecedented circumstances”.

Total assets rose from £666m to £705m, propelling Darlington Building Society into the UK’s top 20 biggest building societies. Pre-tax profits fell from £1.77mm in 2019 to £0.73m but remained remarkably healthy despite four main factors: the housing market effectively closing during the first lockdown, two Base Rate reductions by the Bank of England; increased costs due to investment in staff and technology; and additional funds being set aside to cover increased bad debt provisions resulting from the pandemic.

“It’s been the hardest year I have ever known, and I couldn’t be prouder of the staff – it’s been humbling,” says Andrew. “As we were going into the first lockdown, there was a lot of anxiety, and the board’s priority was to alleviate those fears”.

The first decision was to remain open for business without using the Government’s furlough scheme. “We are a resilient organisation, with strong reserves, and it wouldn’t have been right to take advantage of taxpayers’ money,” says Andrew. That positive message was relayed to staff, along with the assurances about job security and pay, while preparations were quickly made to equip 95 per cent of the staff to work from home, screens were installed in branches, and personal protection equipment supplied.

“Acts of kindness” were also introduced, such as employees being sent thank you gifts. Staff were also regularly brought together for online social events, and initiatives to support mental health were put in place. The caring approach was recognised when the Society was awarded an “outstanding” two-star rating by Best Companies, based on a survey of employees.

Businessiq: The apprentices who started with Darlington Building Society during the pandemicThe apprentices who started with Darlington Building Society during the pandemic

Remarkably, despite the prolonged economic uncertainty, the Society also continued to invest in the future: recruiting additional staff, including eight apprentices and supplying teams with improved technology. “Instead of pulling up the drawbridge, the board backed further investment, to make the business fit for the future,” says Andrew.

He recalls being moved by an unsolicited email from a young member of staff, who had joined the Society after being made redundant from a previous job. It concluded: “I would like to say a big thank you for putting our health and livelihoods first... and thank you for helping me to get back on my feet”.

While delivering PPE to one of the branches, another member of staff took Andrew to one side to say how they had cried with relief when he had made the call to staff to reassure them about their job security and being kept on full pay. “It brought it home what it meant to people, and I don’t mind admitting that I walked out of the branch with a tear in my eye,” he recalls. The Society’s support for the community also remained relentless, with staff volunteering in a range of ways, including acting as marshals at Covid-19 vaccination centres and Age UK befrienders.

Sixteen community organisations shared £77,438 from the five per cent pledge, with Andrew shocked that the majority of bids for assistance involving food poverty. The Society made a major contribution on that front by becoming a key financial partner in enabling pioneering charity The Bread and Butter Thing to come to Darlington.

Businessiq: The Society played a major role in bringing The Bread and Butter Thing charity to DarlingtonThe Society played a major role in bringing The Bread and Butter Thing charity to Darlington

The charity redistributes surplus food, and other basic staples – mainly from supermarkets – selling it at a fraction of the normal cost. By July, 42 tonnes of food had been distributed in the town, equating to 100,000 meals, and 14,000 Easter eggs were also given out to local children.

“The Bread and Butter Thing’s arrival in Darlington had been planned before anyone knew about the pandemic, but the timing could not have been better because it turned out to be a lifeline for so many families,” explains Andrew.

“Community support is integral to Darlington Building Society, and The Bread and Butter Thing really brought home the value of having that social conscience running right through the organisation. It made us more committed than ever to sharing five per cent of the profits to worthy causes”.

On Teesside, grants included nearly £15,000 to the Daisy Chain Project, to pay for a large polytunnel to enable autistic people to grow their own produce.

At the start of the lockdown, the charity had been forced to close, and Andrew was on a Zoom call to its chief executive Neeraj Sharma. “Calls were coming in from all round the country, and it struck me that we had organisations here in the North-East that were seen as a national helpline,” he recalls. “I asked what we could do to help and the polytunnel was the answer. Another example of the difference being made on Teesside was a £4,550 donation that enabled Teesside Hospice to buy a new bladder scanner.

“For us, it will never just be about making a profit,” says Andrew. “It’s about being part of the fabric of our communities.” Inevitably, there are concerns about the economy, the dependency on the success of the vaccination programme and the need for continued Government support, but he remains confident the Society will carry on the good work in 2021.

The benefits of investing in technology will be seen by members in the next few months, including a more efficient telephone system, an updated brokers’ platform and a new payment system to make it easier for customers.

Businessiq: The refurbished Northallerton branch The refurbished Northallerton branch

Northallerton was the latest branch to be refurbished last year, and Redcar branch will relocate to a more prominent, central location in the Spring, followed by Bishop Auckland branch moving to a higher profile site in the autumn.

Both will have disabled access. With the latest refurbishments due to take place at Darlington, Stockton and Middlesbrough, all nine branches will have been given a fresh new look by the end of the year, before the search begins for new branch locations in 2022.

“Thanks to a tremendous team effort, we’re in a really strong position with ambitious plans to provide an even better service for members, look after our staff and support our communities – and that makes me incredibly proud,” says Andrew.

There is no hiding from the fact that 2021 will bring further challenges but, 165 years after it was founded, Darlington Building Society remains passionate about making a difference. You can bank on that...