Established1849

growing closer

Includes summary financial statement for yearended 30 November 2018

Chairman’s summary 4170 Years of “The Old Freehold” 5All In 6Community matters 8Savings & Mortgages 10Introducing our Board 12Summary Financial Statement 14Directors’ Remuneration Report 18

Looking back at 2018

With a backdrop of continuing economic uncertainty, we began our financial year positively with a commitment to our face-to-face services, opening two new premises in the existing branch towns of Ipswich and Woodbridge.

The economic outlook We witnessed another increase in the Bank of England’s Base Rate - the second successive annual upturn. There is, inevitably, much speculation about how the Base Rate may be affected by Brexit and this is something we will be closely monitoring.

The Autumn Budget was positive news for would-be first time buyers, with initiatives including the abolition of stamp duty for shared ownership properties up to £500,000 backdated to November 2017.

One of the most significant events of the year was the introduction of the General Data Protection Regulation, a complex project which we worked efficiently and diligently to comply with.

Membership and branches As a mutual we place great importance on the satisfaction and support of our members and work to meet their needs.

The demand for our face-to-face services saw us open new premises at a time when other financial service providers have closed branches. We are facing increasing demand for complementary online services and are making good progress with this project which will remain a focus in the coming year.

Supporting home ownership By employing an expert, manual approach to underwriting we understand the personal circumstances behind each mortgage application enabling us to be innovative with our mortgage lending.

We introduced new products specifically designed for borrowers aged 50 plus, offering no maximum age restriction at the end of the mortgage deal. Borrowing in later life brings with it a set of unique needs as well as changing sources of income and lifestyle which our underwriters take into consideration.

We identified and addressed a gap in our range for 75% Loan To Value products and responded to demand for a limited tranche of five year fixed deals.

We improved our offering for those either building, or remortgaging, a property using Modern Methods of Construction and can now also help shared ownership homeowners looking to remortgage.

A welcome from Richard Norrington, Chief Executive

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Key results

Richard NorringtonChief Executive

Mortgage assets £536m

(2017: £521m)

Retail savings balances

£572m (2017: £567m)

Profit before tax £3.3m

(2017: £3.1m)

Total regulatory capital £37m (2017: £34m)

Management expenses

£9.3m (2017: £8.9m)

Fit for the future Along with the Board I am mindful of the need to ensure we have the appropriate senior staff in place to lead the Society through the coming years. We have made two internal promotions, welcoming Rebecca Newman to our Executive team as General Manager Legal and HR (formerly Society Secretary and Legal Counsel) and Ian Brighton to our Board as Operations Director (formerly General Manager Operations). In addition, as highlighted in our 2017 Review, Trevor Slater joined the Society as Finance Director in January 2018.

It is also prudent to ensure our Board has the skills needed to ensure the long-running sustainability of the Society. I am delighted to welcome Fiona Ryder as Non-Executive Director, bringing over 25 years’ experience across the broadcasting, digital and commercial sectors.

We implemented a new tool to measure employee satisfaction and engagement, enabling us to monitor initiatives and invite suggestions on how to improve as an employer. We consecutively increased our quarterly engagement score and implemented several suggestions.

We pledged our support for the Women In Finance charter, to achieve a greater level of gender diversity.

As we now enter our 170th year it gives me great satisfaction to report that the Society is in a strong position, well placed to continue our success into 2019.

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Chairman’s summary The Society remains committed to providing long term sustainable value to members through competitively priced products.

Our business model remains very straightforward and we performed strongly by continuing to attract and retain personal savings, and then using these funds to lend responsibly to mortgage borrowers. Support from key mortgage intermediaries, particularly those on our Prestige Panel, were again at the heart of our success.

We made several strategic investments including the opening of new premises, the testing of new shared services, including Estate Agencies, and upgrading key components of our IT infrastructure.

We are committed to retaining a branch network but will ensure that it is one which is fit for purpose in a rapidly changing market place where the introduction of Open Banking, and the rise of the FinTech’s, will lead to further changes. We are therefore investing in both technology and people to ensure that we look after members’ interests and maintain high standards of service.

High quality member service is at the heart of our business model. Our staff have again worked to the highest standards, consistently demonstrated in our satisfaction results and supported by a low level of complaints.

Our Board structure, oversight controls and information are central to governance. A Board Effectiveness Review was conducted externally and highlighted the strength of our current governance but also gave ideas to further improve and modernise what we do.

Underpinning our Board oversight is our Enterprise Risk Management Framework (ERMF), core to our decision-making and incorporating the control structures and mechanisms to safeguard against threats, especially from fraud and cyber attack. This is, quite rightly, a crucial area of focus for our regulators.

The economic and political uncertainty associated with Brexit continues and the UK political landscape is changing. Whilst the Society’s business model means it is largely protected from any direct adverse implications of Brexit, it could be impacted by the wider economic changes. Although the Society’s simple operating model and high-quality loan book improves its resilience, these risks are nevertheless at the front of our thoughts and additional business controls and monitoring are being put in place.

In concluding this report I thank the Society’s employees for their valued personal contributions. Last year was difficult and demanding with many changes affecting the Society. With this level of commitment, I am confident that although 2019 will be just as demanding we are well placed to continue to build the business for the future.

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Alan Harris Chairman

170 years of “The Old Freehold”

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Ballot box from 1858

Between 1866 and 1933 the Society built houses, developing over 50 estates in Ipswich and across Suffolk including Felixstowe, Stowmarket, Lowestoft, Framlingham and Hadleigh.

During this time the Society operated from a single Ipswich town centre office. In 1979, to better serve our members, we opened our first satellite branch in Hadleigh. Further branches soon followed.

In 2016 the Society purchased the Grade II listed ‘Parr’s Bank’ building in Ipswich, which was to be the new flagship premises. After a much acclaimed refurbishment the building opened as ‘Mutual House’, reflecting the long-standing values of “the old Freehold”.

Our archive materials are on permanent loan to Suffolk Records Office, where they can be accessed for family and house history research. Visit www.suffolkarchives.co.uk to find out more

Ipswich branch counter, 1940s

We were established in 1849 as the Ipswich and Suffolk Freehold Land Society and the Ipswich & Suffolk Permanent Benefit Building Society. In 2019 we celebrate 170 years of service as Suffolk’s only homegrown financial services provider.

The Ipswich & Suffolk Freehold Land Society (FLS) was part of a national movement to create ‘forty shilling freeholders’, giving the ordinary man the chance to buy enough land to gain the right to vote.

The Society aimed to “improve the social position and promote the moral elevation of the unenfranchised population of this country”.  People would be able to invest their savings with that money used to purchase areas of freehold land. This land would be divided into plots of sufficient size to confer on its owner the right to vote.

At the first meeting on 4 December 1849 the Society enrolled 140 members with 150 shares taken. Within a week this had increased to 400 shares.

In 1850, the Society acquired its first piece of land (98 acres). By 1858 the first come, first served model of allocating plots to members was replaced by balloting. Members interested in a particular development would submit their ballot paper to the Secretary; should their numbered ball be drawn out they could proceed to purchase outright or through an Ipswich & Suffolk Permanent Benefit Building Society mortgage.

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Better for everyone

Being a member is more than being a customer; you’re part of something special. This is why we created All In.

Rather than aiming to please shareholders, as a mutual business we’re here to serve your interests and those of the community. All In strengthens the bond between members and the Society, ensuring our members feel like owners of the business. We want our members to get involved with us, to discover hidden treasures on special events and to benefit from offers with partner organisations.

Get involved Have your say by voting online, by post or in person at our AGM. We’re keen to hear your views on anything about the Society and All In is the perfect way to get to know you better.

Discover hidden treasures Our events programme is primarily an opportunity to reward members with social activities, but our events also bring valuable footfall, funding and awareness of Suffolk organisations and attractions. It’s so easy to overlook what is on our doorstep.

Enjoy partnership benefits All In occasionally includes discounts at a few local and nationally available businesses and organisations. These are refreshed throughout the year, so don’t miss out.

To keep up-to-date with events, discounts and other All In activities, visit your local branch or our website, or sign up to receive our monthly email, Freehold Post.

After our AGM Tracey will take to the stage to entertain you with her childhood memories of growing up in Ipswich, her continued love of Suffolk and her successful career as a journalist, broadcaster and writer. We expect the evening to finish around 8.30pm.

Please register your place(s) by contacting your local branch, emailing us at agm@ibs.co.uk or register via our website www.ibs.co.uk/members-lounge. Members may register to bring one guest; guest places may be subject to a ballot, depending on numbers.

Tracey MacLeod is a versatile and experienced broadcaster and writer. For many years she was the presenter of the BBC’s flagship arts show, The Late Show, where she specialised in music subjects and has also hosted her own shows on radio stations including BBC 6 Music, LBC, GLR and BBC Radio 2. As a restaurant critic for The Independent she has won numerous awards and she is a regular guest judge on the hit BBC series MasterChef.

An Audience with Tracey MacLeod, following our Annual General Meeting

Wednesday 27 March at Trinity Park, Felixstowe Road, Ipswich IP3 8UH

Refreshments from 5.45pm. AGM starts at 6.30pm

Your invite to our AGM and lead member event

In 2018 our unique calendar of member events saw 946 places being filled, with 443 members enjoying experiences such as:

Wilkins Tiptree jam factory Orfordness lighthouse

Sutton Hoo

AGM 2018Orwell Lady sunset champagne river cruise to celebrate Suffolk Day

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Find your Members’ Lounge online at www.ibs.co.uk/members-loungeIn addition hundreds of members attended our AGM, the biggest member event of the year.

“I realise that many like us felt very fortunate to have secured a place on this trip. Again thank you. Afterwards we discussed the ethos of the Building

Society and what we liked about it; good old traditional values where the customer counts and

feels welcomed and appreciated, not just a number or an invisible face that passes over their account book. It’s good to see in this day and age that a

company cares whilst still keeping up to date and still being able to compete with the nationals.”

D. G. & A. A.

Community mattersWe’re proud to be Suffolk through and through, and we strongly believe that organisations should support and nurture their local communities for the good of their customers, employees and their families.

Here’s a snapshot of how some of our staff have contributed in the past year.

The Ipswich Building Society Charitable Foundation

In 2005, the Society formed a Charitable Foundation to support local charities. Responsibility for grant making was subsequently transferred to Suffolk Community Foundation’s Suffolk Giving Fund in 2010. The Society makes an annual payment into the Fund; this year being £5,000, plus we are building up an Endowment Fund which is heading towards the £20,000 mark. With continued growth this will ensure stability of our grant-making into the future.

The Society has become a long standing and very loyal partner of Suffolk Community Foundation, supporting education projects like Shine A Light, sponsoring the High Sheriff’s Awards each year and playing a key role across all branches in their Surviving Winter appeal. Above and beyond the regular financial support, the Society also contributes by offering ‘help in kind’, directly reaching out to smaller, grassroots charities and community organisations.

Shelley Curtis, Customer Experience Manager“I helped Inspire Suffolk by delivering a Money Management session to a group of students as part of their Summer Education Programme at Framlingham College. The students really engaged with the session, quite a surprise considering the hot weather and how close we were to the summer holidays, plus the promise of their pool party later in the day!”

Richard Norrington, CEO“I’m a firm believer in the Society’s community schemes, so it is only right that I get stuck in too! Our Senior Management Team joined me in the ActivLives ‘ActivGarden’. We kept busy doing groundwork, tree planting and general maintenance and it was fantastic to support some of the vital work ActivLives do in our community.”

Tom Jell, Customer Experience Manager “Mutual House branch chose to support Ipswich Housing Action Group (IHAG) as our Mutual Advantage charity. I have been so moved by what IHAG do to help the homeless that I joined the Board of Trustees. In 2018 we donated £1,830 to IHAG and welcomed them into the branch to speak with our members about homelessness.”

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donated to charities through match funding employees’ own personal fundraisings

raised through our philanthropic savings accounts Mutual Advantage, which supports charities in each of our branch towns,

and We-Care (closed issue) supporting St Elizabeth Hospice, Suffolk Wildlife Trust and the East Anglian Air Ambulance.

employees

took advantage of our volunteer scheme, which enables them four hours per month to help a charity or community organisation

helping hand boxes created, one in each branch, to help members access our services more easily including items

such as magnification and visual aids, pen grips, large print documents and portable induction loops.

steps, or 12 miles, walked by Mutual House, Ipswich and Woodbridge branch teams between the two premises to raise

money for Families in Need (FIND)

volunteer hours donated

hours

in the classroom delivering financial education in schools,

colleges and prisons

events

hosted to mark Suffolk Day, held annually on the summer

solstice (21 June)

nd place

awarded to our Hadleigh Show stand, themed “quintessentially

British” with the judges appreciating our free fun and games provided for children

pledges

made as part of our sign up to the Women in Finance charter,

committing to help improve gender diversity

Runners-up at the Hadleigh Show Latymer Trust sponsorship 9

We firmly believe in the value of face-to-face service and a presence on the local high streets of Suffolk.

We know it can be hard to know who to trust with your money, which is why we offer simplicity and great service and were delighted to open two new and improved branches in Ipswich and Woodbridge town centres, to help improve the experience of our members and the services that we offer. Our larger, flexible premises mean we can host events and welcome even more people to join us.

There was good news for savers during the year, with the Bank of England increasing their Base Rate. During 2018 we maintained options including children’s accounts, ISAs, instant access and bonds through to charity support accounts and regular savers.

We’ve helped all types of people with all types of mortgages, available either through intermediaries or directly with one of our Mortgage Consultants – such as Melanie Mihill.

“I’m here to help people at any stage of their journey, whether it’s their first mortgage or their last. I’m able to give people a helping hand when buying a new home or remortgaging.

Over the last year I’ve spoken to first time buyers looking to get onto the property ladder with a shared ownership mortgage or a gifted deposit, buy to let borrowers seeking to finance a small property portfolio and later life borrowers who need to factor in changing sources of income and lifestyle.

I’ve also helped people who are constructing their dream home with a self build mortgage, an increasingly popular option for borrowers starting new projects, conversions, renovations or knock down and rebuilds.

The most enjoyable part of my day is helping people with one of their biggest financial decisions, either over the telephone or face-to-face in one of our branches.”

Savings that are up your street

Five minutes with a Mortgage Consultant

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Melanie Mihill, Mortgage Consultant

How we helped retiree Richard to get the mortgage he wanted

Richard Lincoln is in his mid-60s and decided to make a move across the Midlands, closer to

his partner but in a place of his own. “I’ve always owned a property, and I value my independence,” he says. “And since I get a pension from the National Grid, I can afford a mortgage.”

However, when he began looking for the right mortgage, Richard soon found that his age counted against him. “I tried a few lenders who claimed that they cater for the more mature customer, but I couldn’t get the offer I was looking for,” he recalls. “I had cash to put down and a fairly substantial, index-

linked pension coming in every month, so I thought I was a pretty good bet. It’s difficult for people of my age to get a mortgage. But people are living longer, so what are we supposed to do?”

Having exhausted his other options, he turned to the internet and soon came across Ipswich Building Society. “The Ipswich were excellent. They kept me informed at all times, and Melanie Mihill, who handled my application, was brilliant. I explained what I wanted, then she took me through various scenarios. They offered to lend me funds for 15 years and were the only people who would offer me a loan that was anything like what I needed.”

Now happily settled in his new apartment, Richard is certainly pleased that he found us. “I’d give them nine out of ten!” he says. “They did everything that they could and I’m thankful there was somebody out there who would help.”

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• Residential• First time buyers• Buy to let• Large loan• Self build

• Shared ownership• Gifted deposit• Later life• Expat• Self employed and contractors

We help people who are buying a property, remortgaging or building their dream home Our mortgage consultants are fully trained to give advice, either over the telephone or in one of our nine branches throughout Suffolk.

All applications are assessed by our expert underwriters based in Ipswich. Rather than relying on computer based scoring, by employing a manual approach we’re able to look at all applications individually and take personal circumstances into account.

Applicants must be aged 18 or over. Subject to status and valuation. Fees apply. We only offer a fully advised sales process on our own mortgages and there are no fees for our advice.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP THE REPAYMENTS ON YOUR MORTGAGE.

Introducing the Board of DirectorsOur Board’s focus is to ensure the long term sustainability for the benefit of our members. They formulate the strategy, review business performance, oversee the identification and management of risks, adhere to laws and regulations and ensure that the required controls are in place and are aligned to our strategy. The results achieved by the Society over recent years are a testament to the Board’s effectiveness.

The Non-Executive Directors are drawn from a wide range of backgrounds to ensure that the Board has the appropriate skills, knowledge and experience to provide a robust level of challenge and debate. The role requires

an understanding of the risks in business, commercial leadership within a framework of prudent and effective risk management controls and the ability to monitor performance and resources whilst providing support to the Executive in developing the Society.

The Society is committed to diversity and currently has a 30% (2017: 25%) female representation on the whole Board and is therefore aligned with the recommendations of the Davies Report which, for diversity purposes, has set a minimum target of 25% female representation. In 2018 the Society signed up to the Woman in Finance Charter to signify its commitment to diversity.

• Appointed to the Board in May 2018• Joined the Society in 1995 and appointed member of the Executive team since 2006• Trustee of the Ipswich Building Society Charitable Foundation and the Ipswich Building Society

Pension and Life Assurance Scheme.

Ian Brighton CeMAP, CeRGI, CeRCC, CeRCH, AdvCeMAP, Operations Director

• Appointed to the Board in November 2016• Former Regional Director at Clydesdale & Yorkshire Bank for the East

of England• Extensive leadership experience in the financial services sector.

Board Committees: Chairman’s and Nominations.

Richard Norrington MA (Hons), Chief Executive Officer

• Appointed to the Board in March 2015 and appointed Deputy Chairman December 2017

• Fellow of the Chartered Institute of Certified Accountants• Former Chief Risk & Compliance Officer at Visa Europe• Non-Executive Director roles held at Hastings Insurance Services Limited

and Aston Lark, Insurance Brokers; and Trustee at the Boards of the Chartered Management Institute (CMI) and of UFI (University for Industry).

Board Committees: Board Risk and Compliance, Audit (Chairman), Chairman’s and Nominations.

Valerie Dias FCCA, CCMI, Deputy Chairman

• Appointed to the Board in 2011 and appointed as Chairman December 2017

• Chartered Insurer and a Fellow of the Chartered Insurance Institute• Former Operations Director of NFU Mutual and ex Chief Executive

of Avon Insurance Plc• Non-Executive Chairman of two Aegon companies, and Governor

and Director of Prince Henry’s High School Academy Trust.

Board Committees: Board Risk and Compliance, Audit , Remuneration and Chairman’s and Nominations (Chairman).

Alan Harris MBA, FCII, Chairman

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As at November 2018

• Appointed to the Board in June 2015• Executive Director and Chief Risk Officer at Charter Court Financial

Services Group plc (CCFS)• Board member of all CCFS group companies.

Board Committees: Board Risk and Compliance, Audit and Remuneration (Chairman).

Peter Elcock ACIB, DipFS, MBA, Non-Executive Director

• Appointed to the Board in November 2017• Partner at Mazars LLP• Fellow of the Institute of Chartered Accountants in England and Wales.

Board Committees: Board Risk and Compliance, Audit and Remuneration.

Steve Liddell BSc, FCA, Non-Executive Director

• Appointed to the Board in November 2016.• Former Executive roles at the Woolwich Building Society, Barclays

Bank PLC, latterly as CEO of Allied Irish Bank (UK).• Non-Executive Director at Wyelands Bank.

Board Committees: Board Risk and Compliance (Chairman) and Remuneration.

Steve Reid MA, Non-Executive Director  

• Appointed to the Board in October 2018• Executive Director at TCD Media Ltd and President of the Norfolk

Chamber of Commerce and Industry• Fellow of the Royal Society of Arts and Honorary Treasurer of Royal

Television Society (East). 

Board Committees: Board Risk and Compliance.

Fiona Ryder FRSA, Non-Executive Director

• Appointed to the Board in June 2018 (contracted from January 2018)• Chartered banker and chartered management accountant• Former senior roles in finance and risk at Yorkshire Bank and Clydesdale Bank.

Trevor Slater ACMA, ACIB, Finance Director

• Appointed to the Board November 2006• Senior Independent Director focusing on achieving a fair deal and

positive outcomes for our members• Founding Director of redPepper Marketing Ltd and Director at

Tillwicks Close Management Ltd• Fellow of the Chartered Institute of Marketing.

Board Committees: Board Risk and Compliance, Chairman’s and Nominations.

Michelle Tennens FCIM, DipM, DipTh, Non-Executive Director (Senior Independent Director)

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At the 2019 Annual General Meeting Michelle Tennens will have held office for over nine years and will retire from the Board.

As at November 2018

This financial statement is a summary of the information in the audited Annual Accounts, the Directors’ Report and Annual Business Statement, all of which will be available to members and depositors free of charge on demand at every office of Ipswich Building Society from 20 February 2019.

The Summary Financial Statement was approved by the Board of Directors on the 8 February 2019.

Alan Harris ChairmanRichard Norrington Chief ExecutiveTrevor Slater Finance Director

Summary Directors’ ReportOffering simple and straightforward savings products to investing members and providing mortgages so that borrowing members can buy a home has been the Society’s main purpose for 169 years and continues to be so.

Business reviewThe Directors are pleased to end the year with a profit before tax of £3.3m [£3.1m: 2017]. In addition, the size of the Society’s mortgage assets have increased by £15m.

The uncertainty around Brexit and other economic factors has meant that the mortgage market has remained very competitive during the year and is likely to do so into 2019. This year the Society has refocused efforts on its strategic aim to offer carefully crafted products that are intended to meet the needs of customers who may otherwise find it difficult to obtain a mortgage from larger organisations. This means the

different types of lending that the Society has to offer has become more varied. Amongst the type of products that the Society offers are Self-Build, Shared Ownership, Expat and Later Life mortgages.

Looking aheadThe Directors are committed to ensuring the long-term sustainability of the Society and has in place a three-year corporate plan which is dedicated to maintaining the Society as an independent mutual society. Over the next two years an enhanced savings proposition will be developed which will include a digital offering for our members as well as the ability to offer improved services for face-to-face interactions with members.

Mortgage assetsThe Society has increased mortgage lending by £15m. Whilst this is lower than the prior year, this reflects the management decision to optimise the use of regulatory capital, with the lower level of growth and the high retention of profit enabling the potential early repayment of subordinated debt (subject to regulatory approval) towards the end of 2019.

ArrearsThere has been an increase in arrears cases over 12 months compared to the previous financial year and this is being monitored carefully. However, credit quality indicators remain within plan.

At 30 November 2018 there were 9 (2017: 5) mortgage accounts where the arrears were the equivalent of 12 months payments or more. The total amount of principal outstanding in these cases was £830k (2017: £572k).

Retail savings balanceThe Society is pleased to note that retail savings balances have increased by £5m in the last year (2017: £26m). Whilst this increase is less than the previous year’s increase this was a planned decision by the Board to carefully balance savings inflow, and manage the level of surplus funds on deposit with the Bank of England.

Year Ended 30 November 2018Summary Financial Statement

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Profit for the financial yearThe Society achieved a healthy profit before tax of £3.3m. This is an increase compared with last year’s £3.1m.

Management expenses

In 2018 there was an increase in management expenses, however these fell within the Society’s planned level. Costs have been very closely tracked throughout the year.

CapitalThe Society’s total regulatory capital is £37m, an increase of £3m on the prior year.

Community, economy and environmentThe Society continued its employee volunteering programme which allows all employees four hours per month to volunteer. In addition, our employees raised money for local charities through fundraising in branches or personal sponsorship. The Society offers matched funding for personal sponsorship of local charities and also supports charities through partnership affinity savings accounts.

In 2018 the Society commissioned an environmental review from an external company. The purpose of the review was to enable the Society to prepare an environmental strategy. Each site (Head Office and branches) had a carbon footprint calculation carried out, which considered buildings, employee behaviour etc. The results of the review will be used by the Society to put in place an Environment Action Plan and Environmental Policy.

Customer satisfactionMember satisfaction levels and Net Promoter Score remain extremely high at 98.6% (2017: 98.2%) and 83 (2017: 84) respectively. Net Promoter Score is a score showing how likely members are to recommend us to others. These results are based on 2,317 completed surveys for the financial year across a spectrum of activities including account opening and closing.

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2018 2017 £000 £000Results for the year Net interest receivable 12,663 12,486Other income and charges (249) (423)Net income from financial instruments at fair value (127) 86Administrative expenses (9,267) (8,850)Provision for impairment losses on loans and advances 206 (136) Release/(charge) for customer redress 59 (40)

Profit for the year before taxation 3,285 3,123 Taxation (645) (708)

Profit for the financial year 2,640 2,415

Other comprehensive income Actuarial gain/(loss) recognised in the pension scheme 183 (869)Movement in related deferred tax (31) 148 Movement in fair value of debt securities (21) 15 Movement in related deferred tax 4 (3)Revaluation gain on freehold property 1,322 -Movement in related deferred tax (225) -

Total comprehensive income for the year 3,872 1,706

Financial position at end of year Assets Liquid assets 114,791 120,150Derivative financial instruments 578 531Mortgages 536,183 520,606Fixed and other assets 6,333 5,009

Total assets 657,885 646,296 Liabilities and reserves Shares 520,426 511,655Borrowings 96,294 95,192Derivative financial liabilities 57 1Other liabilities 1,718 1,514 Net pension liability 431 2,888Subordinated liabilities 4,561 4,520Reserves 34,398 30,526

Total liabilities and reserves 657,885 646,296

Summary of key financial ratios % %Gross capital as a percentage of shares and borrowings 6.18 5.68Liquid assets as a percentage of shares and borrowings 18.61 19.80Profit for the year as a percentage of mean total assets 0.41 0.33Management expenses as a percentage of mean total assets 1.42 1.44

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Summary Financial StatementYear Ended 30 November 2018

Notes to the Summary Financial Statement For the year ended 30 November 20181. The gross capital ratio measures the proportion that the Society’s capital bears to the Society’s shares and borrowings. Capital consists of the Society’s general reserves which are the profits of the Society accumulated over the last 169 years, together with an amount of capital raised in the form of allowable subordinated debt. Society capital provides a financial buffer.

2. The liquid assets ratio measures the proportion that the Society’s assets held in the form of cash, short term deposits and Government securities bears to the Society’s shares and borrowings. As liquid assets are by their nature readily realisable, this assists the Society in its cash management and enables the Society to meet requests by investors for withdrawals from their accounts, to make new mortgage loans to borrowers and to fund its general business activities.

3. The ratio of profit for the year as a percentage of mean total assets measures the proportion that the profit after taxation for the year bears to the average balance of the total assets during the year. A reasonable level of profit must be generated each year by the Society to maintain its capital ratios, thereby protecting investors’ funds.

4. The ratio of management expenses as a percentage of mean total assets measures the proportion that administrative expenses as reported in this document (which include depreciation and amortisation) bear to the mean of total assets.

Independent auditor’s statement to the members and depositors of Ipswich Building Society We have examined the summary financial statement of Ipswich Building Society (‘the Society’) for the year ended 30 November 2018 set out on pages 14 to 17.

This auditor’s statement is made solely to the society’s members, as a body, and to the society’s depositors, as a body, in accordance with section 76 of the Building Societies Act 1986. Our work has been undertaken so that we might state to the society’s members and depositors those matters we are required to state to them in such a statement 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 and the society’s depositors as a body, for our work, for this statement, or for the opinions we have formed.

Respective responsibilities of directors and auditor The directors are responsible for preparing the summary financial statement within the Review of the Year document, in accordance with applicable United Kingdom law.

Our responsibility is to report to you our opinion on the consistency of the summary financial statement within the Review of the Year document with the full annual accounts, Annual Business

Statement and Directors’ Report and its conformity with the relevant requirements of section 76 of the Building Societies Act 1986 and regulations made under it.

Basis for opinionOur examination of the summary financial statement consisted primarily of:

• Agreeing the amounts and disclosures included in the summary financial statement to the corresponding items within the full annual accounts, Annual Business Statement and Directors’ Report of the Society for the year ended 30 November 2018, including consideration of whether, in our opinion, the information in the summary financial statement has been summarised in a manner which is not consistent with the full annual accounts, the Annual Business Statement and Directors’ Report of the Society for that year;

• Checking that the format and content of the summary financial statement is consistent with the requirements of section 76 of the Building Societies Act 1986 and regulations made under it; and

• Considering whether, in our opinion, information has been omitted which although not required to be included under the relevant requirements of section 76 of the Building Societies Act 1986 and regulations made under it, is nevertheless necessary to include to ensure consistency with the full annual accounts, the Annual Business Statement and Directors’ Report of the Society for the year ended 30 November 2018

We also read the other information contained in the Review of the Year document and consider the implications for our statement if we become aware of any apparent misstatements or material inconsistencies with the summary financial statement.

Our report on the Society’s full annual accounts describes the basis of our opinions on those annual accounts, the Annual Business Statement and Directors’ Report.

Opinion on summary financial statement On the basis of the work performed, in our opinion the summary financial statement is consistent with the full annual accounts, the Annual Business Statement and Directors’ Report of the Society for the year ended 30 November 2018 and conforms with the applicable requirements of section 76 of the Building Societies Act 1986 and regulations made under it.

Simon Clark for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants One Snowhill, Snowhill Queensway,Birmingham, B4 6GH8 February 2019

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Year ended 30 November 2018 The purpose of this Report is to inform members of the Society about our policy on the remuneration of Executive and Non-Executive Directors. The Report explains how the Society regards the principles of the UK Corporate Governance Code 2014 relating to remuneration, as far as they are applicable to a mutual organisation of our size. The Society has adopted a Remuneration Policy, which complies with the relevant elements of the FCA’s Remuneration Code and the PRA’s Remuneration Policy. The remuneration of individual Directors is detailed in note 6 of the accounts.

The level and components of remunerationD.1. Executive Directors’ remuneration should be designed to promote the long term success of the company. Performance related elements should be transparent, stretching and rigorously applied.

The Society’s policy is to reward Directors according to their expertise, experience and overall contribution to the successful performance of the Society and reflects their roles and responsibilities within the Society. The Executive Directors’ benefit package is designed to motivate decision-making in the long term interests of the Society and members as a whole. A performance-related pay scheme operated during the year for Executive Directors. This was carefully designed to encourage achievement of targets that maintain the financial strength and integrity of the Society, the embedding of the Society’s risk management framework and to recognise performance factors that contributed to the Society’s overall business and member objectives.

Non-Executive DirectorsThe level of fees payable to Non-Executive Directors is assessed using information from comparable organisations (building societies of a similar size).

Remuneration comprises a basic fee with a supplementary payment for holding the position of Chairman of a Committee, Deputy Chairman or Senior Independent Director. This fee reflects the additional responsibilities and time commitments of these positions. Fees for Non-Executive Directors are not pensionable and Non-Executive Directors do not take part in any incentive scheme or receive any other benefits. Non-Executive Directors do not have employment contracts with the Society.

Executive DirectorsThe remuneration of Executive Directors reflects their responsibilities and roles within the Society. This year it comprised basic salary, participation in a three-year performance-related pay scheme and various benefits as

set out below. The Society has no share option scheme and none of the Executive Directors has any beneficial interest in, or any rights to subscribe to any instruments (or shares in or debentures of, any connected undertaking of the Society).

Basic salarySalaries are reviewed by benchmarking against jobs carrying similar responsibilities, from external salary benchmarking data from the building society sector and the financial services sector as a whole, as well as other UK and regional salary data. This encompasses consideration as to the responsibility and complexity of the role, market conditions and demands and the Society’s very high quality standards.

The Society’s approach is not to compromise on quality standards and seek to secure the best and most appropriate people for any particular role at a rate of remuneration consistent with the Society’s financial, business and member objectives.

Notwithstanding the current very competitive market for high quality financial services directors, during the year the Society was delighted to appoint a new Finance Director. The role was externally advertised and the salary was set at a benchmarked level in accordance with the comparison criteria above.

Three year performance-related pay schemeA three year performance-related pay (PRP) scheme operated during the year for Executive Directors, which was designed to encourage the achievement of targets central to the long term sustainability of the Society. The PRP currently allows a maximum of 20% of salary earned for achievement of all targets set which are based on cost management, mortgage growth and member and broker satisfaction metrics and which are subject firstly to meeting defined financial performance and risk management criteria. One third of this payment is deferred until the end of the three-year period to ensure consistent performance is delivered over the longer term. As part of the process the Remuneration Committee sets targets and assesses whether any payment should be made prior to recommendation for board approval.

PensionsThe Society makes a contribution of between 17.5% and 20% of salary for Executive Directors’ pension arrangements. For Richard Norrington and Trevor Slater this is in the form of a cash equivalent payment.

BenefitsExecutive Directors receive other taxable benefits including a car allowance, travel and accommodation allowance when on Society business and a private health care scheme, which covers the Directors and their families. The Society does not provide concessionary home loans to Directors.

Directors’ Remuneration Report

18

Executive Directors 2018

R Norrington (Chief Executive) T Slater (Finance Director - Appointed 28 June 2018)I Brighton (Operations Director - Appointed 1 May 2018)K F Blackburn (Resigned 25 January 2018)

Total

2017P Winter (Retired 31 Dec 2016)R Norrington (Chief Executive)K F Blackburn (Finance Director)

Total*Given that Mr Slater was employed by the Society as a Finance Director Designate prior to his appointment to the Board, his remuneration from 2 January 2018 to 27 June 2018 is also provided.Mr Norrington and Mr Slater have elected to receive cash payments in respect of pension entitlements. Benefits include health care, car allowance and travel allowance.Total Directors’ remuneration amounted to £627,300 (2017: £614,500).

Non-Executive Directors 2018 Fees 2017 Fees £000 £000D W Bowden (retired 29 March 2017) N/A 10.4V Dias (Deputy Chairman) 30.0 27.9P Elcock 28.0 22.8E S Evans (Retired 30 November 2017) N/A 41.6A Harris (Chairman) 43.0 26.6S J Reid 28.0 22.9M A Tennens 26.0 24.8S Liddell (appointed 30 November 2017) 24.0 N/AF Ryder (appointed 25 October 2018) 2.4 N/A

Total 181.4 177.0

Performance related pay

£000

255.473.889.227.5

445.9

86.6

17.1265.1155.3

437.5

£000

33.88.6

10.83.7

56.9

10.0

2.648.019.2

69.8

Sala

ry£000

18.2 5.76.4

–

30.3

6.8

–22.314.7

37.0

Paya

ble

no

w

£000

9.12.83.2

–

15.1

3.4

–11.2

–

11.2

Defe

rred

£000

221.665.278.423.8

389.0

76.6

14.5217.1136.1

367.7

Sub

Tota

l

£000

25.17.87.12.4

42.4

9.2

1.517.511.9

30.9

Bene

fits

Pens

ion

En

titlem

ents

Tota

l

Contractual termsThe Executive Directors are employed on open-ended service contracts; they require 12 months notice to be given by the Society and six months notice by the individual.

The procedure for determining remunerationD.2. There should be a formal and transparent procedure for developing policy on Executive remuneration and for fixing the remuneration packages of individual Directors. No Director should be involved in deciding his or her own remuneration.

The Remuneration Committee consists of four Non-Executive Directors under the Chairmanship of Peter Elcock. The Chief Executive attends by invitation only but takes no part in the discussion of his own salary. The Committee is responsible for the remuneration policy of all Executive Directors and it makes recommendations to the Board regarding remuneration and contractual arrangements. The Committee meets at least twice a year and reviews supporting

evidence, including external professional advice if appropriate, on comparative remuneration packages. It also regularly reviews regulatory requirements as they apply to remuneration to ensure that the regulators’ guidance is followed and applied in practice.

Reports and minutes of the Committee’s meetings are circulated to all members of the Committee and the Chairman of the Committee reports at the Board meeting following a Committee meeting.

Annually the Executive Team together with the Chairman are responsible for setting the Non-Executive Directors’ fees. The Board, with the exception of the Chairman, agrees the Chairman’s fee.

Peter ElcockChairman of the Remuneration Committee8 February 2019

£000

169.248.961.721.4

301.2

57.2

13.0166.1109.5

288.6

T Slater - Remuneration from 2 January 2018 to 27 June 2018*

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4YP, ActivLives, Age UK Suffolk, Barley Players, Birchwood Primary School, Blossom Appeal - Ipswich Hospital, Britannia Primary School and Nursery Ipswich, Children in Need, Compassion, Dementia Action Alliance, East Anglian Air Ambulance, Families in Need (FIND), Fresh Start - New Beginnings, Friends of Ipswich Museums, Gainsborough Museum, Halesworth Volunteer Centre, Heartbeat Suffolk, High Sheriff’s Volunteer of the Year

Awards, Home Start, Inspire Suffolk, Ipswich Housing Action Group, Ipswich Round Table, Ipswich Scout groups, Ipswich Society, Ipswich Transport Museum, Just Talk, Latymer Charitable Trust, Macmillan Cancer Support, Marine Conservation Society, New Wolsey Theatre, Prince’s Trust, Reach (Haverhill), Riding for

the Disabled (Woodbridge), Rotary Club of Saxmundham and District, Royal British Legion Poppy Appeal, Saxmundham Museum, Saxmundham Music Festival, SERV (Blood bikes), Shotley Drama Group, Somersham

Ward Volunteer Group, St Elizabeth Hospice, Sudbury Ephemera Archive, Suffolk Befriending Scheme, Suffolk Community Foundation, Suffolk Law Centre, Suffolk Mind, Suffolk Wildlife Trust, Support Activities for Everyone (S.A.F.E), Surviving Winter, The Shelley Centre for Therapeutic Riding, The Smile of Arran, Twilight Road Races,

Ufford Parish Council, Unscene Suffolk, Wipe Away Those Tears, Woodbridge Wheelchair Rugby.

Aldeburgh103 High Street

AldeburghIP15 5AR

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Hadleigh94 High Street

HadleighIP7 5EL

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Halesworth61 Thoroughfare

HalesworthIP19 8AR

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Haverhill16a High Street

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Ipswich CentralMutual House2 Princes Street

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Ipswich Ravenswood46 Hening Avenue

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Saxmundham10 High StreetSaxmundham

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Sudbury10 Market Hill

SudburyCO10 2EA

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Woodbridge24 Thoroughfare

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Tel: 01394 380537

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