Cardiff Breakfast Club 10th January – Graeme Yorston, Principality

Posted: January 10, 2013 in Business/Cardiff News, Cardiff Breakfast Club, Events
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Breakfast ClubGraeme Yorston, Chief Executive of the Principality group, was our first speaker of 2013. He addressed a packed audience at this morning’s event, kindly sponsored by our long-standing host venue, the St David’s Hotel & Spa.

Principality is the largest building society in Wales, and the 7th largest in the UK. The Group comprises of 4 businesses, covering the building society, lettings agent Peter Alan, personal loans and commercial lending. Graeme joined in 2006 as Chief Operations Officer after many successful years with Abbey National (now Santander), becoming Chief Executive in October 2012. His in-depth experience in the sector leaves him very well placed to discuss “how we got to where we are” economically, as well as the key differences between mutuals and PLCs, and the importance of engaging with local communities.

Graeme began by reading a letter from a disgruntled bank customer that demonstrated public attitudes and frustrations towards banks. Many of these hit home with the audience – yet Graeme revealed the letter was actually 15 years old. So, he asked, what has changed?

While “not here to knock banking”, Graeme outlined just some of the issues that had “battered” the sector during 2012, including the PPI scandal and the introduction of complex dual regulations. He suggested that the cultures at the heart of our current situation must be “reset and rebased” in order to repair it – something that will take a long time.

Graeme Yorston, chief executive of Principality

Graeme Yorston, chief executive of Principality

He took the opportunity to outline how building societies are different from banks. At its very roots, Principality is “a safe place to deposit savings, to help people to enter the housing market”. As a mutual it has no shareholders; “every member is an owner, and every member has a vote”. Another key difference is their approach to profit. Building societies look for profit optimisation rather than maximisation, endeavoring to make enough profit to protect the business’s capital, and then looking to return value to members.

This return of value drives Principality’s commitment to community involvement, something Graeme said is “expected from businesses” at the moment. Principality invests a huge amount of time, effort and resources into its community commitment schemes, supporting community groups (such as Only Boys Aloud) and key cultural events like the Eisteddfod and Royal Welsh Show. It is so closely associated with rugby (as sponsor of the premiership) that many believe it to be the sponsor of the Wales team!

Principality also conduct research in order to respond directly to members’s concerns such as the survival of the high street, an “absolutely key place to do business”. Principality has upped its physical presence and representation in Wales, combining branches to “use assets more intelligently”.  Principality also invests in education, with a comprehensive work experience scheme that promises to take on 4 students a year from its two partner schools.

In the future, Graeme sees “definite opportunities” to grow. The Group will look to grow outside of Wales, although this will be done primarily through their e-channel. The Group brand is “very powerful” in Wales, and trust in building societies remains “strong”, leaving Graeme optimistic. Headlines concerning the industry as a whole have also improved in recent weeks, although the dramatic “rebasing” of cultures still needs to be achieved. In all, the industry is making steps along a positive path – but we may be in for a bumpy ride.


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