Building societies have an opportunity to show leadership and achieve their social purpose in an increasingly insular world, according to the chief executive of Nationwide.
Joe Garner's speech to delegates at the Building Societies Association's annual conference in London today (May 4) emphasised the need for mutuals to work for the benefit of wider society in a world where people are "pulling up drawbridges".
He said: "We are an inherently drawbridge-down organisation - we have a responsibility to take the values and purpose that underpin our model and use them to contribute to wider society. We have an opportunity to lead for mutual good."
In the wake of the Brexit referendum result, Mr Garner pointed out that despite considerable progress on many fronts, large parts of society have become disillusioned with the status quo as they are cut off from prosperity.
Hearkening back to the beginnings of the mutual movement, he said that building societies now have the opportunity to promote their alternative business model and continue to innovate.
As an example of such innovation, he cited the opening of a new, community-led Nationwide branch in Glastonbury after the town was left without a major financial services provider following the closure of its branches of Barclays and Lloyds.
Mr Garner also stressed the work Nationwide does to support its staff, including a commitment to the living wage, the introduction of a more generous pension scheme and a bonus scheme to reward employees' hard work.
He said the company is also investing in leadership skills to ensure staff members are able to operate "in a drawbridge-up world, but in a drawbridge-down way".
Mr Garner told delegates: "If you can do this as a movement, we have the opportunity to make even more of a positive difference."
In February Nationwide announced that profits were down in the third quarter because of the lenders "highly competitive" products.
In its interim management statement for the last nine months of 2016, the building society said underlying profit before tax had reduced 23 per cent to £866m because of a reduction in net interest income on top of growth in underlying costs.
The building society said its net interest margin – the difference between interest received and interest paid out – was down to 1.33 per cent.
But Nationwide said this had been anticipated and was due to “sustained levels of competition” in the mortgage market combined with continued natural attrition of the residential base mortgage rate balances.
simon.allin@ft.com
