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A Bath Christmas Carol 

CEO Kevin Gray reflects on the Society’s business year and potential impact of the current economic climate.

I have always been a great fan of ‘A Christmas Carol’ by Charles Dickens.  In my opinion the story of Scrooge’s transformation from a despicable miser into a generous and good man is a masterpiece.  As a thrifty Scot myself, working in money lending, I think that the various television renditions of the story each Christmas give me an annual prod to improve my ways.  I’m hoping that this year’s festive TV schedules will include the classic black and white version starring Alastair Sim or the equally good but more recent version starring The Muppets with Michael Caine. Whichever versions are shown, the joyous ending to Ebenezer’s tale always gets me into the mood for really celebrating Christmas with gusto.  As Christmas approaches, and as I reflect on Bath Building Society’s business year, I could be forgiven for thinking that the Society has been visited by the Building Society version of Scrooge’s three spirits, ‘past’, ‘present’ and ‘yet to come’.

Having been established in 1904, Bath Building Society is one of the oldest retail business in the city of Bath.  It has experienced over a century’s worth of Christmases and survived through previous very difficult times. My predecessors have successfully guided the Society through the challenges of two World Wars, The General Strike, The Great Depression, the 1970’s energy shock, several high inflationary periods and numerous recessions.  Although painful, none of today’s geopolitical and economic events are new to the Society. I can personally reminisce about my past 25 Christmases here and of the excellent colleagues I have worked with over these years.  The Society’s current strength was built on their past hard work, their intuitive stewardship and commitment to improving the lives of our Members. We are seriously proud of our past colleagues who helped build the present.

Today’s economic circumstances are undoubtedly challenging.  The UK economy is suffering from ‘stagflation’ where inflation is high and economic growth is flat or even negative.  A cost-of-living crisis in upon us that will negatively affect all of us over the next few years. Bath Building Society is doing its best to try and protect its colleagues from the worst ravages of this economic storm.  A profitable business has a moral duty to avoid creating Bob Cratchit style living conditions amongst its workforce. To help with immediate cost of living pressures, the Society has already awarded all of its colleagues below Executive level a one-off grant of £1,000. The Society has also brought forward by two months the implementation of its annual salary review for its lowest paid colleagues, and it has established new entry starting salaries that remain substantially above the level of the latest Real Living Wage as determined by the Living Wage Foundation.  Furthermore, we intend to boost our contributions to employees’ pensions in the New Year and to implement a wider salary review for other grades that will maintain our competitiveness as a local employer of choice. There is no time like the present to invest in our greatest strategic asset, our fabulous team of people.

With interest rates rising, the Society has to carefully balance the expectation of its savings customers against the impact on its borrowers of charging higher interest on their mortgages. Sadly, our borrowers will not be immune to financial strain, and we are unfortunately expecting mortgage arrears to rise in 2023.  We are not in the game of deliberately making people homeless however.  We aim to help our arrears customers through any periods of payment difficulty if we can, and to only repossess properties as a last resort if that is the best remaining option available to help borrowers get out of a jam.

In ‘A Christmas Carol’, Scrooge is shown a bleak vision of the future by the spirit of ‘Christmas Yet to Come’.  Through Scrooge, Dickens wanted his readers to change their ways to make Victorian Britain a better place.  There is a lesson in here for businesses.  If we are to bounce out of these rather miserable times and thrive in the future, we must do something different. Never has the old phrase of ‘today’s investment will be tomorrow’s growth’ been truer.  Although the approaching recessionary times will undoubtedly be challenging, we must avoid the temptation of battening down the hatches and cutting back on investment.  The Society aims to significantly ramp up its investment in people, process and technology over the next two years in order to deliver productivity benefits and to improve customer journeys.  Although this will reduce short term profitability, this investment will drive the growth in our revenue streams and secure our future prosperity.

Despite the strong economic headwinds, I am confident the Society will still be working at improving the lives of its Members for many a Christmas yet to come.

A very happy and peaceful Christmas to you all.

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