The Bank of England (BoE) has published a speech given last week by Deputy Governor Andrew Bailey at the Building Societies Association Annual Conference, which included BoE’s impressions of the state of the building societies sector as a whole and the PRA’s approach to the governance of firms.

Comments included:

  • Key indicators for the sector were positive, including an improving net interest margin, low rates of arrears and strong net new lending.
  • There exists a potential for margin pressure owing to heightened competition in the mortgage market, which may tempt lenders to seek higher returns through riskier loans.
  • Appropriate mitigation of cyber risk and IT systems risk were an important focus of BoE.
  • It will consult on changes to the Building Society Sourcebook later this year.

Further details of the speech can be found here.