Progressive Building Society chief Darina Armstrong: People want to live here and we will be there to lend'
Progressive Building Society chief Darina Armstrong tells Margaret Canning about how the shamed bank boss visited them in Belfast and why an economics teacher inspired her career
As an institution, it embodies a traditional Northern Irish caution combined with a cosy image. So it's appropriate that Progressive Building Society chief executive Darina Armstrong has long embraced sensible money habits, which she says were inculcated in her during her childhood in Dungannon.
Progressive is known for its conservative lending policies - which ensured it was the only lender operating in Northern Ireland to stay in the black during the economic downturn.
During 2015, that innate caution, coupled with continued recovery in the housing market, helped Progressive grow mortgage lending by 20% from £153m to £185m, though Darina won't put a figure on 2016 so far. But she does say: "It's commercially sensitive, but it would be up. It's a good year."
Being sensible with its members' money has long been the mission of Progressive, which is Northern Ireland's only locally-owned lender. And that cautious approach meant the board turned down an offer from the Co-operative Bank to buy the business.
That was back in 2011, when then Co-op non-executive chairman Paul Flowers approached the society, asking to visit is headquarters in Wellington Place in Belfast. He made an offer to buy it.
"The board turned him down as it wasn't in the best interests of members," says Darina.
"We passionately believe that remaining independent is for the better interests of all our members. We are the only fully Northern Ireland-owned mortgage provider.
"Ultimately we were flattered. They wanted to buy us because of our reputation and because he had done his research and we were very impressed that he had done his homework. And in 2011, times were still tough in the economy. But I'm very glad now."
Around two years later, Mr Flowers was exposed for drug use and the Methodist minister became known by the colourful tabloid moniker of the 'Crystal Methodist'.
The bank also suffered losses of £1.3bn that year and was rescued by US hedge funds. It's since shrunk its operations and has closed its only branch in Northern Ireland. Darina, who trained as an accountant, chooses her words carefully in every instance and is always measured in her approach- except when it comes to fiscal policy at the Bank of England.
The society uses members' savings to fund its mortgage lending. And while Bank of England Governor Mark Carney's decision to halve interest rates to 0.25% in the weeks after the vote to leave the EU has benefited borrowers, Darina bemoans its impact on savers.
"I think he (Mark Carney) jumped the gun a little and I don't think we needed that last rate cut, personally," she says.
"Borrowers' lives have been made easier but savers - who have been having it tough - weren't helped at all by it."
Darina, who's married with a son and daughter aged 17 and 19, grew up in Dungannon in Co Tyrone and now lives in south Belfast. Her only sibling, a sister, lives in Co Kildare, and her father Eugene still lives in Dungannon. Her mother Ita passed away nearly five years ago and both of her parents were teachers.
"My father was the fifth generation of teachers on his side of the family," she says.
"I am passionate about education and don't believe that when you leave school, or university and go into work that it should stop."
As a pupil at the all-girl part of St Patrick's Academy, Darina says there were expectations for pupils to go into teaching or nursing as careers. Thankfully, she was able to explore her interests in other subjects when a teacher at the male half of St Patrick's was made available at the girls' school.
"I was always very good at maths and took up economics. Our economics teacher - who's now sadly passed away - was one of those people who was able to make business and the economy sound exciting - even things like supply and demand.
"He had worked in business and then become a teacher. He was able to bring his experience to how he taught."
She studied accountancy at Queen's and then took on a postgraduate course to become a chartered accountant, then joined Peat Marwick - which eventually became part of KPMG.
Darina then joined Progressive as an accountant. "I was never expecting to end up as a chief executive but as the years went on I was promoted, and I became head of finance, finance director and was appointed to the board in 2005," she says.
"It's been a gradual progression through being hands-on, which is nice, as a CEO you're overseeing things so it's good to know how everything works."
Financial education is one of her passions - and that means always emphasising the importance of savings.
"I think savings are a good thing to have. We have first time buyers' ISA paying 2%. It's a very good thing to have a savings culture, rather than a culture where you're buying everything on credit," she says.
"There's a culture of saving in Northern Ireland that's stronger than other UK regions. We are quite conservative - in a good way. It's good to have savings to fall back on.
"Savings aren't all about the return but just about that ability to be covered if something happens. Never mind saving for weddings or housing deposits. You should save just to have the comfort of knowing that you have a few pounds - and then save money for the nicer things."
Darina has a credit card for the convenience of the credit guarantee for shopping online but pays it off in full every month and enjoys the benefits of the points that accrue. "It's how I was brought up," she says. "You don't spend what you don't have. You don't live on what you don't have. You only buy if it you have the money to pay for it. And if you start the habit of living beyond your means, it's very hard to get out of it. That's what I have been teaching my own kids."
She has never been preoccupied with gender issues in the workplace, but does want to lend support to other women who are progressing in business, and she took part in mentoring workshops at a recent Women in Business conference.
"As for leadership skills, I've probably learnt from my father, who's been a brilliant role model," she says. "Teamwork is important and is the Progressive way of doing things. People here are hardworking and love what they do."
Darina is proud of the financial record of the Progressive and wants it to remain in its traditional form.
"We are very fortunate to be in a unique position. We are in the business of being a mutual and we are here for the good of our members," she says.
"We have no shareholders no parent company telling us we can't do this or that." And if a job leading Danske or Ulster Bank came up tomorrow, would she go? "No. I'm not for moving." She admires the credit union model of low-interest loans to its members, "but we're not in the same space as we don't do personal loans and just lending for house purchase".
The society has mulled offering current accounts to members.
"We will probably continue to look at that but we have no pressing plans," she says. "We are not a bank so things like overdrafts would not sit well with us and don't sit comfortably with being a mutual. We are a building society and that is the best way to encourage good habits and encourage savings."
Independence is crucial to the Progressive - hence the decision to turn down the Co-op Bank.
"We're going through Brexit but we've been through the economic downturn and the Troubles as well and grown through those times. But another provider can easily pull out and now the Co-op has closed its branch in Belfast," says Darina.
The society celebrated its centenary in 2014 and merged that year with City of Derry building society. "The merger has gone really well, and we've grown our customer base and mortgage market."
Darina says she enjoys visiting other branches - and that its network of branches is crucial.
"We are not in the business of closing branches," she adds. "It's about customer service. People love coming in and being able to talk to someone. Someone in Ballymena wants to be able to talk to someone in Ballymena and not be put through to a call centre."
Last month the society won a 'best practice' mark of distinction from the Keep Me Posted campaign, in recognition of its policy of giving customers the option of paper statements.
"We've absolutely embraced technology, but when we looked into it a lot of people don't have computers and internet access. So while embracing tech, people can still come into a branch and still get paper statements," says Darina.
"It's not just about what's the cheapest option but what's the best option." Its financial results reflect the housing market's gradual recovery. Between 2013 and 2014, its bad debts fell from £14m to £13.1m. Gross capital grew from £88.7m to £100m, while total assets grew by £48m, to reach £1.7bn And at year end, there were 39 borrowers in arrears, compared with 60 in 2014, while mortgage money outstanding was at £6.3m, which was down from £10.4m.
Retail savings had also grown to £1.517bn from £1.516bn.
Darina is personally gratified by the growth in its lending.
"The housing market is obviously our bread and butter, and it's great to see there are plenty of new developments after a time of there being absolutely none," she says.
"Now we're even seeing home movers, which has begun slowly. That's good too.
"And there are great prices to be had, still, though greater Belfast would be seeing more activity than the further away regions.
"It's lovely to see fresh, new housing though we do need a lot more of it. But it's just good to see developers and builders working."
Housebuilders contributing to the growth in the market include Hagan Homes, which is based in Ballyclare. Last year it completed 191 new homes - its best year since 2006.
And she feels confident that Northern Ireland will be able to withstand any downside of Brexit.
"People will still want to live in Northern Ireland and we will still be there to lend," says Darina.
"As far as Brexit goes, I think Northern Ireland's economy is quite resilient. Exports are doing extremely well and we were the only region that managed to increase exports in recent figures (covering a 12 month rolling period to June 2016) so we know there are still opportunities.
"When it comes to Brexit, we just need to go through the process. We have to put our confidence in Stormont that they will make sure the best possible outcome can be achieved for Northern Ireland."