Yorkshire Building Society has been named the most efficient mutual in analysis by Target Group.

In its research, the software provider looked at total assets compared to the number of staff employed to measure efficiency.

Target looked at the annual reports of building societies with combined total assets of almost £550bn, employing more than 30,000 full-time (or equivalent) employees.

As an industry, building societies have on average, £18.1m of assets per member of staff employed.

Tier 1 societies, with more than £10bn of assets each, had an average of £20m worth of assets per employee. 

But within this tier there were significant variations.

Yorkshire Building Society had £28.3m worth of assets per employee, but Newcastle had £10.8m.

In Tier 2 societies, with between £1bn and £10bn of assets, the average value of assets per employee was approximately £9.5m.  

In this tier, Progressive had £14.4m worth of assets per employee whereas Cumberland had £6.7m.

The average value of assets per employee was approximately £7.9m in Tier 3 societies – i.e. those with between £500m and £1bn of assets.  

The most efficient mutual of this size was Swansea with £10.4m worth of assets per employee, while at Mansfield had £6m/

The smallest building societies, with fewer than £500m of total assets, have an average of £7.2m worth of assets for every employee.

Stafford Railway was the most efficient with £10.1m, while the Ecology had £5.3m.

Target Group’s Melanie Spencer says: “This is a crude measure. 

“But the ratio of assets to employees strikes at the heart of the issue of automation in the sector – of building societies’ willingness or otherwise to adopt technology to improve their productivity.  

“You would expect the largest societies to be the most efficient since they are enjoying the biggest economies of scale. 

“But our research highlights that this isn’t necessarily the case. 

“Nottingham is a large operation, with total assets of £5.2bn, but it employs 510 people – that’s £10.3m worth of assets per employee.  

“That’s a similar ratio to Stafford which only has £25m worth of assets. 

“At the other end of the spectrum, Nationwide’s total assets are three times greater than Yorkshire’s – but their workforce is five times the size.  

“A lot of this is down to digital transformation.  

“Some societies have invested so they can do more with less while others have not.  

“That’s somewhat concerning for the sector given that societies need to be embracing digital transformation and addressing legacy systems.  “Technology is going to be absolutely critical for long-term success of the mutual movement.  

“If mutuals don’t adopt emerging technologies, they will fall behind.”

Yorkshire Building Society’s chief executive was one of three lenders to write to the chair of the Treasury Select Committee to call for the Bank of England to raise the loan to income (LTI) flow limit.