Monday, September 29, 2008

The disappearance of the building societies

Chris Dillow writes at Stumbling and Mumbling:

Bradford and Bingley lived for 149 years as a mutual company. It lasted just eight years as a quoted firm. Halifax survived for 144 years as a mutual, but just 11 as a quoted company. Northern Rock lasted 157 years as a mutual, 11 as a quoted.

Not a single building society that demutualized in the 90s now survives as an independent company.

Does anyone see a pattern here?

He goes on to discuss possible reasons why the building societies have done so badly as quoted companies.

On a personal note, my mortgage was originally with the Leeds Permanent. It was taken over by the Halifax, which soon afterwards demutualised and turned itself into a bank. I received shares which I promptly sold, despite being told by someone that keeping them was a "no brainer". I am feeling rather pleased with my judgement now.


Anonymous said...

Been with the Nationwide for years - never regretted a moment now!

Robin Young said...

There have though also been mergers among the building societies which clung to mutuality - most recently the Derbyshire and Cheshire building societies hastily subsumed into the mighty maw of the Nationwide under Government/FSA approved "fast track" orocedures under which the society members were not consulted. Makes a pretty fair nonsense of mutuality to me!