A KPMG report published last week predicted that the building society sector could be due for another round of carpet bagging, as societies are forced to merge due to financial and regulatory pressures. The UK’s 58 building societies have withstood the credit crunch relatively well compared to their banking counterparts, although a few, such as Derbyshire and Cheshire, have experienced problems with commercial loans or on sub prime lending.
But times are tough and some societies are having difficulty competing with the banks on mortgage rates because of their reliance on retail deposits for the bulk of their funding, which could become vulnerable in the event of a prolonged economic downturn.
Nationwide recently announced it intends to set up a Dublin operation so that it can tap the European Central Bank for additional funds. New capital requirements under Basel II regulations will also add to the pressure on societies.
KPMG financial services partner, Richard Gabbertas, reckons that these pressures will force a number of the societies to merge with their larger peers, such as Nationwide, triggering cash windfalls for the members of the societies being taken over.
The latest such windfall is going to the members of the Catholic building society who are set to receive a yet unstated cash payment following its takeover by Chelsea earlier this year. Anyone who remembers the building society demutualisation bonanza in the 1990s may want to cash in by opening accounts with a range of societies which they think are likely to be taken over.
But experts says the payouts for carpetbaggers this time round are likely to be in the low hundreds and many societies now insist that you assign any windfalls triggered by a demutalisation to a charitable foundation for the first five years of membership, although this does not apply to merger bonuses.
Defaqto banking principal, David Black, says: “It is likely to be the smaller societies which are forced to merger because of regulatory and succession issues. However, some regional societies restrict membership to local residents and some require higher minimum deposits of a £1,000 or more.” Many societies are currently offering high rates of interest on regular savings accounts.
For details, visit:http://www.defaqto.com/consumer/savings-accounts/regular-savings-accounts.aspx
For more the top instant access savings accounts visit:
http://www.defaqto.com/consumer/savings-accounts/instant-access-accounts.aspx
I opened a Federation of Small Business Bank account on offer by the CO OPerative bank, who claim ” no charges”, “internet banking “,” good service”, and “value for money”. One out of four would have been a start. Co Operative bank claims to be “ethical”, although experience shows they are most unethicaln negligent and incompetent. There is NO PROPER CLAIMS PROCEDURE, and customers are redirectored to Mr Kinnell who is the ” manager”, who apparently knows nothing, and refuses to permit access to a senior member of the Bank. The CO OPERATIVE BANK withdrew three sets of cheques out on three separate occasions , and claimed this was an ” internet error”, and ” the account had not had cheques removed”, but Mr Kinnell refused to provide a statement to us as customers to prove this.
Since we complained neither the Finance director NOR the MLRO will confirm, or reply or respond. This is clearly a cover up by the most senior employees of the Co Operative Bank.
Is any otherpeople experiencing difficulties obtaining information from employees of the Co Operative Bank ? please feel freee to contact me either through defacto or direct, or alert the Federation Of small Businesses.
Kind regards
Ian Lees onreport this comment
YOu should take your complaint to the Financial Ombudsman Service www.financial-ombudsman.org.uk
0845 080 1800report this comment