The B&B chairman, Lindsay Mackinlay, believes it was the drop in interest rates over the last year which convinced his members that mutuality was no longer worth supporting, although there is much to the theory that Michael Hardern, the self-styled chief of the carpetbaggers, was in fact the anti-demutualisers' trump card, and increased the anti-conversion vote in Nationwide last year with his publicity-seeking antics and spectacular changes of mind.
When the B&B converts, the share of mutuals in the mortgage market will be down to around 25 per cent, but it is too soon to write the remainder off completely. After narrowly winning the vote against conversion last year the Nationwide, which is the only surviving society large enough to survive as an independent bank, is legally entitled to reject further votes until after the AGM in 2001. On the same basis, the Nationwide believes it can reject a direct takeover bid without consulting its members, although an appeal to members would raise all sorts of issues about democratic rights.
It is however too late to become a member and qualify for a windfall, and since the board in November 1997 required all new members to assign any windfalls to charity, there are already one million new members out of a total membership of eight million who cannot benefit from conversion and therefore have a vested interest in voting against it.
All the other top mutuals have defences against carpetbaggers, either by requiring new investors to give windfalls to charity or, in the case of the Chelsea and the Skipton, by setting minimum investments of pounds 2,500 and pounds 2,000 for new members, while others have put obstacles in the way of investors who are not local to their home territories.
All these societies are, by common consent, too small to convert and compete as banks, but for the foreseeable future they can survive as niche players providing innovations such as Internet mortgages and postal savings accounts as well as marginally cheaper loans and better savings rates.
They also present too small an individual target for a bidder, with too little extra market share to justify the cost of a bid. The time may come when they cannot compete and are forced to seek a bigger partner. But for now converted societies like the Woolwich and the Northern Rock will be bigger and easier targets for predators once the shield which protects them from a hostile bid during their first five years as a bank is withdrawn.