Bad debts hold back Woolwich advance

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The Independent Online
WOOLWICH Building Society has announced slightly higher 1992 profits, held back by a doubling in bad debt charges after the May merger with Town & Country Building Society, writes Lisa Vaughan.

Pre-tax 1992 profits were pounds 149.3m, up 10 per cent from pounds 136.4m the previous year. Provisions to cover loan losses at Woolwich rose to pounds 144.7m from pounds 72.4m, with the former Town & Country's bad debts accounting for about a third of the total.

Woolwich subsidiaries made a pre-tax loss of pounds 24m after a pounds 30m loss in 1991.

Donald Kirkham, chief executive, said the number of borrowers falling behind on payments had increased to 43 per cent from 35 per cent last year. Unemployment is now the main cause.

Arrears have stabilised overall, but they still affect 9 per cent of the society's 541,000 borrowers. Woolwich took 3,364 properties into possession, 11 per cent below the 1991 total.

An pounds 11.4m net exceptional item relating to rationalisation also curbed pre-tax profits.

Despite this, Woolwich cut its costs to 50.7p from 59.9p per pounds 1 of income.