Big players may join forces

Building Societies Conference 1995
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The Independent Online
Larger building societies are warming to the idea of banding together to protect themselves from hostile bids from the high-street banks.

Until recently, such alliances were a strategy thought to apply only to smaller societies. But the bigger organisations now want to be allowed to merge while keeping their own names in their separate business areas. This would be designed to prevent further hostile approaches by banks similar to the current attempt by Abbey National to take over National & Provincial.

A spokesman for Bradford & Bingley said the society was committed to the concept of mutuality. "The board haven't discussed the Hollick proposals yet, but we liked the message he put across," he said.

He argued that building society reserves were held by the management in trust for future generations of members, not just for the present membership.

A spokesman for the Birmingham Mid-Shires society said that being owned by, or becoming, a bank had many disadvantages. "Why should building societies give up the chance to be the jewels in the crown of the financial services world, noted for their friendliness and good service? Banks treat you as a number, building societies as a customer."

Adrian Coles, secretary of the Building Societies Association, said the biggest problem facing societies was that it was easy for banks to dangle cash inducements to society members to vote in favour of selling up.