Bristol & West says capital is healthy

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The Independent Online
BRITAIN'S tenth largest building society, Bristol & West, yesterday said that the large provisions that it is having to make against its mortgage loans will not affect the group's capital position.

The assurance comes after many depositors - including a West Country stockbroker managing funds for clients - withdrew money after the Independent disclosed that the society was about to announce a dramatic fall in profits on Monday.

The broker took the step for reasons of prudence, and is understood not to believe there was any danger in keeping its clients' deposits at Bristol & West.

However, many clients of another West Country broker, Stock Beech, had their assets frozen when Stock Beech's sister company, British & Commonwealth Merchant Bank, collapsed two years ago along, with its parent, British & Commonwealth Holdings.

Ironically, the B&C collapse was good for Bristol & West because it bought the Hampton's estate agency chain from the administrators.

Tony FitzSimons, Bristol & West's chief executive, said that the larger-than-expected provisions, forced upon the society because of declining property values, would not affect the group's key capital ratios. Mr FitzSimons said that it would remain among the half dozen most solvent building societies, as measured by total capital.

'We have more than adequate capital to fund the society's lending lines on behalf of depositors,' Mr FitzSimons said. 'Few are stronger than us.'

Bristol & West is expected to disclose a 75 per cent fall in its profits for the six months to the end of June when it announces them on Monday.

The equivalent figures last year were profits of pounds 28m. But those only included provisions of pounds 2.9m for problem loans. In the whole of 1991 the society set aside only pounds 16m for bad debts, while the next biggest society, the Britannia, provided twice as much.