The announcement will cause grave concern in the building society movement, which is struggling under the weight of falling property prices.
Larger-than-expected provisions against property in the half year to June are responsible for the dive in profits.
Bristol & West is not alone among building societies to be hit by declining property values. However, the scale of the provisions is thought to be surprisingly high because the society provided less in previous years.
In the year to December 1991 Bristol & West set aside pounds 16m for loans that might go awry. The next biggest society, the Britannia, provided more than double that figure at pounds 32m. Provisions at the eighth largest society, National & Provincial, were more than three times as large as at Bristol & West's.
Tony FitzSimons, Bristol & West's chief executive, said yesterday he could not say what the interim profits figure would be because he was constrained by Stock Exchange confidentiality rules.
As a building society Bristol & West does not have ordinary shares but does have permanent interest-bearing shares, the market in which it is regulated by the Stock Exchange.
However, despite the constraints, Mr FitzSimons said: 'It is quite likely that our interim results will reflect a comprehensive review of our provisioning.'
He rejected the suggestion that Bristol & West had underprovided for bad debt in past years. He said conditions in the housing market had deteriorated significantly in recent months.
'We are entirely satisfied that any change in our provisioning will be because of further downturns in the housing market,' he said.
Next Monday's figures will compare with a pounds 28m profit for the first six months of 1991. Provisions made in that period totalled pounds 2.9m. Full year pre-tax profits came in at pounds 67m, up from pounds 61m in 1990.
The scale of the increase surprised some in the industry, particularly as many societies were reporting a drop in profits at the time.
In June last year Bristol & West took over the much smaller Cheshunt Building Society after the Hertfordshire society ran into problems with arrears on mortgage payments and falling profits.
Prior to the intervention of Bristol & West, Leeds Building Society set up a standby credit facility to guard against a run on the troubled society's funds by savers.
According to research by the securities house UBS Phillips & Drew, a key ratio measuring Bristol & West's capital strength is below the average for the top 20 societies, but it is far from the weakest using that measure.
The Building Societies Commission, which regulates societies, declined to comment on the financial performance of Bristol & West. But a spokesman said: 'In the matter of ensuring investors' interests are protected, our record speaks for itself.'Reuse content