Building society chiefs attack B&B conversion

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The Independent Online
BUILDING SOCIETY chief executives yesterday joined forces to attack Bradford & Bingley for its decision to convert into a bank and questioned whether its board should resign.

The heads of Yorkshire, Portman, Skipton, Leeds and Holbeck and Dunfermline building societies said B&B's board had reversed its stance on becoming a bank without gaining enough votes to support a conversion.

B&B's board has decided to begin moves towards demutualisation, acting on the spirit of last month's resolution, in which a majority of members backed the idea. This, however, is less than the 75 per cent legally required for a demutualisation to be formally approved. Less than 65 per cent of savers voted in favour and more than 60 per cent of borrowers were against.

A final decision on whether to float is expected to be taken by members in two years' time.

A B&B spokesman said: "The decision was taken on the basis that the vote was overwhelming. We would have been criticised no matter what we did."

Speaking at the annual conference of the Building Societies Association in Harrogate, David Anderson, chief executive of Yorkshire Building Society, said: "It would have been possible for B&B to take a different view. The board hasn't said how the long-term savers voted or whether they were in favour of staying mutual. I don't call that democratic. In most places it would be called a bribe."

The building society chiefs were particularly surprised at the speed of Bradford & Bingley's decision to reverse its defence of mutuality.

John Goodfellow, Skipton's chief executive, said: "I was not surprised most members of the B&B voted to convert because of the number of carpetbaggers but I was shocked and horrified by the board's turnaround."

The societies also condemned the campaign led by the Sunday Express to force Nationwide, Britain's biggest building society, to convert. As part of the campaign Richard Branson said last week he would consider standing as a candidate for Nationwide's board if windfalls could be distributed to charity. It has since emerged that a converted society - probably Alliance & Leicester - was touting the idea as a publicity stunt.