Customers back mutual status

Building society customers would rather have better interest rates than cash or share windfalls, according to a survey commissioned by Bradford & Bingley, one of the most outspoken opponents of the recent rash of demutualisations among societies, writes Steve Lodge.

Only one in five people is in favour of building societies converting into banks, falling to one in 10 if there was no windfall on offer, according to the survey. B&B found customers would want more than pounds 3,000 each to sell out in a hostile takeover.

As well as believing societies offer better rates than banks, those surveyed said societies gave customers better service and Britain would be worse off if there were only banks.

The findings contrast sharply with the proven willingness of society customers to vote in favour of selling out to receive pounds 500-plus windfalls, most recently in the case of National & Provincial building society, taken over by Abbey National. All the large windfall proposals announced so far have been recommended by the boards of societies.

John Wriglesworth, Bradford & Bingley's director of strategy & communications, said the survey results probably did overestimate how much customers really valued societies. "There is a guilt thing about admitting you're greedy," he said.

But he added the results showed a strong level of customer support for the boards of societies determined to resist takeovers, which include B&B.

Hostile takeovers are seen as a distinct possibility, with Prudential, the insurer, talked of as a likely predator of Woolwich.