West Bromwich Building Society 'to be rescued'

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The West Bromwich Building Society is poised for a rescue deal within days, it was reported today.

The group could be rescued in a Dunfermline-style deal under a number of options being looked at by the Treasury and the Financial Services Authority (FSA), according to the BBC.



But West Bromwich savers will not lose money and its mortgage customers will also not be affected, the BBC said.



The mutual has been at the centre of speculation over its future for weeks, despite assurances from the firm over its health.



West Bromwich, which is celebrating its 160th birthday this year, has almost 600,000 members and employs around 800 staff, with nearly 50 branches across the UK.



The West Midlands-based mutual - the eighth biggest building society in the UK - could be broken up, with its savings arm transferred on to another building society and its assets taken over by the Bank of England.



Such a deal would be similar to the rescue of Scotland's Dunfermline building society in March, which saw parts sold on to the Nationwide building society.



West Bromwich was not immediately available for comment, but has recently denied reports of sale talks and last month sought to assure over its "long-term future" as an independent business.



A number of other mutuals have reportedly been lined up as possible buyers, with the Coventry and Yorkshire building societies said to have been in the frame.



The speculation comes ahead of its full-year figures on Monday, which are expected to reveal big losses for the year to March 31 because of its exposure to risk-laden buy-to-let lending.



Reports suggest auditors are yet to sign off its accounts, with fears it is close to breaching regulatory capital requirements.



Concerns have been mounting over building society exposure to higher risk lending, such as buy-to-let, self-certification and commercial mortgages, as well as loans made to people with adverse credit histories.



Rating agencies have recently downgraded a number of players in the sector - with West Bromwich among those seeing their ratings slashed.



The FSA said earlier this month it was launching a new crackdown on societies branching into riskier business without the proper controls in place.



The Treasury, meanwhile, is believed to be working on plans to allow ailing societies to boost capital without losing their mutual status.

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