Outlook: Staying mutual will be hard to do
Tuesday 27 April 1999
Building society conversion has in truth been little more than a giant con on the British public. There is no such thing as a free lunch and there is certainly no such thing as free shares. Over the years ahead, we will all end up paying through higher mortgage and worse savings rates for the "giveaway capital" these companies now have to service. It is impossible to quantify the exact extent of this trade-off between short- term gain and long-term loss, but Nationwide is probably not too far off the mark in putting it at pounds 3bn-plus per annum.
There are, of course, many cases of proprietary companies offering keener rates than mutually owned ones. But in the main these are one-off promotions, or loss-leading offers that do not last. It also needs to be asked whether any of them would exist at all but for the competitive pressure that the mutual sector continues to add to the market place. All other things being equal, the fact that mutuals don't have to pay a dividend will always make them more competitive.
Over the years, Bradford & Bingley has made a reasonable fist out of demonstrating these mutual benefits to customers. If even then its directors were unable to stop members voting for the short-term gain of conversion, what hope for others? B&B was slower at closing its doors to the carpetbaggers than others, and this certainly made it more vulnerable. Nationwide is going to have to fight hard for its continued mutual status, but it shows little sign of tiring just yet.
- 1 Michael Brown shooting: Police shoot and kill second young black man near Ferguson
- 2 James Foley 'beheaded': Isis video shows militant with British accent 'execute US journalist' – and warns Obama of more to come
- 3 ALS ice bucket challenge co-founder Corey Griffin drowns aged 27
- 4 Cilla Black defends Cliff Richard: 'I am positive that the allegations are without foundation'
- 5 James Foley 'beheading': Met police warn public watching murder video could be criminal offence
James Foley 'beheaded': PM cuts holiday short for emergency meeting on British response to latest Isis atrocity
Michael Brown shooting: Police shoot and kill second young black man near Ferguson
ALS ice bucket challenge co-founder Corey Griffin drowns aged 27
James Foley 'beheaded': Isis video shows militant with British accent 'execute US journalist' – and warns Obama of more to come
Iraq crisis: Islamic State's message to America - 'We will drown you all in blood'
Scottish independence: English people overwhelmingly want Scotland to stay in the UK
Isis threat: Cameron wants an alliance with Iran
Crisis? What crisis? A visiting US doctor gives the NHS a rave review
Ukip MEP calls for reintroduction of death penalty on fiftieth anniversary of last deaths
Russell Brand calls for Israel boycott: Comedian urges big businesses that 'facilitate the oppression of people in Gaza' to pull funding
Michael Brown shooting: Chaos erupts on the streets of Ferguson after autopsy shows teenager was shot six times – twice in the head
iJobs Money & Business
£45000 per annum: Harrington Starr: Quantitative Analyst (Financial Services, ...
Negotiable: Harrington Starr: Application Support Engineer (C++, .NET, VB, Per...
£450 - £600 per day: Harrington Starr: AIFMD Business Analyst / Consultant - I...
£450 - £600 per day: Harrington Starr: Business Analyst Solvency II SME (Pilla...