Societies condemn UBS report

Several of the UK's biggest building societies including Nationwide, Woolwich, and Alliance & Leicester, have failed to make the top 10 list of creditworthy societies, according to a report published yesterday by UBS, the Swiss banking group.

Among the reasons for the societies' relatively poor showing were arrears problems and excessive running costs, together with the ownership of high- volume, low-profit margin businesses.

The UBS report, compiled by building society analyst Rob Thomas, places Woolwich in 15th place, while Alliance & Leicester is 11th.

However, the UBS table was yesterday attacked as misleading by several societies, including Nationwide and Yorkshire, which improved its own standing to third place.

Andre Pearce, finance director at Yorkshire, said: "Putting us in the same league as those set to become PLCs is like trying to produce a result from a rugby match where one team is playing to union rules and the other rugby league."

Mr Pearce said the report failed to give sufficient weight to the way some societies, including Yorkshire, incorporated the amount spent on mortgage cash-backs and discounts into their accounts as they arose. Other societies prefer to amortise, spreading the cost of their incentives over several years.

In the case of Yorkshire, doing so would have added pounds 13m to profits in 1995. The society estimates that its profits for 1996 would increase by pounds 26m.

Brian Davis, chief executive at Nationwide, which comes 14th on the UBS list, said his society had refused to contribute to Mr Thomas's report because of concerns over its nature.

Mr Davis said: "This report tries to add apples and pears. For example, we are referred to as having one of the highest arrears problems of any society. But the solution there would be simply to repossess, which is not what we are about."

Mr Thomas said his list was not an attempt to score societies in terms of whether they offered the best mortgage or savings or simply had bad arrears problems.

The top ten

1995 1994

Halifax 1 1*

Northern

Rock 2 3

Yorkshire 3 4

Coventry 4 1*

National &

Provincial 5 16

Britannia 6 12

Bradford

& Bingley 7 11

Abbey

National 8 -

West

Bromwich 9 15

Birmingham

Midshires 10 7

* indicates joint first

Abbey National is included for the first time