The Investment Column: Woolwich
Friday 30 July 1999
IF YOU'RE with the should you stick with it? Now its half-year results are in, all of the building societies who have turned themselves into banks have reported. Each has seen its share price fall irrespective of whether the numbers where better or worse than the City scribblers had predicted. was no exception. Its shares fell 24.5p to 333p after delivering profits which, at pounds 250.3m, were at the lower end of analysts' expectations. Given that the stock market as a whole had a bad day yesterday, the fall was not as bad as it looked.
The City seems to believe that mortgage banks as a breed are doomed to extinction, and the reported numbers have done little to convince them otherwise. Investors, however, should focus on what distinguishes the banks rather than what they have in common.
While the challenges the mortgage banks face are broadly similar, the ways they are proposing to meet them are radically different. John Stewart, the 's canny chief executive, says the way to tackle the threat posed by the likes of Egg and Standard Life is by being technologically superior. Information technology, he believes, is a powerful tool in helping understand its customers better, deliver new products, and process them cheaper. It is a long-term strategy that will take time to pay off.
In the meantime, Mr Stewart has made it clear he is open to the idea of a merger. The shares have already fallen pounds 1 from their June high of 429.25p. Robert Fleming is holding to its full-year profits forecast of pounds 537m, putting the stock on a prospective p/e ratio of 14.3. That's demanding compared with Halifax, but the possibility of a bid and the long-term strategy make the stock a buy.
Diving in at the deep end is no excuse for shirking the style stakes
- 1 Why I'm on the brink of burning my Israeli passport
- 2 War is war: Why I stand with Israel
- 3 L'Oreal cuts ties with Belgium supporter Axelle Despiegelaere after hunting trip photographs
- 5 Iraq crisis: How Saudi Arabia helped Isis take over the north of the country
Ian Thorpe gay: Olympic swimmer comes out in Parkinson interview
Death in the Valley of the Dolls: Heroin overdose turns the spotlight on prostitution boom in California's tech industry
Supermoon 2014: When and why will the moon look bigger and brighter this summer?
Woman, 61, jailed for seven years after drink-drive death of cyclist
Gaza-Israel conflict: Pro-Palestinian demonstrators take to streets of London, Paris and New York in wave of protests
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Australia facing international condemnation after turning around Sri Lankans at sea
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
iJobs Money & Business
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...