The Nationwide must keep the mutual faith
Sunday 07 June 1998
Enter the Nationwide BS, which announces its annual results on Wednesday. The figures seem certain to be staggeringly good. We had a hint last week when the society abolished pounds 12m-worth of service fees for its customers. An internet-access service is coming soon. And Nationwide head office in Swindon is trialling a cash machine which doesn't use PIN numbers: customers are identified by the unique pattern of their eyes. Things are moving fast, and the Nationwide is about as responsive and dynamic as it's possible to be in a world of suits.
All of that counts for nothing in the face of next month's challenge to the Nationwide's mutual status. (A mutual society is owned by its customers, and there are no profits as such - the surplus goes into reserves or is used to benefit savers and borrowers.) Five million members will be eligible to vote on a resolution which would force the society to take steps to convert to PLC status. If this gets passed, members would give up their stakes in the society and get a one-off windfall of about pounds 2,000 each in return.
In the face of all this, Nationwide's chief executive Brian Davis will need the strength of a Jedi knight. He fought off a challenge last year, but collective greed may well spell the end for the Nationwide this summer. Which would give all the lurking high-street Jabbas a chance to spend a few of their spare millions on outbidding each other to buy the society.
If all this happens, it will be terrible timing, because the Government has started acting like a backup force drafted in to help defend the beleaguered building society movement. The Government wants mutual societies to be its AWPs - Approved Welfare Providers. Get used to AWPs: they could be the biggest thing to happen on the welfare and pensions front for 50 years. It's the vision of welfare reform minister Frank Field, and if the plans go forward, AWPs will provide welfare benefits, insurance and stakeholder pensions to millions of people.
If this happens, then building societies (and friendly societies) have found themselves a secure future. And it looks like the banks and non- mutual life firms won't get a look in, because they aren't run for the benefit of their members.
Anyone who is a member of a building society, even those who stuck the money in there in the hope of making a quick windfall profit, has had plenty of time to see the new banks in action. Or inaction. Was it worth it? Yes, probably, for people who enjoyed fancy foreign holidays they could otherwise never have afforded. And yes, certainly, for the fat cat directors of the ex-societies. But for the rest of us, with mortgages and savings and continuing financial commitments? No, it definitely was not.
Anyone who cares about the way we do business in this country and wants to see a revolution in favour of the customer, should keep faith with the building society movement. Big changes are afoot and the giant Nationwide must stay mutual to give the sector some clout.
Culinary experts in The Netherlands thought it was 'fresh' and 'tasty'
Of all the computers Apple has ever made there’s only one that Steve Jobs had to sell his car to finance
Marvel has released first teaser trailer week early after it leaked online
- 1 As an ex prostitute, I urge all the political parties to commit to the Sex Buyer Law
- 2 Nokia no more: Microsoft drops once-ubiquitous mobile name – in favour of its Lumia brand
- 3 Renee Zellweger on plastic surgery: 'I'm living a fulfilling life and I'm thrilled that perhaps it shows'
- 4 Australian café owner sparks debate after saying 'No' to having unruly children on premises
- 5 Couple die within 28 hours of each other after being married for 73 years
Renee Zellweger on plastic surgery: 'I'm living a fulfilling life and I'm thrilled that perhaps it shows'
Isis releases first video showing the stoning of woman accused of committing adultery as her father shouts 'don't call me Dad'
Banksy not arrested: Internet duped by fake report claiming artist's identity revealed
Diwali: What is the festival of lights and how is it celebrated around the world?
Nelson Bunker Hunt dead: Former world’s richest man dies in 'modest circumstances' in US after losing his fortune
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
iJobs Money & Business
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...