Property and services blamed for downturn

A BIG expansion into estate agency and high street financial centres is thought to have compounded the slump in profitability of Bristol & West Building Society.

As well as larger-than-expected provisions against property in the half-year to June, the investment in the estate agency business, Bristol and West Property Services, and the purchase of London-based Hamptons, which specialises in up-market property and has a hundred offices employing 750 staff, is expected to contribute to a fall in profits.

Bristol & West has also invested in turning a number of its key sites into financial services centres. In August this year the society announced it had earmarked pounds 10m for the project.

Bristol & West was the first society to be accepted as a member of the British Retail Consortium, alongside established high street names such as Marks & Spencer and Boots.

The slump in the property market manifested itself in July with Bristol & West Property Services and Hamptons announcing 30 per cent cuts in staff wages. The society has also set aside pounds 51m to cover possible losses from mortgage arrears and repossessions.

In June last year Bristol & West took over the much smaller Cheshunt Building Society after the Hertfordshire society ran into problems with arrears on mortgage payments and falling profits.

Brian Norris, Bristol & West communications director, declined to comment last night. But staff dealing with customers at the society's branches were yesterday given a memo assuring them of the company's financial standing and dismissing theIndependent report as 'speculative'.

The memo warned them to expect further adverse publicity over the weekend.

The document also included specimen questions that might be asked by concerned customers and printed a standard reply to each. A number of queries were received at the society's head office yesterday.