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Tuesday, January 5, 1999 Published at 19:20 GMT

Business: Your Money

Bradford & Bingley battles carpetbaggers

The building society war with carpetbaggers hots up

Bradford and Bingley Building Society has closed its doors to new savings account customers and announced a vote on whether to convert to a bank will be held in April.

The decision to halt the opening of new savings accounts is a defence against and influx pro-conversion 'carpetbaggers' looking for windfalls in the wake of a new campaign to force the building society to convert.

The move comes on the day Coventry Building Society threw out demands that it should convert to a bank and rejected attempts by leading carpetbagger Michael Harden to get elected to its board.

[ image: Chris Rodrigues: '£100m mutuality benefit']
Chris Rodrigues: '£100m mutuality benefit'
Bradford and Bingley, 2.5m members strong, has said it will oppose the latest conversion move, launched by member Stephen Major, a quantity surveyor from Co. Antrim, last week.

Society chairman Lindsay Mackinlay confirmed that a Members Conversion Resolution received the required number of nominations for the issue to go to a vote at the company's annual general meeting on April 26.

Mr Mackinlay said: "We are determined to fight for our future as a mutual - the board is unanimous in its belief that the best interests of both today's' and tomorrow's members are served through Bradford & Bingley remaining a mutual."

Chief executive Chris Rodrigues tells members on the society's website that members were collectively £100m better off under mutual status in 1998.

A vote in support of conversion would not automatically lead to the change, the society said, with the issue to then be considered by the board.

Ongoing pressure

Smaller building societies continue to face pressure to convert from mutual to company status after a number of societies have moved over in recent years. Conversion brings windfall gains to society members who have the right to take free shares under the new sharemarket-listed company structure.

Halifax and Abbey National have taken the step while members of the UK's biggest building society, Nationwide, rejected a conversion proposal by a narrow margin of 50.2% to 49.8% last July.

Like Nationwide last year, Bradford and Bingley argues that converting to a bank would result in more expensive mortgages and less savings returns for members than those currently available from mutual building societies.

The 1.25m-member Portman Building Society last week halted new savings accounts following speculation that Allied Irish Banks would mount a takeover bid resulted in a rush of speculators opening new accounts.

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