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Wednesday, January 6, 1999 Published at 06:52 GMT

Business: The Company File

Building societies hold crisis meeting

Are building societies an endangered species?

Leading building societies are holding a crisis meeting on Wednesday in an attempt to head off attempts by members to force them to convert to banks.

The societies are coming under increasing pressure from so-called carpetbaggers who are chasing windfall payments that will occur if the financial institutions float on the stock market.

The Building Societies Association plans to discuss ways of preventing rebel members from forcing a conversion.

Simon Gompertz: building societies at panic stations
The meeting comes just a day after the country's second biggest building society, the Bradford and Bingley, was forced by some of its members to call a vote on whether it should convert to a bank.

The Bradford and Bingley has halted new account openings to try and prevent carpetbaggers forcing the society to lose its mutual status. Analysts estimate than two million members of Bradford and Bingley could receive a windfall of around £1,000 if it does convert to a bank.

Under attack

Jeremy Batstone: building societies haven't made good banks
Seven other leading societies are also under attack from Michael Harden, the former butler who has become a self styled carpetbagger. These include the Britannia, Chelsea, Leeds & Holbeck, Portman, Skipton and Yorkshire building societies.

However another society under threat, the Coventry Building Society, has thrown out demands that it should convert to a bank and rejected attempts by Michael Harden to get elected to its board.

Big winners

A wave of building societies have converted into banks since Abbey National first took the plunge in 1986. In 1997 £35bn was paid out to members after the Halifax, the Alliance & Leicester and Woolwich, among others, floated on the stock market.

The Nationwide, the largest remaining building society, narrowly avoided conversion after winning a recent vote from shareholders by a very narrow majority.

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