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.
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.
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.
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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