The BBC reporter with the apparent ability to scoop the financial story of the day appears to have done it again. Robert Peston is suggesting that a rescue package is being put together for the ailing West Bromwich Building Society.
West Bromwich is listed as the 8th largest society based upon assets at the end of May 2009. As in the football world, West Bromwich have been attempting to break into the premier league of Building Societies for some time, but the difference between the top and bottom players is enormous. The vast majority of societies are positively gnat-like when compared against the mighty Nationwide, who with over £179,000m of assets are nearly 5 times the size of nearest rival Britannia – who recently announced a merger with the Co-operative Bank. Nationwide’s assets are more than the total of all of the other Building Societies put together, according to the latest data from the BSA. Indeed, as if to prove the 20/80 Principle (Pareto’s law of imbalance) the top 20% hold 90% of assets owned by Building Societies (and the top 20% of the top 20% hold 70% of the top 20%).
The strong get stronger in tough times and over the last year, Nationwide have acquired The Derbyshire, Cheshire and Dunfermline. So perhaps not only are they the favourite society of the nation, but also the Government who are presumably going a little cap in hand to offer preferential terms to help ailing societies. There are currently 53 Building Societies listed with the Building Society Association.
Building Societies make up about 21% of the total savings market, Banks being the obvious dominant players with 70% and NS&I (National Savings) making up 9% of the market worth a mere £1,101,073 million by the end of April this year.
Thursday, 11 June 2009
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