Call to curb carpetbaggers

Article Abstract:

The success of Nationwide in rejecting a challenge to its mutual status for the second year running has led to renewed pressure from the All Party Building Societies Group, which represents 112 members of parliament (MPs) and Peers, to change building society election rules. Under current rules, Nationwide is still vulnerable from another challenge to change its board members in a year's time, which the Building Societies Association (BSA) obstructs its strategy to provide a competitive service. Meanwhile, Nationwide is planning to reduce the difference between interest rates offered to savers and borrowers to 1.15% within two years from 1.49% at present. This compares to the 2.48% margin at Halifax.

Comment:

Will not change its mutual status for the second year running

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Nationwide carpetbaggers swept aside

Article Abstract:

Two members of the Nationwide building society who stood for election to its board and wanted it to shed its mutual status have been comprehensively defeated in a ballot, the result of which is due to be announced on 22 July 1998. Neither has any financial experience which is probably the major reason for their rejection. However, in a separate ballot, society members have also voted on the issue of converting the building society to a bank and this is likely to be rejected by a much narrower margin. Even if the society were to win by the narrowest of margins, City sources have discounted rumours that it would be forced to seek a trade buyer such as Lloyds Bank.

Comment:

Two members who stood for election to its board & wanted to shed its mutual status were comprehensively defeated in a ballot

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Another option for carpetbaggers

Article Abstract:

Demutualizations among United Kingdom building societies have led to windfall bonuses of cash or stocks for members. There is speculation that more demutualizations could occur, and investors could consider permanent interest bearing stocks (Pibs) as a speculative investment to take advantage of any possible windfalls. Capital gains tax is not levied on Pibs, but they cannot be used in personal equity plans. They provide an income stream and return of capital is not guaranteed.

Personal finance, Investment analysis, Securities analysis

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