Mike Lazenby, chief executive of Kent Reliance Building Society, claimed that a ‘super mutual’ was needed for the building society model to be stronger overall. He claimed that building societies should be merging their back offices for strength and in order for them to compete with banks to move forward.
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Lazenby explained: “Put together, building societies are financially very small but we are not a vacuum and we need to move ahead. If a ‘super-mutual’ could be created as an umbrella then it could do the services and support while local building societies can keep their local branches and offices. Skipton is a good example of a company that does mortgage advice for other firms.”
He admitted that chief executives would be concerned by the loss of power and status, but insisted that building societies were there to serve their members, and that if there was a better way of doing business then moves should be taken to help members.
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Lazenby said: “The time is right for a ‘super-mutual’ in the building society industry rather than 60 smaller societies as they are much weaker independently. People generally prefer to deal with building societies than banks and we do a lot that they don’t do. The ‘super-mutual’ is a possibility but no one in the market is actually talking about it.”
Adrian Coles, director-general of the Building Societies Association (BSA), commented: “The BSA is very keen on building societies working together to save costs and there are already organisations such as Mutual One in the market that are broadly similar to what Lazenby is describing. It is a broad concept and we are very much in favour of this idea.”
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