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47-678: West Bromwich Building Society , commonly referred to as the West Brom or West Brom Building Society , is the eighth largest building society in the UK , with its headquarters in West Bromwich , England . It is a member of the Building Societies Association . The Society was formed in 1849 and remained a very local society for over 100 years. In 2024, the West Brom celebrated its 175th anniversary, making it one of

94-399: A boat builder, boot maker, blacksmith, glass cutter. One of these was appointed the first Secretary, James Sharp, a grocer. A couple of years later, hardly any of the original names were mentioned again and the trustees were drawn more from the middle class. The only figure of note in those early years was Reuben Farley , a prominent industrialist and later the first Mayor of West Bromwich. He

141-426: A conflict of interest between borrowers and savers. It was the task of the movement to reconcile that conflict of interest so as to enable savers to conclude that their interests and those of borrowers were to some extent complementary rather than conflictive. Conflict of interest between savers and borrowers was never fully reconciled in the building societies but upon deregulation that reconciliation became something of

188-538: A conversion, its managers derive more value from a conversion but do not suffer much loss of perks than if the bank were small. Their benefit is in the right to purchase the new stock, which are valuable because the new issues are consistently underpriced [referring to USA mutual bank conversions]. Moreover, by no means are all mutual managers incompetent, and conversions allows the bank to expand more easily and to grant executive stock options that are valuable to skilled managers". Instead of deploying their margin advantage as

235-557: A defence of mutuality, around 1980 building societies began setting mortgage rates with reference to market clearing levels. In sum they began behaving more like banks, seeking to maximise profit instead of the advantages of a mutual organisation. Thus, according to the Bank of England's Boxall & Gallagher (1997) : "... there was virtually no difference between banks and building society 'listed' interest rates for home finance mortgage lending between 1984 and 1997. This behaviour resulted in

282-619: A demutualisation and a merger in 2011, and four further mergers 2013–2018 which resulted in there being only one building society headquartered respectively in Scotland and Northern Ireland. Since then, the only merger has been in 2023, when the Manchester society merged with the Newcastle society. In the 1980s, changes to British banking laws allowed building societies to offer banking services equivalent to normal banks. The management of

329-701: A divide exists between building societies that operate in New Zealand, on the one hand, and those that (although formally registered in New Zealand) operate offshore: Building societies' registration details and filed documents are available in the Register of Building Societies held at the New Zealand Companies Office. Over the years, a number of building societies were established. Ketley%27s Building Society The society

376-448: A lost cause. The management of building societies apparently could expend considerable time and resources (which belonged the organisation) planning their effective capture—of as much of the assets as they could. If so, this is arguably insider dealing on a grand scale with the benefit of inside specialist knowledge of the business and resources of the firm not shared with outsiders like politicians and members (and, perhaps, regulators). Once

423-503: A member with £50,000 in each of Nationwide, Cheshire and Derbyshire at the time of the respective mergers would retain £150,000 of FSCS protection for their funds in the merged Nationwide. On 31 December 2010 the general FSCS limit for retail deposits was increased to £85,000 for banks and building societies and the transitional arrangements in respect of building society mergers came to an end. As of February 2024 , there are 42 independent building societies, all of which are members of

470-413: A number of societies still felt that they were unable to compete with the banks, and a new Building Societies Act was passed in 1986 in response to their concerns. This permitted societies to ' demutualise '. If more than 75% of members voted in favour, the building society would then become a limited company like any other. Members' mutual rights were exchanged for shares in this new company. A number of

517-749: A one-member, one-vote basis. Building societies often provide other retail banking services, such as current accounts, credit cards and personal loans. The term "building society" first arose in the 19th century in Great Britain from cooperative savings groups. In the United Kingdom, building societies compete with banks for most consumer banking services, especially mortgage lending and savings accounts , and regulations permit up to half of their lending to be funded by debt to non-members, allowing societies to access wholesale bond and money markets to fund mortgages. The world's largest building society

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564-478: A permanent society. Terminating loans were still available and used inside the permanent businesses by staff up until the 1980s because their existence was not widely known after the early 1960s. Because of strict regulations on banks, building societies flourished until the deregulation of the Australian financial industry in the 1980s. Eventually many of the smaller building societies disappeared, while some of

611-454: A rather more direct and cynical conclusion: By adopting a policy of building up reserves by maintaining an excess margin, building societies simultaneously allowed banks to compete and may have undermined the long run viability of mutuality. A more cynical approach is that some societies may have adopted an excess-margin strategy simply to enhance their value for conversion. Some of these managements ended up in dispute with their own members. Of

658-411: A return on assets for building societies which was at least as high as Plc banks and, in the absence of distribution, led to rapid accumulation of reserves". As Boxall & Gallagher (1997) also observe: "... accumulation of reserves in the early-1990s, beyond regulatory and future growth requirements, is difficult to reconcile with conventional theories of mutual behaviour". Llewellyn (1996) draws

705-485: A rolling basis, continually taking in new members as earlier ones completed purchases, such as Leek Building Society . The main legislative framework for the building society was the Building Societies Act 1874 ( 37 & 38 Vict. c. 42), with subsequent amending legislation in 1894, 1939 (see Coney Hall ), and 1960. In their heyday, there were hundreds of building societies: just about every town in

752-455: Is Britain's Nationwide Building Society . In Australia, building societies also compete with retail banks and offer the full range of banking services to consumers. Building societies as an institution began in late-18th century Birmingham – a town which was undergoing rapid economic and physical expansion driven by a multiplicity of small metalworking firms, whose many highly skilled and prosperous owners readily invested in property. Many of

799-507: Is that Australian building societies are required to incorporate as limited companies . Current building societies are The Building Societies Act of 1962 allowed for the registration of building societies in Eswatini. For a long time the country only had one building society. A second was registered in late 2019. The Republic of Ireland had around 40 building societies at the mid-20th century peak. Many of these were very small and, as

846-441: Is those who joined societies by lodging minimum amounts of £100 or so in the hope of profiting from a distribution of surplus after demutualisation. The deregulating Building Societies Act 1986 contained an anti-carpetbagger provision in the form of a two-year rule. This prescribed a qualifying period of two years before savers could participate in a residual claim. But, before the 1989 Abbey National Building Society demutualisation,

893-437: The Building Societies Association . Ten building societies of the United Kingdom demutualised between 1989 and 2000, either becoming a bank or being acquired by a larger bank. By 2008, every building society that floated on the stock market in the wave of demutualisations of the 1980s and 1990s had either been sold to a conventional bank, or been nationalised . The following is an incomplete list of building societies in

940-582: The English Midlands was established in Leeds in 1785. Most of the original societies were fully terminating , where they would be dissolved when all members had a house: the last of them, First Salisbury and District Perfect Thrift Building Society , was wound up in March 1980. In the 1830s and 1840s a new development took place with the permanent building society , where the society continued on

987-592: The Financial Services Compensation Scheme (FSCS), but Nationwide and Yorkshire building societies negotiated a temporary change to the terms of the FSCS to protect members of the societies they acquired in late 2008/early 2009. The amended terms allowed former members of multiple societies which merge into one to maintain multiple entitlements to FSCS protection until 30 September 2009 (later extended to 30 December 2010), so (for example)

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1034-594: The Golden Cross inn, in 1775. Members of Ketley's society paid a monthly subscription to a central pool of funds which was used to finance the building of houses for members, which in turn acted as collateral to attract further funding to the society, enabling further construction. By 1781 three more societies had been established in Birmingham, with a fourth in the nearby town of Dudley ; and 19 more formed in Birmingham between 1782 and 1795. The first outside

1081-464: The Irish commercial banks began to originate residential mortgages, the small building societies ceased to be competitive. Most merged or dissolved or, in the case of First Active plc , converted into conventional banks. The last remaining building societies, EBS Building Society and Irish Nationwide Building Society , demutualised and were transferred or acquired into Bank subsidiaries in 2011 following

1128-558: The Registrar of Building Societies under the Building Societies Act 1965. Registration as a building society is merely a process of establishing the entity as a corporation. It is largely a formality, and easily achieved, as the capital requirement is minimal (20 members must be issued shares of not less than NZ$ 1,000 each, for a total minimum foundation share capital of NZ$ 200,000). As regards prudential supervision,

1175-455: The UK are members of the Building Societies Association . At the start of 2008, there were 59 building societies in the UK, with total assets exceeding £360 billion. The number of societies in the UK fell by four during 2008 due to a series of mergers brought about, to a large extent, by the consequences of the financial crisis of 2007–2008 . There were three further mergers in each of 2009 and 2010,

1222-470: The United Kingdom that no longer exist independently, since they either merged with or were taken over by other organisations. They may still have an active presence on the high street (or online) as a trading name or as a distinct brand. This is typically because brands will often build up specific reputations and attract certain clientele, and this can continue to be marketed successfully. In Australia, building societies evolved along British lines. Following

1269-479: The United Kingdom, Australia and New Zealand, and formerly in Ireland and several Commonwealth countries, including South Africa as mutual banks. They are similar to credit unions , but rather than promoting thrift and offering unsecured and business loans, the purpose of a building society is to provide home mortgages to members. Borrowers and depositors are society members, setting policy and appointing directors on

1316-427: The balance and taken account of in formulation of policy. They were a nuisance to be dealt with by the costly use of public relations advisers and legal processes. In the end, after a number of large demutualisations, and pressure from carpetbaggers moving from one building society to another to cream off the windfalls, most of the societies whose management wished to keep them mutual modified their rules of membership in

1363-463: The country had a building society named after that town. Over succeeding decades the number of societies has decreased, as various societies merged to form larger ones, often renaming in the process, and other societies opted for demutualisation followed by – in the great majority of cases – eventual takeover by a listed bank. Most of the existing larger building societies are the result of the mergers of many smaller societies. All building societies in

1410-450: The courts found against the two-year rule after legal action brought by Abbey National itself to circumvent the intent of the legislators. After this the legislation did prevent a cash distribution to members of less than two years standing, but the same result was obtained by permitting the issue of 'free' shares in the acquiring plc, saleable for cash. The Thatcher Conservative government declined to introduce amending legislation to make good

1457-494: The defect in the 'two-year rule'. Building societies, like mutual life insurers, arose as people clubbed together to address a common need interest; in the case of the building societies, this was housing and members were originally both savers and borrowers. But it very quickly became clear that 'outsider' savers were needed whose motive was profit through interest on deposits. Thus permanent building societies quickly became mortgage banks and in such institutions there always existed

West Bromwich Building Society - Misplaced Pages Continue

1504-480: The early building societies were based in taverns or coffeehouses , which had become the focus for a network of clubs and societies for co-operation and the exchange of ideas among Birmingham's highly active citizenry as part of the movement known as the Midlands Enlightenment . The first building society to be established was Ketley's Building Society , founded by Richard Ketley, the landlord of

1551-1245: The effects of the Irish financial crisis . Leeds Building Society Ireland and Nationwide UK (Ireland) were Irish branches of building societies based in the United Kingdom; both have since ceased all Irish operations. Irish Industrial Building Society (1969–1975) Irish Nationwide Building Society (1975 – Feb 2011) loan book Anglo Irish Bank (February 2011–June 2011) Irish Bank Resolution Corporation (July 2011–February 2013 ) EBS Building Society (1991–2011) Irish Permanent Benefit Building Society (1888–1940) Irish Permanent Building Society (1940–1994) Permanent TSB Group Holdings plc (1999–) merged with TSB Bank, 2001 Permanent TSB Group Holdings plc Irish Civil Service and General (Permanent Benefit) Building Society (1867–1874) Irish Civil Service (Permanent) Building Society (1874–1969) Irish Civil Service Building Society (1969–1984) First National Building Society (1960–1998) acquired by Ulster Bank 2004 and retired in 2009 In Jamaica , three building societies compete with commercial banks and credit unions for most consumer financial services: In New Zealand , building societies are registered with

1598-448: The end of World War II , the terminating model was revived to fund returning servicemen's need for new houses. Hundreds were created with government seed capital, whereby the capital was returned to the government and the terminating societies retained the interest accumulated. Once all the seed funds were loaned, each terminating society could reapply for more seed capital to the point where they could re-lend their own funds and thus became

1645-419: The end of mutuality brought joint stock company (plc) style remuneration committee pay standards and share options. Share options for management of converting societies appear to be a powerful factor in management calculation. Rasmusen (1988) refers to this in the following terms: " ... perks do not rise in proportion to [mutual] bank size. If a mutual is large, or is expected to grow if it can raise capital by

1692-555: The first major conversion of the Abbey in 1989, Kay (1991) observed: [T]he paradox of the Abbey members who campaigned against flotation [conversion to a shareholder-owned bank] of their building society. They were fighting to preserve a degree of accountability to the membership which the management of the Society patently did not feel. For incumbent management, the contrary views of some of their members were not matters to be weighed in

1739-522: The franchise was a common theme of the early building societies and reflected the aims of the Freehold Land Societies . Lending was only for houses and not for building developers or commercial property. Building society A building society is a financial institution owned by its members as a mutual organization , which offers banking and related financial services , especially savings and mortgage lending . They exist in

1786-641: The larger societies made such proposals to their members and all were accepted. Some listed on the London Stock Exchange , while others were acquired by larger financial groups. The process began with the demutualisation of the Abbey National Building Society in 1989. Then, from 1995 to late 1999, eight societies demutualised accounting for two-thirds of building societies assets as at 1994. Five of these societies became joint stock banks (plc), one merged with another and

1833-514: The largest (such as Advance and St George ) attained the status of banks. More recent conversions have included Heritage Bank which converted from building society to bank in 2011, Hume in 2014, while Wide Bay Building Society became Auswide Bank and IMB followed suit in 2015, and Greater Building Society became Greater Bank in 2016. Building societies converting to banks are no longer required to demutualise. A particular difference between Australian building societies and those elsewhere,

1880-411: The late 1990s. The method usually adopted were membership rules to ensure that anyone newly joining a society would, for the first few years, be unable to get any profit out of a demutualisation. With the chance of a quick profit removed, the wave of demutualisations came to an end in 2000. One academic study ( Heffernan 2003 ) found that demutualised societies' pricing behaviour on deposits and mortgages

1927-412: The members would have land purchased and a home constructed. With property in place as security , further finance could be attracted to the society through loans at a reasonable cost. The only documentary records of the society are three advertisements offering shares in the society that appeared in local newspapers in 1778 and 1779. The third of these advertisements claimed that £80 had been advanced on

West Bromwich Building Society - Misplaced Pages Continue

1974-682: The oldest building societies still in existence today. The meeting to propose a building society for West Bromwich was held on 23 April 1849 at the Paradise Street Methodist Meeting rooms. It is believed that the West Bromwich Permanent Building Society formally opened for business later that year. There were 20 men at that first meeting, all steeped in Methodism , and comprised local tradesmen and skilled craftsmen -retailers,

2021-438: The opportunity to claim was presented by management the savers in particular could be relied upon to seize it. There were sufficient hard-up borrowers to take the inducement offered them by management (in spite of few simple sums sufficing to demonstrate that they were probably going to end up effectively paying back the inducement). ( Tayler 2003 ) Management promoting demutualisation also thereby met managerial objectives because

2068-422: The other four were taken over by plcs (in two cases after the mutual had previously converted to a plc). As Tayler (2003) mentions, demutualisation moves succeeded immediately because neither Conservative nor Labour party UK governments created a framework which put obstacles in the way of demutualisation. Political acquiescence in demutualisation was clearest in the case of the position on ' carpetbaggers ', that

2115-475: Was formed by Richard Ketley, the landlord at the Golden Cross inn at 60 Snow Hill. Taverns and coffeehouses were important meeting places in eighteenth century Birmingham and frequently formed the focal point for clubs and societies. Ketley's Building Society existed to pool the resources of its members, who would contribute a specified amount into a shared building fund and draw lots to select which of

2162-712: Was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. The Building Societies (Funding) and Mutual Societies (Transfers) Act 2007 , known as the Butterfill Act, was passed in 2007 giving building societies greater powers to merge with other companies. These powers have been used by the Britannia in 2009 and Kent Reliance in 2011 leading to their demutualisation. Prior to 31 December 2010, deposits with building societies of up to £50,000 per individual, per institution, were normally protected by

2209-409: Was not one of the original 20 but he signed the earliest remaining accounts (1851) and from 1858 to his retirement in 1897 signed the accounts as president. The aims of the Society were no different to those of other early societies. Intentions to enable the working man to be his own landlord and "enjoy the privilege of exercising the franchise" were expressed in the 1852 annual report. The extension of

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