Building society bosses optimistic

Published 30th May 2008

New research from the Building Societies Association (BSA) shows that despite the testing market conditions, the majority of building society bosses are optimistic about the year ahead. An overwhelming 70% of bosses said they felt optimistic about the year ahead.

A number of CEOs told the BSA that despite current economic challenges, the quality of their mortgage books mean that they are well positioned to meet any potential downturn. Others are maintaining prudent lending policies and pursuing even more risk pricing.

Identifying their society as a partner consumers can trust is very high on the majority of respondent’s list of priorities for 2008. Enhancing societies' relationship with their members is being done in a number of ways including improving service levels, increasing product ranges, better member communication and working with other providers, according to the survey.

Unsurprisingly, the biggest issue for building society chief executives is the credit crunch and the prospect of raising funds from retail and whole-sale markets as the turbulence continues.

Building societies are funded predominantly by retail deposits, rather than in the wholesale markets, but the difficulty other lenders are experiencing in accessing wholesale market funds is bidding up the cost of attracting retail savings for all financial service institutions.

Commenting on the survey, Adrian Coles, Director General of the BSA said: “The last few months have been uncertain times for consumers and for anyone in the financial services sector. Building societies have been able to weather the storm partly because they are not as reliant as banks on the international money markets, nor have they been exposed to investments linked to the US sub-prime market to the same extent as other institutions.”

Source: ' What Mortgage '

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