Building societies further underlined the benefits of mutuality in 1998 achieving a net lending performance well ahead of its natural market share according to a survey by financial consultants KPMG.
The annual survey into building society performance reveals a 12 per cent jump in asset growth to £162.4bn from £145bn the previous year.
The report says societies have continued to emphasise the benefits of mutuality by demonstrating better management of their margins than their Plc rivals.
KPMG found the average industry net interest margin for building societies was a full 0.5 per cent lower at 1.55 per cent than the average of its Plc counterparts.
But the survey also revealed there is increasing evidence of polarisation between what it terms as high growth low cost societies and higher cost low growth societies of which the former tend to be larger societies typically run a t lower margins.
KPMG head of building societies unit Richard Gabbertas says: "The higher cost, wider margin societies have two choices. They need to emulate the low cost societies or persuade their members that it is worth paying a higher price for the society's service.
"With a continual stream of new entrants into the market place who are offering competitive products through new distribution channels this will be a tough challenge."