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Building societies underline the benefits of mutuality

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: &#34The 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&#39s service.

&#34With 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.&#34


Met probes commercial endowments

The FSA is helping the Metropolitan Police with an investigation intocommercial end- owment mortgage misselling.The regulator has confirmed for the first time it is co-operating with theMet&#39s fraud squad which is investigating allegations of investment productmisselling of endowments on commercial financing deals.Both say the investigation is into specific allegations and is not part ofa widespread […]

IFAs challenge Ocwen over massive fees

IFAs are challenging Ocwen to justify why it is paying brokers up to £7,500 commission on its mortgages which all have eight year redemption penalties.The sub-prime lender is under fire for tempting brokers with exorbitant procuration fees and locking borrowers into mortgage rates which can be as high as 5 per cent above base rate […]

Self regulation attacked by Trading Standards

Trading standards officers have unleashed an unprecedented attack on brokers and self regulation following a covert survey which revealed systematic mortgage misselling. The survey of 166 brokers by the Local Authorities Co-ordinating Body on Food and Trading Standards, the national co-ordinator for trading standards, found brokers were either unfamiliar with the Council of Mortgage Lenders […]

Government to allow parallel pension holdings under stakeholder

The Government will announce today that it is prepared to allow people to hold more than one pension plan at a time according to the Financial Times.The plans outlined within the final consultation paper on stakeholder pensions, postpones a final decision on the issue but indicates ministerial backing for the idea.The FT says ministers favour […]

Time for a new approach to asset allocation

Trevor Greetham, RLAM’s head of multi asset, introduces the recentlylaunched RL GMAPs. Asset allocation has become an increasingly difficult challenge for investors and advisers in the years since the financial crisis. Sometimes violent price swings in stock and commodity markets coupled with the collapse in the rate of interest on bonds have made it harder […]


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