The mutual’s chairman Trevor Harrison and deputy chairman Jean Wood also retired from their positions earlier this summer.
Chief executive Richard Hornbrook announced his departure earlier in August after 28 years at the building society, while finance director Andrew Parsons gave notice of his resignation as the mutual’s interim results were published today.
Chelsea posted a £53m impairment on loans as a result of buy-to-let mortgage fraud which primarily took place on lending between 2006 and 2008, as well as to account for mortgages in arrears and the drop in property values.
The building society says it will not rule out a merger with another mutual although it says it is too early for new chief executive Stuart Bernau, who joined this month from Nationwide, to have reviewed the options for the firm.
Chelsea insists the departure of Hornbrook was unrelated to the losses, which compared to a profit of £23m during the first half of 2008.
In March, Chelsea posted £29.2m losses due mainly to £55m exposure to the Icelandic banking collapse, but the mutual says it has now exited its Kaupthing Singer & Friedlander position with a £9m gain compared to its provision.
Chelsea’s new lending was £242m while retail savings balances were up £498m to £10bn.
Bernau says: “The society has been through a difficult period and reporting a loss in the first half of the year is disappointing.
“However, the underlying performance is strong even though we have had to make provision for impairment and fraud losses.”
He says the society’s lending is now fully covered by retail deposits, reducing its reliance on wholesale funding.
Chelsea says the £41m figure is a provision for possible losses on fraud following a review of its loan book, but it hopes the actual losses will not be on this scale.
He says any loans which look like they may be fraudulent, will be investigated by a fraud team within the building society.
These might be buy-to-let loans falsely inflated through collusion among mortgage professionals or self-cert loans where the borrower’s income has been inflated.
The spokesman says: “Many of the fraudulent loans we have provisioned
against, mainly self-cert loans, are still paying, and we will make sure
they continue to pay out. Those that are not will be investigated and we
hope to recoup any losses.”