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Mutuality still viable, claims BSC

There is no compelling reason for building societies to convert to plcs and they are generally financially healthy, says the latest report from the Building Societies Commission.

It claims the competitive performance of societies over the last four years has shown that mutuality remains viable.

The BSC says: “We believe they can continue to thrive and serve their members well.”

But it warns that societies should not rest on their laurels. The report says: “Societies will need to run hard to stay competitive, faced with rising costs, pressures and competition from direct and internet providers.”

Societies could do more to achieve economies of scale through cooperation and joint ventures within the sector, according to the report. But it says: “Arrears and provisions have continued to decline and societies remain strongly capitalised with a sectoral average solvency of 12.6 per cent.”

FSA press officer Robin Gordon Walker says: “We are pleased with the findings.”

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