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Societies’ profits slashed by FSCS bank levies

Building societies have seen their profits for 2008 slashed due to “disproportionate” FSCS levies for bank failures.

Skipton says its profits have been halved due to a £16.3m FSCS levy and Norwich & Peterborough profits were also halved after a £5.5m levy. Yorkshire faces a levy of £14.7m compared with profits of £8.3m for the year.

Britannia was hit with a levy of nearly £20m when its profits were £23.8m, Welsh mutual Principality saw a third of its profits go after a £5.2m charge and Leeds took a hit of £9.7m, which cut its profits by a third.

Skipton BS chief executive David Cutter says: “We acknowledge the importance of a national safety net for savers but we believe it is unjust that the building society sector is bearing a disproportionate cost for the troubles of some banks which had far riskier models.”

Building Societies Association mortgage policy adviser Neil Johnson says: “Building societies have proved that they are prudent organisations that do not take risk. We are lobbying on their behalf to try to change the rules concerning societies and compensation levies.”

Over 150 MPs have signed an early day motion calling for a Parliamentary debate on the FSCS burden on societies.

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