Bumper Bonuses at Building Societies
December 2007 – Christmas will have come early for building society directors this year. Following the collapse of Northern Rock people have been making record deposits in building societies. Directors will be taking bonuses home by the truck load without having to do anything special to earn them. Watch out for a National Lottery type bonus for the chief executive of Nationwide BS where profits have also benefited from the takeover of the Portman BS.
Nationwide Building Society ISAs
September 2007 – Nationwide BS has continued to have administration problems, particularly with ISA accounts, that have been compounded by the takeover of Portman BS.
Click here for Thisismoney report.
Portman & Nationwide Building Societies
August 2007 – The FSA Decision Document for the takeover of the Portman BS by the Nationwise BS is available on line and makes interesting reading.
Click here to view full document.
Poor Savings Accounts
July 2007 – Research carried out by Investec Private Bank in conjunction with Moneyfacts shows the extent to which building societies and banks are failing to increase their interest rates on savings accounts in line with the official cost of borrowing.
In 2002 nine out of eleven “best buy” savings accounts were paying more than the Bank of England base rate at 4% and the other two matched it.
In 2007 only three of the “best buy” savings accounts matched or bettered the 1.25 point rise in the base rate since 2002 and six had increased their rates by less than 1 percentage point. The average increase for all accounts was only 0.92 points. This is despite a Banking Code that societies are supposed to conform with to treat members fairly.
Nationwide Building Society – “Mutuality is Alright for Some”
June 2007 – Paul Farrow reports in the Daily Telegraph on the large pay packages that Nationwide BS directors have awarded themselves despite poor performance and the slowness in responding to the security lapse resulting in a £980,000 fine by the FSA.
Click here for Telegraph report
Fat Cats First and Members Last at Nationwide Building Society
June 2007 – The Nationwide BS AGM is due to be held in Birmingham once again next month. The number of members attending the last AGM was about 25% of the number that attend AGMs held in London and members were almost outnumbered by staff.
The FSA fined the Nationwide BS almost £1,000,000 for lack of security and delay in taking action to protect members. Needless to say there is no mention of this in the AGM notifications sent out to all members. Nevertheless the directors have awarded themselves another record round of fat cat bonuses and leaving packages while members have had to bear the cost of the fine.
Former Chief Executive Philip Williamson departed with a staggering £3.2m of members money – a 100% increase on the previous year.
Total Boardroom pay rose from £4.4m in 2005 to £8.6m in 2006!
Click here for Thiismoney comments
Portman Building Society AGM
April 2007 – 93% of Portman BS members voted in favour of windfall payments for a Nationwide BS takeover which will result in branch closures and job losses. Things are different for Robert Sharpe the Chief Executive. He is to receive a fat cat pay and pension package for his efforts but none of this has been revealed to members.
Our Comment – No surprises there at all. Click here for Thisimoney report.
Fat Cat Pay Rises
April 2007 – The Financial Mail reports on the double digit pay increases and large pension pots that building society directors have awarded themselves. John Whayman of Ipswich BS and Martin Ritchley of Coventry BS (motto TLC not PLC) departing with pensions that most of their members could only dream about. The report speaks of some members who have written to their societies to complain but have effectively been told tough. Like all good “mutuals” the directors put members first Click here for full report.
Our Comment – The Nationwide will be the one to watch to see just how the bonuses will suffer (not) following the costs that members have had to bear for Nationwide’s security lapses – see below.
Portman & Nationwide Building Societies
March 2007 – In the Portman BS “Merger Booklet” for members the chairman, Tudor John, states “If building societies are to continue to compete successfully with the retail banks, the Board believes they need to enjoy comparable economies of scale and offer attractive and competitive product pricing and services to members”.
Our Comment – This statement means that Tudor John sees no future for the industry in particular the small societies unless all societies combine. However the directors will be doing quite well out of the takeover.
A spokesman for Portman management commenting on the small “windfall” said: “The handouts are about compensating Portman members for the transfer to Nationwide” Presumably this was not Tudor John as he claimed that joining the Nationwide would bring benefits of membership.
Go to www.portmanprotest.com
Click here for newspaper comments
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Portman & NationwideBuilding Societies
March 2007 – It is reported that the planned takeover of Portman BS by Nationwide BS will result in the closure of 88 branch offices making 500 hundred employees redundant. All this for a paltry financial bribe for Portman members.
Our Comment – Nationwide is already the largest building society yet its performance is often inferior to smaller societies. Making it bigger would not seem to be the answer to its problems.
Nationwide Building Society
March 2007 – The Nationwide BS is reported to have made a U-turn on its bullying tactics against members following investigations by the Financial Ombudsman Service. See Guardian report – “Nationwide Backs Down on Account Closures”
Nationwide Building Society
March 2007 – Tne Nationwide BS is accused of using bullying tactics against members who have successfully claimed back excessive charges.
See Guardian report – “Moan and We’ll Close You Down”
Our Comment – Current Nationwide slogan – “the building society that is “Proud to be Different”. Perhaps this should be “The building society that is actually a bank”.
Ipswich Building Society
March 2007 – Ipswich directors pay increased by 62% last year from £294,000 to £471,000. Pay for the chief executive includes a pension contribution of £149,000. The chief executive retires at the end of the month.
Our Comment – Slightly inflation busting but the members of this society were feeling generous.
Nationwide Building Society
February 2007 – Graham Beale is to take over as chief executive of the Nationwide BS in April. Mr Beale likes the fact that he has no shareholder pressure to worry him but he states that he is in favour of charging for current accounts if banks lead the way!
Our Comment – The current Nationwide slogan is “the building society that likes to be different”. Meanwhile Barclays Bank has vowed to keep free banking on current accounts. We are concerned about just how different Mr Beale wants Nationwide to be.
Nationwide Building Society
February 2007 – The FSA has fined the Nationwide BS £980,000 for lack of security following the loss of a laptop computer containing personal and confidential information on its members and for its slowness in taking action following the loss. However Nationwide management maintains that the lost information does not pose a threat to members but refuses to say what information they lost. The FSA provided a 10% discount for prompt payment of the fine. The society subsequently sent leaflets to its members advising them on security measures!
Philip Williamson the Nationwide Chief Executive said “No customer (note: not member) has lost any money as a result of this incident but we wish to apologise for it”.
Our Comment – So where is the money coming from if members do not lose out? You can bet your savings account balance that Mr Williamson and the other directors will not be paying the fine and they will still receive the customary bonuses for “good performance”.
View what others have to say and full reports and readers’ comments:
Thiismoney
Financial Services Authority (FSA)
BBC Report
The Register
ZD Net
Daily Telegraph
VNU Net
World Services Group
BNMA Inc
Portman Building Society Protesters
January 2007 – Members and staff of the Portman BS are not at all happy that Robert Sharpe (Portman Chief Exec.), who is due to retire with a nice fat golden handshake, wishes to encourage people to vote in favour of the Nationwide BS swallowing up the Portman BS. Nationwide is not exactly renowned as an outstanding performer. Go to www.portmanprotest.com.
Among the reasons given by Robert Sharpe why Portman members should agree to his proposed takeover by Nationwide is that Portman members will:
become members of the largest building society in the UK
gain access to a greatly enhanced branch network
gain access to a wider range of products and services
Our Comment – What a Sharp chap he is – did he not know that people can be members of more than one building society?
Merger Mania?
January 2007 – Richard Dyson in the Mail on Sunday speculates on building societies that may be in decline and considering possible mergers. Click here for full report.