A good year gone, a good year to come

“2006 was a year of strong and well balanced performance for the sector” were the comments of Matthew Bullock, outgoing Chairman of the BSA, in his closing address to the BSA’s Annual Conference in Bournemouth today.

Despite an increasingly difficult and competitive marketplace, he noted that building societies have improved their cost / asset ratios and increased their return on reserves, while retaining their market share in the mortgage and savings market.

Describing this as a very credible performance he noted this was against a backdrop of trading conditions that will get more challenging. The current rising trend in interest rates may well see a calming of the housing market, while a possible contraction of credit in the UK market may further challenge societies and consumers in the future.

The Chairman also looked at issues within the sector. He said that the Nationwide / Portman merger shows “that mutuals can grow to a significant scale without abandoning – and indeed by actually thriving on - their mutual structure.”

He also commended Sir John Butterfill’s Private Member’s Bill. This will relax important funding constraints on societies, enhance consumer protection and offers the potential for wider ranges of mergers between different classes of mutuals.

Looking ahead, the Chairman said the underlying legality of contractually agreed fees and charges may be properly re-established. He also said that the work to reunite members who have lost contact with their accounts will continue.