Rescued West Brom says it will stay independent

Jun 13 2009 by Iain Laing, The Journal

WEST Bromwich Building Society has insisted it will retain its independence after agreeing on a debt deal to strengthen its finances.

The 160-year-old mutual said it had “absolutely no plans to merge with anyone“ after a move to convert £182.5m of debts into a financial instrument which will qualify as high quality capital.

West Bromwich, which also posted an annual loss of £48.8m yesterday, said the arrangement would provide it with a buffer to help it absorb any losses and give it the capital strength to pass government stress tests. The lender’s troubles had whipped up speculation that it could be subject to a rescue sale and break-up similar to the Dunfermline Building Society, which was partly absorbed by building society giant Nationwide earlier this year.

West Bromwich chief executive Robert Sharpe, who joined the society last October, said the fate of his firm would be different.

“We have absolutely no plans to merge with anyone, as I have said consistently over the last few weeks,” he said.

“We have never been in merger talks with anyone. Following the transaction signed overnight, we now have one of the strongest tier one capitals in the building society sector.”

But he added that the Financial Services Authority (FSA) and West Bromwich had “worked closely on contingency plans if this transaction had not completed”.