Why have some building societies converted to banks in the past?
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In July 1989, Abbey National became the first building society to convert to a bank, floating on the stock exchange and moving to plc status. Its actions were followed over the next decade by Cheltenham & Gloucester, National & Provincial, Alliance & Leicester, Woolwich, Halifax, Northern Rock, Bristol & West, Birmingham Midshires and Bradford & Bingley, although not all of these institutions floated on the stock market, or retained their independence. As part of these conversions, members received a variety of 'windfalls' in the form of either cash or shares in the new company. The values of these windfalls varied and in a number of cases were not sufficient to compensate for the higher mortgage rates and lower savings rates typically offered by these institutions now.
It is difficult to see why these institutions have converted. They have subsequently (though not in every single case) suffered a reduced share of the savings and mortgage markets.
Will the remaining societies also convert?
