Two new branch openings are on the cards for the West Bromwich Building Society as its losses narrow and it eyes a return to profit next year.
The society posted a pre-tax loss of £5.5 million for the six months leading up to the end of September, compared to an £11.7 million loss for the corresponding half-year in 2009.
Despite still being in the red, chief executive Robert Sharpe said he was happy with the results, and was looking at opening new branches in Solihull and Halesowen.
“We’re very pleased with them because it’s continuing improvement and continuing progress.”
“We’ve come a long way since our massive loss of two years ago,” he said
The 160-year-old society stood on the brink of collapse in June 2009 after it was forced into a £182.5 million debt-for-equity deal when the financial authorities stress tested its model and said it was inadequately capitalised.
Since then the society has brought in a new management team, cut costs by 40 per cent and enforced a “back to basics” strategy which saw it turn its back on activities such as commercial lending and buy-to-let and return to funding mortgages from its savings book.
It has gradually reduced its losses since the crisis – and Mr Sharpe said he anticipated a return to profit next year.
“We would sincerely hope that we will be breaking even or back into a small profit in our next financial year, which starts on April 1 next year, and that will have completed a three-year recovery.”
Mr Sharpe said the society was continuing to invest in its branch network, with a programme of refurbishments being rolled out at the moment tying in with a change of brand name to The West Brom.
And it is looking to further expand the current network of branches throughout Birmingham and the Black Country, which provide work for around 800 people.
“There are some branch openings on the cards - we are looking closely at the moment at the areas of Solihull and Halesowen,” he said.
Part of the losses posted for the six month period stemmed from a £1.3 million hit The West Brom had to take from the Financial Services Compensation Scheme, a levy on the financial services industry to pay customers of collapsed institutions.
Mr Sharpe said: “It’s particularly galling for building societies because the levy is based on the amount of retail savings – and the whole ethos of buildings societies is about getting in retail funds from savers, whereas the banks in relative terms pay less because they are dependant on the wholesale rather than the retail markets.”
The society also announced changes to its board, with the appointment of Jonathan Westhoff, currently group finance director, to deputy chief executive and Mark Gibbard, currently with Nationwide Building Society, taking over as group finance director in January next year.
Andrew Jones, currently divisional director risk at the society, has been appointed to the board as group risk director.