Up to 150 jobs are at risk at West Bromwich Building Society as the region’s biggest mutual fights the harshest economic downturn for nearly two decades.
The depth of the recession in the region was underlined today as the West Brom – a proudly independent mutual for 159 years – prepared to wield the axe on scores of staff in the region.
The society’s 1,000+ employees were being told of the impending 10 per cent cutbacks at a series of staff consultations arranged for today, just weeks after new boss Robert Sharpe was parachuted in.
And the cutbacks triggered speculation that the West Brom was being slimmed down for a potential takeover as the UK financial sector grapples with the impact of the recession following the global credit crisis and the near collapse of the international banking sector.
The society, the UK’s eighth biggest with 530,000 members, has been at the centre of speculation in recent weeks while ratings agency Fitch changed its outlook of the West Brom from “stable” to “negative” due to falling house prices and rising unemployment.
Fitch said in October that the society’s high exposure to buy to let mortgages were a concern following its extension of its commercial lending portfolio over the last three years.
The society would not confirm the numbers of jobs at risk ahead of today’s scheduled staff briefings and a statement said: “We are unable at the present time to speculate on possible redundancies.
“However, as with the rest of the financial services sector, the West Bromwich Building Society is not immune to the impact of current market conditions and is currently reviewing all its group business activity.”
But speculation was rife that as many as 150 jobs could go in the latest hammer blow to the region following a string of major job loss announcements in recent weeks.
The Black Country society was rocked by the sudden departure of former chief executive Stephen Karle, a prominent figure in West Midland business and finance circles, in early October.
Mr Karle was immediately replaced by former Portman Building Society chief executive Robert Sharpe, giving rise to speculation that the West Brom could be ripe for a takeover or merger.
Mr Sharpe, aged 59, is seen in financial circles as the driving force behind the Portman’s takeover of the old Wolverhampton-based Staffordshire Building Society in 2003.
The Portman was subsequently swallowed up itself in 2007 when it merged with the Nationwide, the UK’s biggest mutual. Reports claimed Mr Sharpe had left with a £1.7 million golden handshake.
In his first interview after taking the reins, Mr Sharpe poured scorn on the takeover speculation, saying: “There is undoubtedly going to be some more consolidation in the building society sector, there is no doubt about that.
“We will come out the other side of the credit crunch a stronger institution as an independent mutual.”