The West Bromwich Building Society’s status as an independent regional financial services provider is secure, its new chief executive has declared.
Just over one week into the job, Robert Sharpe was adamant that a takeover of the 159-year-old, £10 billion, organisation by a bigger rival was not on the cards.
“I would not have taken the job if that was the case. I have not come to do a merger,” Mr Sharpe said in his first interview since taking over from the well known Stephen Karle on October 13.
He was supported by West Brom chairman Brian Woods-Scawen who said: “We have no need to merge, we are in a strong financial position.”
Questions have been raised about the future of the society following Mr Karle’s sudden and unexpected departure after only two years as chief executive.
It has emerged that although Mr Karle, a former Black Country lawyer who spent a total of 14 years at the West Brom, had been negotiating his exit with the board for some time his departure took staff by surprise when it was announced on October 10.
His replacement by Mr Sharpe, previously chief executive of the now-vanished Portman Building Society, was announced at the same time.
Mr Sharpe drove the Bournemouth-based Portman from 13th to third in the building societies league, taking over the Staffordshire on the way. The Portman itself merged with Nationwide in 2007.
The change at the top at the West Brom has come at a time of unprecedented turmoil in the banking and financial services industry.
National newspapers have speculated - wrongly, it would appear – that the West Brom could be the next acquistion by Nationwide, the country’s biggest building society by a huge margin after it gobbled up the Cheshire and the Derbyshire (comparative minnows) after concerns were raised about the stability of their balance sheets.
The fact that Mr Sharpe has a history of doing deals only served to fuel the speculation.
Speculation that he and Mr Woods-Scawen is keen to lay to rest.
“The fact that the Nationwide is still digesting the Cheshire and the Derbyshire makes it highly unlikely that it would want to coming knocking on our door,” Mr Sharpe said.
Mr Woods-Scawen added: “We have had no discussions with Nationwide and they have confirmed that they have not made an approach to us.
“The West Bromwich is in an extremely strong position to be able to continue being a regionally-based mutual with a fantastic local customer base who are very loyal and a good franchise.
“We have been serving the people of Birmingham and the Black Country for 159 years and will continue doing so.”
The society has no exposure to the toxic sub-prime loans and their associated complicated and little understood derivatives that sent the global credit market into meltdown last year, Mr Woods-Scawen said.
In the current climate, however, the West Brom faces challenges as mortgage lending dries up and borrowers face higher living costs if not redundancy as the recession depeens, said Mr Sharpe.
“We have got our challenges but we are well placed to face and overcome them. I am confident that we we will emerge even stronger.”
Mr Sharpe said the society’s arrears are growing (“I defy anyone to say their arrears aren’t higher than a year ago”) but it would maintain its “compassionate” approach to borrowers who fall into arrrears.
The £500 million of extra mortgage funding designed to ease the credit squeeze in the region that Mr Karle announced shortly before he left was still on the table, but uptake on the part of borrowers is likely to low in the present climate, Mr Sharpe said.
He said yesterday that job losses cannot be ruled out as the society trims its costs to match the market downturn.
Wherever possible, however, staff would be moved from areas facing reduced workloads, such as mortgage processing, to areas of the business, such as customer support, where more are needed.
On a personal note, Mr Sharpe said he would be looking to move from his present home in the New Forest to the West Midlands in the next few months.
He currently commutes between home and his office on a weekly basis.