Manchester Building Society considers merger after major loss

Manchester Building Society considers merger after major loss



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The board of a loss-making lender has revealed it could potentially look at a merger in order to save its long-term future.

Last week, Manchester Building Society announced it had insufficient regulatory capital to return to lending after it reported a £4.9m post-tax loss during 2015. 

Last month, the lender released a statement saying there was “material uncertainty” surrounding its long-term future given the decline in the scale of its operations.
 
Manchester Building Society has not been active in the mortgage lending market since 2013 and revealed that it has no plans to re-enter. 
 
David Harding, Chairman of Manchester Building Society, said despite the uncertainty surrounding the lender it would continue to put its members first.
 
“The overall result for the year is a loss because we have written down the carrying value of our head office property and the deferred tax asset. 
 
“We have also made additional provisions for our second charge portfolios acquired between 2003 and 2007.”
 
In April 2015, Manchester Building Society completed the sale of its stake in New Life Home Finance Limited which brought in £995,000 - a £745,000 profit on the £250,000 originally invested in 2005. 
 
However, in trying to turnaround the lender’s fortunes, Manchester Building Society said it was looking at a range of options, including seeking a capital injection from other parties or securing its future through a merger or alternative means.  
 
“The Board is developing a number of options which individually or in combination are reasonably expected to secure the future of the Society, enable it to continue to meet capital requirements and improve the quality of its regulatory capital. 
 
“The Board expects to develop these plans over the next few months.”
 
Despite no assessment into these different options being completed, the lender’s board remained confident of a “successful outcome”.

1 Comments

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    John Dawson

    Have you sorted your problem regarding loosing money. As I was a member once when you had an agency in Southport. This to be announced one way or the other for members benifit and others regarding investments.

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