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Woolwich considers becoming a bank

Nigel Cope
Sunday 07 January 1996 19:02 EST
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NIGEL COPE

Woolwich Building Society is considering plans to convert to bank status and seek a stock market listing, with some sources suggesting that an announcement could be made as early as next week. Woolwich refused to comment on weekend speculation that an announcement was imminent. However, it said it would reveal its intentions by the end of March.

"We are no longer commenting on this kind of specuation," a Woolwich spokesman said. "We are examining various options. If and when there is something to announce we will announce it."

If it does decide to convert to bank status and seek a stock market listing, Woolwich members could receive shares to the value of pounds 680 on average.

The building society sector has been plagued by the wave of "hot money" that has been cascading through the financial sector over the last year as investors try to take advantage of conversion and float plans by opening myriads of building society accounts with tiny balances. Last summer Woolwich increased the minimum deposit required to open an account from pounds 100 to pounds 500, to deter bounty-hunters.

Alliance & Leicester has increased its minimum balance to pounds 1,000 but Woolwich will keep its opening minimum at pounds 500. Speculation has been rife that Woolwich was planning a move to bank status. Some feel the catalyst is the appointment of the new chief executive, Peter Robinson, who took over from Donald Kirkham last week.

Following Abbey National's conversion to bank status, Halifax has announced similar plans while Cheltenham & Gloucester was taken over by Lloyds Bank.

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