The Nationwide, the largest remaining building society, is believed
to be reviewing its public affairs account, which has been held by
Beaumark for two years.
Issues on Nationwide’s public affairs agenda at the moment are likely to
include its potential demutualisation. The society is in the process of
consulting its 4.9 million voting members on whether it should convert
to a bank - an operation which might result in windfall shares for
members - or remain mutualised, ahead of its AGM next week.
The society, under the leadership of chief executive Brian Davis, is
urging its members to vote in favour of the status quo. Beaumark has
been promoting Nationwide’s campaign to remain a mutual society among
A spokesperson for Nationwide said: ’We have a very satisfactory
relationship with Beaumark but we review our contracts with all our
suppliers from time to time.’ Alongside Beaumark, Nationwide retains
Hogarth for its financial PR.
Building societies which have converted to banks so far include Alliance
and Leicester, Halifax and Woolwich. Several were criticised for
allowing ’carpetbaggers’ - speculative short-term investors - to access
huge windfalls and for distributing them unevenly - favouring male
account-holders in joint accounts for example.
Last April, the Labour MP for Wentworth, John Hesley introduced a
private member’s bill seeking to give all building society members equal
rights to windfall money.
Nationwide has 681 branches, employs 9,805 people full- time and
processed over 1.3 million transactions every working day during the
last financial year.
Last week, the society reported pre-tax profits for the 1997/1998
financial year of pounds 372.3 million, up 40.6 per cent on the previous
year. It expects its member benefits - gained through mortgage rates and
savings rates - to increase by at least pounds 100 million over the next
year, from pounds 200 million to over pounds 300 million. The society
now represents an 11.9 per cent share of the net new residential
mortgage market in the UK, up from its historic 7.7 per cent portion.