Departing boss says mutuals will get stronger

Adrian Coles, director general for the past 20 years, predicted that member-owned lenders will go from strength to strength.

He described the wave of building society conversions as a difficult period for the sector.

“But I think subsequent events have illustrated that those that demutualised got it wrong, and those that stayed mutual got it absolutely right,” Mr Coles told the Yorkshire Post.

Of those that converted, including the ill-fated Bradford & Bingley and Halifax building societies, not one remains as an independent institution.

Mr Coles said the financial crisis of 2008 and 2009 contained some “worrying moments”.

“But I’m very proud of the way the mutual sector has come through that, with some mergers, but essentially stronger and more respected than the banking plc sector,” he added.

“Last year our lending went up very strongly compared to the banks. Ours rose by about 30 per cent.”

Most recent figures show that mortgage lending by building societies and other mutuals rose nine per cent year-on-year in November as the sector extended more than one in five home loans.

Mr Coles, who joined the BSA as an economist in 1979, said: “I think I leave the sector in a strong position.

“I think there is more trust in the mutual sector than there is in the banking sector. People recognise that the last five years were not the mutuals’ fault. They are the fault of the banks. I think there’s huge potential for the mutuals to build on that.

“I have every confidence in all building societies that they have a strong future in front of them. I am sure that they will continue to go from strength to strength.

“That strength is nothing to do with me. That will continue when I’m long gone and forgotten. It’s down to the inherent advantage of the mutual style, exhibited so strongly by the Yorkshire-based building societies.”

Mr Coles, who is 58, has agreed to stay on until a successor can be appointed.

David Webster, chairman of the BSA and head of the Hanley Economic Building Society, said: “He has played a pivotal role in guiding our industry through good times and tough times.”