Future of Manchester Building Society remains uncertain
MANCHESTER Building Society has warned that it will be posting another loss in its 2016 half year results, although its liquidity position remains strong.
It said the loss was largely a result of professional costs incurred in exploring options to secure the future of the society, as well as the costs of pursuing its claim against its former external auditor Grant Thornton.
It has also warned that it will not meet the qualitative standards for the level of CET1 regulatory capital set by the Prudential Regulation Authority, thereby prohibiting the payment of interest on the society’s Permanent Interest Bearing Shares.
In April, the building society posted full year 2015 pre-tax losses of £600,000 (2014: £4.3m profit), while operating profit before impairment stood at £2.9m (2014: £4.7m).
Directors warned that the accounts showed a material uncertainty surrounding the mutual’s long-term future, given the continuing decline in the scale of operations.
The society has not been active in the lending market since 2013 and has has no plans to re-enter the mortgage market – mortgage assets have reduced by approximately 40% over the last three years.
Manchester Building Society was founded in 1922 and has one branch on Queen Street. It has around 4,000 mortgage borrowers, as well as about 18,000 savings accounts.
