YET more building societies are likely to disappear from the High Street as financially stretched mutuals are forced to merge, the Bank of England said.
The biannual Financial Stability Report warned that the sector may 'coalesce around a small number of stronger, larger societies' after the credit crunch wreaked havoc with lenders' balance sheets.
Whereas there were 101 building societies in 1990, that number had fallen to 67 in 2000 and now stands at only 50.
Replica watchesThe scope for further consolidation is 'somewhat' limited in the near term in the wake of the wave of mergers during the banking crisis.
These include Nationwide's takeovers of the Cheshire, Derbyshire and Dunfermline societies.
Replica watchesBut the mutuals still need to 'improve their resilience,' the Bank of England warned.
It said: 'There may be scope for societies to contain costs through increased co-operation, for example by sharing back-office services.' Consolidation through mergers 'offers another means of achieving lower costs through economies of scale.' Excluding sector giant Nationwide, societies need to refinance [pounds sterling]22bn of fixed-rate bonds in 2010, or 16pc of their total liabilities.
Given such financial strains, most societies Replica watches have 'sharply' retrenched their lending, slashing it by 61pc in 2008, and yet more in 2009, the Bank said.
They are also struggling to keep up with larger High-Street banks amid intense competition for deposits.
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