Friday 27 February 2009
SIZE ISN'T EVERYTHING
This week has been all about contrasts in scale.The magnitude of the losses declared by RBS and by the Lloyds Group is almost too huge to digest. These banks have competed for the title of Biggest Loss Makers in UK corporate history and the press has been full of tales of corporate largesse and individual greed. Meanwhile back on planet- mutual, I had the privilege of attending the AGM of our local competitor The Stafford Railway Building Society whose results for 2008 demonstrate that, by sticking to the business that you know about, you can achieve profits, growth and efficiency even in a turbulent market. Stafford Railway is less than half the asset size of The Hanley and has only one branch (in Stafford) but I have more admiration for their business acumen and customer focus than I could ever muster for the banking giants of the financial services sector. Maybe now the hackneyed image of a local building society as a crusty relic of a more benign era, will be shed once and for all. Surviving and thriving in a contemporary market is about how good you are not how big you are. Both the Stafford Railway and The Hanley will I'm sure work hard to continue proving that point.
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Building Societies seem to have been the only ones with their heads screwed on. I would never have dreamt of going to a bank for a mortgage when I bought my first house in 1980, banks were for current accounts and loans, and the Building Society was the place to go for a mortgage. Thankfully there are still some 'old school' lenders out there, who will not lend ridiculous amounts of money to those who cannot afford it, and some 'old school' borrowers, who do not want to borrow more than they can afford!
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