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Revenge of the building society

Back in the 1980s and 1990s building societies seemed like dinosaurs, doomed to extinction. A wave of demutualisations showered money on investors, carpetbaggers dived in for quick profits and then many of the new plc banks were quickly taken over. Then came the financial crisis, with aggressive former societies such as Northern Rock and Bradford & Bingley meeting a sticky end. The remainder struggled to find cash to lend during 2008 and 2009 against the state-rescued banks. Meanwhile, investors in the formerly safe area of permanent interest-bearing shares (Pibs) suffered big losses as some societies, including Dunfermline, Chelsea and West Bromwich, ran into trouble.

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By Nick Louth,
07 December 2012

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