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| Rescue plan for West Bromwich BS | Rescue plan for West Bromwich BS |
| (10 minutes later) | |
| The West Bromwich Building Society is to be rescued within the next few days, the BBC's business editor Robert Peston has learnt. | The West Bromwich Building Society is to be rescued within the next few days, the BBC's business editor Robert Peston has learnt. |
| Savers at West Brom will not lose a penny and it should be business as usual for the society's mortgage borrowers, our correspondent says. | Savers at West Brom will not lose a penny and it should be business as usual for the society's mortgage borrowers, our correspondent says. |
| There have been rumours for weeks about the society being in trouble. | |
| The West Bromwich employs about 850 staff in 46 branches and has about 350,000 customers. | |
| An announcement could even be made in the next 24 hours. | |
| Nobody from the society was immediately available for comment. | Nobody from the society was immediately available for comment. |
| Last month, the West Bromwich denied reports that it was on the verge of collapse. | Last month, the West Bromwich denied reports that it was on the verge of collapse. |
| Two options | Two options |
| Our correspondent said the society had "pushed the boat out a bit too much" on commercial property and buy-to-let lending. | Our correspondent said the society had "pushed the boat out a bit too much" on commercial property and buy-to-let lending. |
| KEY FACTS Employs 850 staff and has 350,000 customersIt has 46 branches, primarily in the MidlandsIt is the eighth-largest building society in the UKHas been a mutual building society for 160 years | KEY FACTS Employs 850 staff and has 350,000 customersIt has 46 branches, primarily in the MidlandsIt is the eighth-largest building society in the UKHas been a mutual building society for 160 years |
| There are two options available to the UK's eighth-largest building society. | There are two options available to the UK's eighth-largest building society. |
| It may be broken up, with its savers transferred to another building society and its assets taken over by the Bank of England under the so-called Special Resolution Regime. | It may be broken up, with its savers transferred to another building society and its assets taken over by the Bank of England under the so-called Special Resolution Regime. |
| This is what happened to the Dunfermline Building Society. It was taken over by the Nationwide in March after incurring losses of £26m. | This is what happened to the Dunfermline Building Society. It was taken over by the Nationwide in March after incurring losses of £26m. |
| Or the Financial Services Authority and the Treasury may convert some of the debt provided by investors and financial institutions to West Brom into a new form of capital. | Or the Financial Services Authority and the Treasury may convert some of the debt provided by investors and financial institutions to West Brom into a new form of capital. |
| This could allow West Brom to keep its independence or to merge with another society. | This could allow West Brom to keep its independence or to merge with another society. |
| It is touch and go which option will be settled upon, according to our correspondent. | It is touch and go which option will be settled upon, according to our correspondent. |
| Rating cut | Rating cut |
| Last month the West Bromwich, along with four other societies, was downgraded by the credit ratings agency Fitch. | Last month the West Bromwich, along with four other societies, was downgraded by the credit ratings agency Fitch. |
| West Brom is also more dependent than some societies on wholesale funding, which has become harder to obtain Robert Peston BBC's business editor Read Robert's thoughts in full | |
| The agency said that the weakening economic environment had increased the credit risk of the societies. | The agency said that the weakening economic environment had increased the credit risk of the societies. |
| The long-term outlook for the West Bromwich was downgraded from an A- to a BBB+. | The long-term outlook for the West Bromwich was downgraded from an A- to a BBB+. |
| But a spokesman for the society said it remained "a safe and secure home for members' savings". | But a spokesman for the society said it remained "a safe and secure home for members' savings". |
| Shrinking sector | Shrinking sector |
| The potential rescue comes after a series of mergers in the building society sector. | The potential rescue comes after a series of mergers in the building society sector. |
| In September the UK's biggest building society, the Nationwide, agreed to stage a rescue takeover of two small societies, the Cheshire and the Derbyshire. | In September the UK's biggest building society, the Nationwide, agreed to stage a rescue takeover of two small societies, the Cheshire and the Derbyshire. |
| Skipton Building Society agreed in November to merge with the smaller Scarborough Building Society. | Skipton Building Society agreed in November to merge with the smaller Scarborough Building Society. |
| The following month, the Barnsley Building Society was rescued by the larger Yorkshire Building Society, the same day as the merger between the Chelsea and Catholic societies was completed. | The following month, the Barnsley Building Society was rescued by the larger Yorkshire Building Society, the same day as the merger between the Chelsea and Catholic societies was completed. |
| Banks have the option to approach their existing shareholders for more capital if they get into trouble, but as building societies are owned by their savers and borrowers that option would not work. | |
| The Building Societies Association has been particularly vocal about the "unfair" level of contribution from societies to the Financial Services Compensation Scheme which aims to protect savers' deposits. | |
| Nationwide chief executive Graham Beale said the charge was not linked to the level of risk posed to the financial system by individual institutions, but instead by the share of the retail savings market. This, he said, produced a disproportionate outcome for the low-risk retail funded institutions, particularly building societies. | |
| He described the rules as "illogical and unfair". | |
| Are you a West Bromwich Building Society employee or customer? Send us your comments using the form below. | Are you a West Bromwich Building Society employee or customer? Send us your comments using the form below. |
| The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions | The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions |