West Bromwich Building Society Accounts

by Mark Alexander

18:10 PM, 21st October 2014
About 5 years ago

West Bromwich Building Society Accounts

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West Bromwich Building Society Accounts

The 2013/14 accounts for West Bromwich Building Society show that they appear to have turned a corner and are back into profit. West Bromwich Building Society Accounts

Or do they?

Perhaps that corner is a roundabout!

Profits of £2.1 million were declared and their Chief Executive got a very nice thank you in the form of a whopping £134,000 bonus.

What was that for I wonder?

The startling results and turnaround in fortunes perhaps?

But hang on a minute ……… wasn’t their justification for increasing tracker rate margins that they were doing so badly?

West Bromwich Building Society Swanky New Head Office

West Bromwich Building Society
Swanky New Head Office

Any notion of restructuring, staffing cuts or putting their swanky new head office plans on hold was none existent. Surely that’s what struggling business do when their finances come under pressure?

Having poured over their accounts there is a mention of a Court case by the Property118 representative action group which is challenging the tracker mortgage rate hike but ………. their is no provision in their accounts for losing the case!

It was previously estimated by mainstream media that West Brom would net around £15 – £20 million a year from the tracker margin rate hike. It’s been over a year now since they announced it and by the time the case gets to Court it will be around a full year from implementation.

Where will the money come from to pay back all that over charging and the comparatively ludicrous costs of their legal team to fight the Court case? Obviously they consider they have a cast iron case of winning but over £500,000 has been raised by people who don’t agree with them and neither do 53 MP’s who signed Early Day Motion #976 [link]. The trade press, most IFA’s and mortgage brokers as well as the mainstream media weren’t too impressed with the rate hike either!

The legal battle in the Commercial Courts is now imminent, we are just waiting for the date to be announced.

 



Comments

Mark Alexander

10:22 AM, 23rd October 2014
About 5 years ago

Reply to the comment left by "Dean " at "23/10/2014 - 10:18":

Well I can guarantee 4, myself, my wife and two of my business partners.
.

Dean

10:41 AM, 23rd October 2014
About 5 years ago

Hopefully I will be able to get there too

Appalled Landlord

23:18 PM, 24th October 2014
About 5 years ago

Coincidentally, the BBC reports that KPMG’s audit of the Co-op Bank has been criticised:
http://www.bbc.com/news/business-29726235

KPMG said its audits had been "robust". That word again!

Accountancy Age http://www.accountancyage.com/aa/news/2377354/mps-blast-kpmg-over-failings-at-co-op-bank
stated:

The accounting hole largely stemmed from the Co-op Bank's calamitous merger with Britannia Building Society, with losses emanating from Britannia coming predominantly from its commercial loan book. According to MPs, the due diligence performed on this book "has proved to have been totally inadequate".
"KPMG's initial due diligence was based on incomplete information," the committee said. The committee added that it was "surprised" that additional due diligence recommended by KPMG was allowed to be performed to such a low standard.
"KPMG should have given clear guidance to Co-op Bank about the standard required. The Committee is also surprised that, despite recommending the additional due diligence, KPMG did not scrutinise it once complete," it said.
MPs also criticised KPMG for failing to realise that the Co-op Bank's approach to recording its impairments in the years running up to 2013 was "looser" than the rest of the industry.
"This should have been clear to Co-op Bank's management-to all those responsible for risk and accounting, including the board, relevant executives and committees. It should also have been apparent to Co-op Bank's auditor-KPMG-and to the regulator-for the period in question, the FSA," it said. "The committee is surprised that, in spite of the evidence it has heard, Co-op Bank's former auditors, KPMG, maintain that Co-op Bank was not an outlier in terms of its impairments."
KPMG has consistently defended its work as auditors of the Co-op Bank - a relationship that lasted 40 years until the firm was dismissed in May this year. In a statement KPMG said: "As the former auditor to the bank, we believe that we have provided robust audits which challenged the judgements and disclosures proposed by the bank's management.
"As reported by the TSC, having conducted limited work, KPMG recommended further due diligence in relation to Britannia, which was performed by the Co-op Bank itself. KPMG was not responsible for guiding further due diligence undertaken by the Co-op Bank nor had a responsibility to scrutinise the results once complete. The scope of due diligence and the merits of a potential acquisition are matters for the board."

I wonder how robust KPMG were in challenging “the judgements and disclosures proposed by the management” in the case of WB, particularly in relation to the lack of provision for the legal dispute over increasing our tracker rates, but also in relation to impairments and commercial loans.

Ed Atkinson

11:50 AM, 25th October 2014
About 5 years ago

Well done on the Court Date. All the hard work is paying off.

A success that we can celebrate already, is there have been no more Banks or Building Societies trying such a rate hike. The march was from Skipton, to Bank of Ireland, to W Brom and on to .....

I hope I have not spoken out prematurely. I'm not superstitious.

Thanks Mark and all the team, Ed

Onslow Clough

14:07 PM, 25th October 2014
About 5 years ago

Finally having a date is great news, it gives us something to focus on. A lot of people have done a lot of work to get us to this point and my wife and I will try to be there at court on the 21st Jan to celebrate the result of our perseverance... I only hope we get the result on the day because there are a couple of people I would very much like to buy a drink.

Badger

15:22 PM, 4th November 2014
About 5 years ago

Reply to the comment left by "Dean " at "23/10/2014 - 10:41":

I will be there.

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