Yesterday we reported on the financial changes going through at the West Bromwich building society and the potential impact this would have on the society's members. In exchange for writing off significant debts, investors have been offered shares that will participate in future profit-sharing programs but also dramatically increase the financial strength of the operation. It now appears as though other building societies are looking towards so-called preferred participating deferred shares as a means of strengthening their balance sheets.

The building society sector of today is almost unrecognisable from that just 10 or 20 years ago and very very different from the one which began over 100 years ago. The wave of change which has overcome the sector during the last few years has now impacted directly upon the profit-sharing base of the movement and the rights of members. While it appears that we can expect a significant number of similar investment programmes from other smaller building societies it is highly unlikely that the larger societies will take this particular approach.

Slowly but surely we are seeing a merger of the traditional banking sector and the traditional building society sector with very little between them in many areas of business.

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