 Organizational form, business strategies and the demise of demutualized building societies in the UKRadha K. Shiwakoti, Abdullah Iqbal and Warwick Funnell Journal of Banking & Finance, 2018, vol. 94, issue C, 337-350 Abstract: This paper examines and compares the performance and operating behavior of demutualized building societies (DBS) over the period of 1987–2007 relative to mutual building societies and major retail banks in the UK. We find significant differences in their operating behavior over this period and show that the operating behavior varies with the form of ownership. We also investigate the potential causes of the failure of all DBS in the UK. Our findings show significant changes in the funding and lending strategies of DBS which expose them to higher risk. We also find a strained capital formation and deteriorating capital base of DBS in the post-conversion period. Our results suggest that changes in the business model, diminished capital base and, in part, failing to get all the necessary funding from the wholesale market at the time of the financial crisis of 2007–08 contributed to the demise of a once a successful financial institution in the UK. Keywords: Building societies; Mortgage banks; Banks; Organizational form; Demutualization; Financial crisis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:94:y:2018:i:c:p:337-350 DOI: 10.1016/j.jbankfin.2018.05.002 Access Statistics for this article Journal of Banking & Finance is currently edited by Ike Mathur More articles in Journal of Banking & Finance from Elsevier |
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