By Thom Kennedy

Last updated at 12:19, Friday, 12 September 2008

THE Cumberland Building Society is safe from national takeovers because of record-breaking profits, bosses said this week.

Two loss-making local-level building societies – the Derbyshire and the Cheshire – have merged with national chain Nationwide.

But Chris McDonald, head of marketing at the Cumberland Building Society, said this was unlikely to lead to the Cumbrian business following suit.

He said: “We have no plans to merge and there would be no benefit in doing so.

“The situations with the Cheshire and Derbyshire were specific circumstances surrounding both those building societies.

“If you look at the building society model overall it is better placed to withstand the current market conditions than most banks would be.”

The two building societies came under the control of Nationwide on Monday.

The Derbyshire made a loss of £17m in the first six months of this year, while the Cheshire saw a loss of £10.5m for the same period.

Users of the building societies had their accounts directly switched over to the Nationwide, one of the country’s biggest lenders.

Mr McDonald added this was unlikely to happen at the Cumberland because it had structured lending differently.

He said: “They were both making losses for the first six months of the year and that is primarily due to losses in sub prime and riskier commercial mortgages, and the last results we published, we made a £6m profit to the end of March, a record for us.

“We have taken a more conservative approach in the past, and we fund our lending from our members’ savings so we are less reliant on wholesale markets than most banks would be.”

The building society chain has 33 branches in Cumbria, Lancashire, and south west Scotland.

It also runs the chain of 18 branches of Cumberland Estate Agents, and Mr McDonald added that some adaptations would be made to meet housing market conditions.

Two branches of the estate agents, in Brampton and Wigton, will become satellite branches. They will share the premises with the building society, the main difference being staff carrying out valuations will visit from Carlisle. These will run in a similar way to satellite offices, as seen in Ulverston.

Mr McDonald said: “It is a model we have already run successfully.”

Nationwide has reopened its Penrith branch after a move to in Middlegate.

First published at 11:48, Friday, 12 September 2008
Published by http://www.newsandstar.co.uk