Abbey National Building Society

Paper Summary:

This paper explains that a building society is a Financial Institution that is owned by all its members rather than by its shareholders which plays the role of paying interests on the deposits made by the members and also of lending money to its members by proposing to keep the property as security in order to enable them to buy a house of their own. The paper then details the history of the Abbey National Building Society from its beginnings in 1944 to the present day as well as what Abbey National Building Society has had to do to remain successful.

From the Paper:

"The market conditions at the time were very strict and regulated, and there was stiff competition everywhere. The 1986 occurrence of the 'Big Bang' served to break down all the traditional barriers that a person would expect in a Bank, and soon banks and other financial institutions became more capable of offering a wide range of financial services that hitherto had not been done. Abbey Building Society had at this time already demonstrated its free and independent thinking by breaking away from the Cartel of building societies that had insisted on certain fixed basic mortgage rates for everyone. Therefore when the decision to convert into a plc was taken in 1989, and after the conversion had actually taken place, there was a dramatic increase in the number of shareholders in the United Kingdom: the numbers rose from 6 million to 9.5 million, a 50% increase. (Conversion to plc, the Background)"

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