The Manchester Building Society is a British financial services brand that operates as a trading name of Newcastle Building Society which offers savings accounts. Reporting its intention to retain the use of the Manchester Building Society brand beyond that date, the society announced that it had completed its merger with Newcastle Building Society on 1 July 2023.

Description

Established in 1922, MBS was a member of the

Building Societies Association The Building Societies Association (BSA) is the trade body that represents all building societies and several large credit unions in the United Kingdom. It was established in 1869 under the original name Building Societies Protection Association, ...

and covered by the Financial Ombudsman Service, as well as the FSCS deposit guarantee scheme. As a mutual, it was owned by and operated for its members. The society claimed to operate a streamlined organisation, based in the heart of Manchester, which allowed them to keep costs to a minimum and pass on the benefits to members.

History

From 2016, the society was instructed by its regulator, the PRA, to no longer undertake new lending on the basis that it had insufficient capital on its balance sheet to mitigate risks of new business. A capital shortfall as a result of historic accounting errors was blamed. Nevertheless, the society continued to service mortgages issued before 2016, accepting new deposits and applications by individuals to open personal savings accounts. It retained statutory minimum deposit insurance for its members. However, the society stopped paying PIBS holders interest in 2016. The society's management took former auditor,

Grant Thornton Grant Thornton is a multinational professional services network based in London, United Kingdom. It is the seventh-largest in the world by revenue and the sixth-largest by number of employees. The network consists of independent accounting an ...

, to court, claimed it had acted negligently and ultimately caused the capitalisation concerns. Towards the end of 2018, they were awarded a negligible sum versus the initial claim, and forced to pay Grant Thornton's costs which were far in excess of the award. The society took this decision to the Supreme Court where in June 2021 the lower court's decision was overturned. The society confirmed at the start of 2019 that there continued to be uncertainty around its long-term future. The society were subsequently audited by KPMG, shortly after which they were replaced by PwC. Unusually for a UK-based organisation, the society historically offered its members lifetime mortgages against properties in Spain, a form of indebtedness taken on in later life with the aim of never making interest payments or paying down the principal in the borrower's lifetime. On death,

lien A lien ( or ) is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the ''lienee'' and the pers ...

on the property continues to be held by the society until full repayment is made. In February 2023 it was confirmed that the society had agreed to merge with the Newcastle Building Society. The merger was completed on 1 July 2023.

References

External links

Manchester Building SocietyKPMG Building Societies Database 2008
Former building societies of the United Kingdom Banks established in 1922 Organizations established in 1922 Organisations based in Manchester 1922 establishments in England 2023 mergers and acquisitions {{UK-bsoc-stub