The First National Building Society bandwagon rolled into town this week with the promise to enrich qualifying members. The society must first seek approval from those self same members to have its shares listed on the stock market this autumn. Suddenly that FNBS mortgage and/or investment nest egg took on added significance, with members checking the extent of their involvement with the society to see if they, too, could go to the ball. Although not yet confirmed, it is likely that members will also have the opportunity to purchase additional shares at a preferential rate on whatever price the equity comes to market.
The offering looks like creating the sort of feeding frenzy that surrounded the Irish Permanent and Norwich Union listings. The FNBS telephone helpline is already handling a steady volume of enquiries from members ahead of the e.g.m on May 18th which may see the society abandon mutuality and convert into a publicly-owned bank. While approval for the conversion and flotation is widely expected, members have the option to vote no, a highly unlikely scenario but one which cannot entirely be ruled out.
Around 220,000 savers and mortgage holders could receive free shares worth an estimated £1,800 each if they sanction the change of status to public company. The society has intimated for some time that it favoured going public, which may explain the tight criteria applied to members. Carpetbaggers, who jumped aboard the savings bandwagon in the past year in hopes of supping at the society's groaning table, will be disappointed. Only savers with investment accounts held continuously between April 8th, 1996, to May 18th, 1998, and with a running balance of at least £100 between July 1977 and May 1998 will qualify. Mortgage holders must have had loans since April 8th, 1996, and have at least £500 outstanding on December 31st, 1977, and on May 18th,1998.
A call this week to the FNBS helpline, apart from confirming that your fortunate scribe is numbered among the beneficiaries, produced a strong exhortation to vote and to vote "yes". A request for guidance and information on the case for voting "no" was received with some bewilderment, oddly reminiscent of the Government at the time of the divorce referendum. Good practice requires that the muted voice of any "no" lobby should at least be heard, not drowned by the raucous cries of those scrambling to trade their vote for upwards of £1,500.
