Investors in the Presbyterian Mutual Society voted last night to accept a deal that will see them lose some but not all of their savings.
An overwhelming majority of the society’s 9,500 savers accepted the offer from administrators that will see its business run down in an orderly manner.
The Northern Ireland-based society was plunged into crisis last November after a run on its funds. Administrator Arthur Boyd last month wrote to investors making clear that getting back all of their savings was not an option.
He made a series of proposals that would see an orderly run-down of the society’s business over time through a formal arrangement allowed for under insolvency legislation.
At the time he warned investors that if they rejected the offer they stood to lose even more money if the society was placed into immediate liquidation.
Last night it emerged that around 90 per cent of savers who returned ballot papers have voted to accept the deal. How much they will lose he has not been spelt out, but investments in property are thought to have fallen by some 40 per cent.
A valuation of the commercial property portfolio commissioned by the administrator put it at around £92 million — £37.5 million below the £129.5 million valuation placed on them in the society annual report 10 months ago. The society had also advanced loans of £184 million and the administrator is currently assessing them, including the value of property given as security.
The society hit the buffers after what was described as an unprecedented increase in requests to withdraw money when the credit crunch bit last autumn.
The administrator revealed that £21 million was paid out to investors in October, leaving only #4 million in the society’s bank account.
Between October 27th and the appointment of the administrator on November 17th, further requests for withdrawals exceeded £50 million.
The Presbyterian Mutual Society was set up in 1982 to encourage Presbyterians to save for their mutual benefit and enable shareholders to borrow at a competitive rate of interest. Church figures and politicians in Northern Ireland have urged British Prime Minister Gordon Brown to offer society members the same protection for deposits he offered to investors in other UK banks, but so far he has declined.
PA