Building Societies in the UK Industry Market Research Report Now Updated by IBISWorld

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The past five years have been tumultuous for most of the financial market, with the Building Societies industry no exception with industry revenue expected to decline at an annualised 12.9% over the five years through 2012-13. However, a modest recovery is expected over the coming five years to 2017-18, propelled by marginal increases in house prices and growth in lending.

IBISWorld industry market research
Economic recovery and society mergers rebuild revenue growth

The past five years have been tumultuous for most of the financial market, with the Building Societies industry no exception. According to IBISWorld industry analyst Iyman Uvais, “a booming property market drove strong growth early in the five-year period, before the financial crisis resulted in demand for loans evaporating, losses on bad loans exploding and access to wholesale funding drying up”. With interest rates slashed to emergency lows, industry revenue more than halved in the two years through 2009-10. Industry revenue is expected to decline at an annualised 12.9% over the five years through 2012-13.

Despite the turmoil, the Building Societies industry has weathered the financial crisis relatively well compared with the banks, which required massive government bailouts. This reflects the more risk-averse nature of building societies, which, due to their mutual ownership, do not have the same level of pressure to maximise profit in the short term. The statutory restrictions on certain treasury activities and higher levels of capitalisation also contributed positively.

Uvais adds, “a modest recovery is expected over the coming five years to 2017-18, propelled by marginal increases in house prices and growth in lending”. Stricter regulation of the Finance sector may improve building societies' competitive position compared with the banks by reducing the banks' abilities to gain market share by taking greater risks. The Funding for Lending scheme is also expected to favourably influence lending activity. Meanwhile, rising funding costs and competition from banks for retail deposits will constrain industry profitability early in the period.
The four largest building societies account for a combined market share of over 75% both in terms of revenue and assets, indicating that the industry has a high level of concentration. Major companies include Nationwide Building Society, Yorkshire Building Society, Coventry Building Society and Skipton Building Society.

For more information on the Building Societies industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.

IBISWorld industry Report Key Topics

Building societies are cooperative financial institutions that are owned by their members (i.e. their customers, depositors and borrowers). Like banks, they take deposits and provide banking and financial services, particularly mortgage lending. Unlike banks, however, profit is distributed back to members rather than to external shareholders.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalisation & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.co.uk or call (020) 3008 6568.

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Gavin Smith
IBISWorld
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