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

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The past five years have been a tumultuous period for most of the Financial sector, with the Building Societies industry no exception. A booming property market drove strong growth early in the period, but the effects of the financial crisis resulted in industry revenue more than halving in the two years through 2009-10. A modest recovery is expected over the coming five years, with growth prospects mild. For these reasons, industry research firm IBISWorld has updated its report on the Building Societies in the UK industry.

IBISWorld Market Research

IBISWorld Market Research

The industry has been through tumultuous times, but a recovery is beginning.

The past five years have been a tumultuous period for most of the Financial sector, with the Building Societies industry no exception. A booming property market drove strong growth early in the period, but according to IBISWorld industry analyst Steven Connell, “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.

Connell adds, “a modest recovery is expected over the coming five years, with growth prospects mild because consumers remain heavily indebted, limiting their capacity to borrow”. Stricter regulation of the Financial sector may improve building societies' competitive position compared with the banks by reducing the banks' abilities to gain market share by taking greater risks. Rising funding costs and competition from banks for retail deposits will constrain industry profitability early in the period. Consolidation will continue, with smaller building societies expected to merge to increase scale and better compete with banks. Industry revenue is forecast to return to modest growth over the next five years to 2017-18.

The Building Societies industry has a high level of market share concentration with four players dominating. Nationwide Building Society is by far the biggest operator with Yorkshire Building Society, Skipton Building Society and Coventry Building Society being the other major players in the industry. Merger and acquisition activity over the past five years has been driven by the financial crisis, which has resulted in several ailing societies being rescued in takeovers by stronger competitors.

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
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