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West Bromwich debt deal

West Bromwich debt deal

Category: Mortgages

Updated: 12/06/2009
First Published: 12/06/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
West Bromwich Building Society has gone some way to securing its future after reaching an agreement with debt holders.

It plans to convert its debt of £182.5 million into capital, meaning a break up of its operations or insolvency should be avoided.

The deal will strengthen its core tier one capital ratio, which is the measure used by regulators to determine an institution's fincial strength, to a level which will see West Bromwich amongst one of the highest rated in the sector, the Society said.

The UK's eight largest building society, which employs 850 staff across 46 branches, has also announced an annual pre-tax loss of £48.8 million.

"The exchange of the Society's tier-2 sub debt into core tier 1 capital materially strengthens our capital position and, under stress test scenarios, has demonstrated our ability to withstand a further significant deterioration in market conditions," said Robert Sharpe, chief executive.

"With this firm footing, we are well positioned for the future," he added.

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