EBS committed to keeping mutual status

THE EBS building society says it is committed to maintaining its mutual status for the foreseeable future.

The EBS said maintaining its mutual stance would benefit members in the long run. The society is just one of two independent building societies left in the State, but new legislation is being drafted, which will pave the way for the other, Irish Nationwide Building Society, to convert to a bank.

The society's chief executive Ted McGovern said the EBS has made a submission to the Department of the Environment, which is drawing up the new building societies legislation and it is expecting the changes will allow it offer more products and find new methods of funding.

"We don't know what the legislation will look like, but we would be happy that it has taken on board the issues we have raised.

"We are committed to remaining and evolving as a mutual to provide a real alternative to the other banks. We are consulting our members and they support us. We gave back €10 million [to members] last year and we will give back at least another €10 million this year and as interest rates move up that will increase," he said.

Yesterday the society said its pre-tax surplus for 2003 had risen by 15% to €62.6 million with another year of strong growth in mortgage advances. It also netted a surplus of €6.5 million from the sale of its former head office in central Dublin.

The society lent out €1.9 billion in residential mortgages, a 16% rise and a further €263 million in advances to residential property investors. The society's commercial book also recorded a rise in advances, up 25% to €259 million.

Mr McGovern said he was pleased by the performance of the society in 2003 and that mortgage growth had continued into this year.

On the deposit side, €506 million came in. The society added 20,000 new members in last year.

In common with other financial institutions its net interest margin dropped from 1.61% to 1.46% as it passed on the full 1.25% cut in interest rates.

There was good news for the society's mortgage customers as it is cutting its standard variable mortgage rate to 3.25% from 3.35%.

Mr McGovern said this would save around €10 to €12 a month for all its customers and made the society the most competitive mortgage provider. The move will cost the society €10 million this year.