Comparative performance of UK mutual building societies and stock retail banks: further evidence

Authors: Shiwakoti, Radha K.¹; Keasey, Kevin²; Hudson, Robert²

Source: Accounting and Finance, Volume 48, Number 2, June 2008 , pp. 319-336(18)

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Abstract:

The purpose of this paper is to extend the literature on the comparative performance of mutual and stock retail banks by examining a unique episode in the history of financial services; namely, when four of the largest UK building societies (accounting for approximately 60 per cent of the industry's assets) demutualized to public limited company status in 1997. The episode allows us to consider the relative performance of the same businesses under different organizational forms. The results contrast starkly with previous findings and cast doubt on the hypothesis that mutuals generally outperform stock retail banks and indeed the idea that mutuals can be regarded as a homogeneous group of institutions.

Keywords: Building societies; Banks; Demutualization; Performance; G21 Banks; Other Depository Institutions

Document Type: Research article

DOI: http://dx.doi.org/10.1111/j.1467-629X.2007.00244.x

Affiliations: 1: Kent Business School, University of Kent, Canterbury, Kent, CT2 7PE, UK 2: Leeds University Business School, University of Leeds, Leeds, LS2 9JT, UK

Publication date: 2008-06-01