West Brom to establish a brave New World

West Bromwich Building Society is to launch an intermediary subsidiary in autumn this year under the name New World.

The New World brand was acquired in March 2002 when the society acquired a residential UK mortgage portfolio from the Commonwealth Bank of Australia.

The acquired portfolio sits on the books of the West Bromwich Mortgage Company, a purpose-designed subsidiary whose assets do not confer full membership rights of the building society proper.

From autumn, new intermediary business will also go onto the balance sheet of the Mortgage Company.

Gary Cowdrill, finance director at West Bromwich, says: “We are still in the planning process, and have some substantial systems and process arrangements to put in place. We are looking to develop the origination stream of non-membership mortgages, which are eligible for securitisation.”

Cowdrill adds that New World will give the society the opportunity to tailor products specifically for the intermediary market.

West Bromwich is the latest building society to direct intermediary-sourced business into a non-member subsidiary, following in the footsteps of Britannia and, more recently, Yorkshire.

Rob Clifford, managing director of mortgageforce, says: “Lenders are increasingly going down this path. But quite a lot of consumers like the idea of building societies precisely because of mutuality and members&#39 benefits. If these are revoked for intermediary business, it comes straight down to rates and service, so building societies could lose their key differentiation factor.”