From Chelsea to Yorkshire via losses.

From Chelsea to Yorkshire via losses.

All of you that laboured through my credit crunch diary (Oct 08 to Oct 09) will recall, I lambasted the Chelsea Building Society on several fronts that I will not bore you with repeating. The chickens (or perhaps better the dogs and turkeys) duly came home to roost. The recorded loss for 2009 is £27.1m before tax as it was hit by a £41m mortgage fraud. This monumental figure was exceeded only by its provision in the previous year of £44.3m against the Icelandic bank.

The “mutual” solution is to merge with a rather larger society, namely Yorkshire, that incurred mortgage bad debts of £59m in 2009 and causing an overall loss before tax of £12.5m. As I mentioned before, Chelsea isn’t actually in Chelsea so let’s hope Yorkshire is actually in that first-class county that has always enjoyed a reputation for looking after its own. One of my Chelsea rants was about executive remuneration but this was not in the investment banking league. On the other hand, investment bankers made money.