The building society decided to buy back a £35 million subordinated bond facility in the light of current market conditions. But the bondholders said they would be satisfied with a repayment of only £26 million – about 74p in the pound.
Deputy chief executive Rob Procter explained: ‘In the past five or six years we have been the fastest-growing building society in the country, partly because of the Channel Islands which accounts for 40% of the business. In anticipation, last July, we raised the £35 million, but in August along came the credit crunch.
‘We are in a good position, our liquidity is good, we were never exposed to sub-prime, but the credit crunch is not going away and we do not think that a strategy of 25% to 30% growth is advisable in the current climate. There is no point in holding that capital if you’re not going to use it.’
