The business mission of Britannia
A Britannia case study

Page 1: Introduction

Britannia is the third largest UK building society, with group assets exceeding £16 billion. Following the conversion to plc status of a number of building societies, Britannia has emerged as one of the leading advocates of retaining its mutual status. In support of this stance, Britannia announced a unique Members’ Loyalty Bonus Scheme in February 1996. In early 1997, therefore, a...
Read full page

Page 2: Assessing the borrower

Britannia needs to take a number of other factors into account when assessing a borrower. If inadequate attention is paid to the assessment process, it will result in more people defaulting on repayments, causing arrears and ultimately repossession.Arrears and repossessions are: time consuming and costly to administer damaging to the public image of Britannia and building societies as a...
Read full page

Page 3: The status of the borrower

The Britannia needs to establish the status of the potential borrower. The most basic requirements are that the applicant: is over 18 years old at the date of completion has a regular income from an acceptable category of employment Where the loan required exceeds 75% of the valuation or purchase price (whichever is the lower), known as the Loan To Value (LTV), the following categories of...
Read full page

Page 4: Income and outgoings

When assessing the income of an applicant Britannia will count their gross annual salary (i.e. before tax and other deductions) plus 100% of their guaranteed bonuses and overtime pay. When Britannia is dealing with a self-employed applicant they will count net profit as income. This will be taken from end of year accounts providing profits have been increasing over a 3 year period. In assessing...
Read full page

Page 5: Credit scoring

Credit scoring is a technique used by many lenders to assess credit worthiness. It is a proven statistical technique which allows Britannia to calculate and predict the likelihood of non payment of a debt. Although most lenders use credit scoring, they each have a different score card, because they have different lending policies and experience.Britannia’s credit score works by giving...
Read full page

Page 6: Conclusion

Britannia was delighted with the valuer’s report. A mortgage offer was sent the Stevens including details of the loan the society was prepared to provide. Simultaneously, it sent formal instructions to the Stevens solicitor who was able to proceed with the purchase of the house. Britannia was also able to provide the Stevens with a range of suitable insurance policies including buildings and...
Read full page

Related: Britannia
Case studies in Business Case Studies