...Stable, Undiversified Business Model: Fitch Ratings view s the UK building society business model as stable and low risk, but less diversified than commercial banks'. UK building societies' small market shares, focusing on relatively standardised products, means they are typically price takers, although their mutual status helps to generate stronger loyalty w ithin their regional savings franchises. Overall, w e consider the societies' company profile an important factor in assessing their Viability Ratings (VRs). Well Perform ing Loan Books : Strong loan performance is supported by benign operating conditions (low unemployment, low interest rates, rising house prices) and a focus on low risk, moderate loan-to-value (LTV) prime residential mortgages. A highly competitive mortgage market and tighter asset yields have led to an increase in appetite for segments that w e consider to be higher risk such as buy-to-let (BTL), niche mortgage sectors and, in some cases, an increase in the overall...
