Principality building society chief Peter Griffiths' 'don't panic' advice

Peter Griffiths
Image caption Peter Griffiths was awarded an OBE in the Queen's Birthday Honours in 2010

The outgoing chief executive of Wales' largest building society says mutuals are surviving the banking crisis because of trust and less risk-taking.

Peter Griffiths, stepping down after 10 years running the Principality, says it is in great shape despite the downturn.

He said it survived by heeding the advice of Corporal Jones in the BBC TV series Dads' Army - "Don't panic".

Mr Griffiths added that mutuals were weathering the storm as they weren't driven by the pursuit of profit.

The Principality is the UK's seventh largest building society and has 52 branches in Wales.

The Cardiff-based mutual society, which has 500,000 savers and borrowers, recently said it had had a "healthy" 2011, with pre-tax profits of £24.5m and a rise in mortgage lending.

'Clear strategy'

Mr Griffiths said he had had to modernise and grow the business after being appointed in March 2002.

He told BBC Radio Wales that this put the Principality in a good position when the banking crisis struck.

"I often describe it as playing cards blind because all the rules disappeared," he said.

Media playback is unsupported on your device
Media caption'I'm a great beliver in 'don't panic' " says Peter Griffiths

"Suddenly all the rules were thrown away and we were faced with a pretty stark and harrowing time.

"I'm a great believer in Corporal Jones's 'don't panic' type mode.

"We had a strong team, we had a clear strategy, stuck to what we were doing and that paid dividends."

Mr Griffiths added that mutuals, being run for the benefit of their members, had avoided the worst effects of the banking crisis and were more trusted by the public.

"It actually gave mutuals a chance to thrive because the business model is fundamentally different to the capitalist banking model," he said.

"People inherently trust the mutual model more because it's not driven for profit, it's driven in the interests of your members who own the business that you run.

"That legacy held us in very good stead."

In February, the Principality reported pre-tax profits of £24.5m, down £6.3m from the previous year.

But the group said mortgage lending was up 6.5%, taking loans over the £1bn mark.

It also attracted 38,000 new customers during 2011.

The Principality board has started looking for a successor and will look at both internal and external candidates.

Mr Griffiths will remain in the post until a suitable candidate is found.

"It is with great regret that we accept his resignation," the board said.

"His leadership skills, strategic awareness and common sense approach to business have been invaluable over the last decade."


Chris Skinner, an independent financial and banking expert analyst, said the Principality had done well to remain profitable during the recent banking crisis.

"As a building society, it didn't take risks for huge financial gains like the banks," said Mr Skinner, who is chairman of the network for senior banking executives, the Financial Services Club.

"Because most building societies are run in the interests of their members - they are customer-focused businesses - they don't take such risks to make money for shareholders.

"So they have been less affected by the financial crisis.

"All the building societies that became plcs - like Northern Rock and the Halifax - were the ones who messed up as they stopped running in the interests of their members.

"So I'd say Peter has done a good job at the Principality and has grown it so that it's now larger than it used to be."

More on this story