West Brom may escape break-up
West Bromwich has just put out a statement which implies that it will - almost certainly - avoid being broken up and put into the Special Resolution Regime run by the Bank of England.
Instead it appears to be on course to persuade holders of its so-called subordinated debt - some £182.5m of it - to convert this debt into capital.
It's a clever way to avoid insolvency, by creating new capital that can absorb future losses on imprudent lending.
This doesn't mean that West Brom will remain independent however. A merger with the likes of Coventry BS may still be the best way forward.
But it would buy West Brom the time to make the decision on its future in a controlled an orderly way.
Here's the West Brom statement:
"West Bromwich Building Society is in advanced discussions with holders of the Society's subordinated debt to exchange the full outstanding principal amount of the Society's subordinated debt, totalling £182.5 million, for a new instrument which will qualify as core tier 1 capital.
"Such a transaction would materially strengthen the Society's core tier 1 capital ratio as well as improving quality of the Society's capital base. The Society expects to make a further announcement with respect to this transaction in due course."
UPDATE, 17:30: The moment of most acute difficulties for Britain's banks and building societies is passed.
But that doesn't mean it's plain sailing for all of them - especially if like West Bromwich Building Society they've become too exposed to the commercial property and buy-to-let markets.
Building societies face a particular difficulty when they incur losses - which is that it's especially hard for them to raise new equity capital to absorb such losses, to say afloat.
So what's happening at West Brom today may represent something of a breakthrough.
The society seems to be on course to persuade holders of £182.5m of so called subordinated debt to convert this debt into what it calls "a new instrument" which would be the equivalent of core capital.
This may sound like mumbo jumbo.
But what it means is that West Brom is acquiring a buffer to absorb losses and avoid insolvency.
If it succeeds there will have been a last minute escape from a grisly fate. Because the alternative for this 160-year-old pillar of the Midlands economy was to be broken up, with West Brom's savers going to another society and its assets wound up, under the management of the Bank of England.