The Consumers' Association of Ireland has warned that building society customers are "worse-off" after conversion. In a statement on the day First National announced its intention to demutualise, the association's chief executive, Ms Caroline Gill, said that, while the conversion of a building society to a publicly-quoted company has attractions for certain members, particularly new shareholders, directors and professional advisers, many long-term members of the mutually-owned society ultimately lose out. "They are the losers. Cash windfalls paid out to consumers are generally short-term and are in fact paid for by the consumers themselves. These inducements do not give any long-term advantage," according to Ms Gill.

She highlighted a recent Consumer Association report in Britain which claimed that, following the conversion of building societies, savings rates tended to be lower and mortgage rates higher than when they were operated as building societies.

Ms Gill said that, while deregulation and privatisation had brought many benefits to consumers, there was also a downside for consumers.

"If all the building societies convert, the field could be narrowed to four or five dominant players which will lead to consumers paying more for their loans and receiving less interest on their savings."

First National customers who qualify under legislation as members of the society will have to approve its conversion to a public company.

Under the 1989 Building Societies Act, members each have one vote regardless of the amount of money in their account. They must be given at least six months notice of any proposal to change the status of the society, during which time they can, in certain circumstances, petition against such a move.

The society has strongly urged its members approve the conversion, which now seems likely in mid- to late-1998.