Building societies face “intense” and “unfair competition” for retail deposits from partly government-owned banks such as Lloyds Banking Group and Royal Bank of Scotland, which are perceived to have a government guarantee, the industry’s annual conference was told on Wednesday.

John Goodfellow, retiring chairman of the Building Societies Association, said the UK’s 53 mutuals were facing intense competition for retail deposits, which are used to fund the majority of lending in the sector.