British building society Britannia has pulled out of a proposed joint venture with the EBS to establish a separate subsidiary that would sell mortgages through brokers.

The EBS now intends to pursue the project without a partner.

Subject to regulatory approval from the Financial Regulator, it plans to launch the subsidiary by the end of January next.

Last night an EBS spokesman confirmed it was proceeding on its own but would not comment further.

Three years ago EBS decided to enter the broker market through a separately branded subsidiary.

While the company was awaiting the regulatory changes that would permit that move, it began to sell EBS mortgages through brokers two years ago.

The mutual society is understood to have built up a loan book of about €2 billion since then.

A memo sent to EBS staff yesterday said that "due to current global market conditions Britannia has decided now is not the time to launch a new venture outside its core UK market".

EBS's management believes there is significant room for the building society to grow through intermediaries.

It has about 12 per cent of the overall mortgage market but just 6 per cent of the business put through brokers goes to the society.

Tony Moroney has been appointed chief executive of the new venture which has the working title Westport.

He will continue as an executive director but will step down from the EBS management board.

Dara Deering and Norman Burns have been appointed to the management board on an interim basis.

Their appointment will be confirmed when EBS appoints a new chief executive to replace Ted McGovern.

Mr McGovern departed at the end of the summer.