First National Building Society (FNBS) remains on course for an autumn flotation despite current turbulent stock market conditions.

But members of the mutual building society who are banking on big windfall gains may have to scale back their expectations if current conditions continue until the expected flotation in October.

There has been no change in the proposed timescale for the flotation of the FNBS, according to deputy managing director, Mr Tony Shanahan.

"The timescale is the same as before. We are still on course for an autumn flotation. Our prospectus will be published later this month." Commenting on the current turbulence in international equity markets and the 5 per cent fall in the Irish Stock Exchange Index yesterday, Mr Shanahan commented: "Any one day or one week in the markets is not an indication. Between now and our anticipated flotation date there are many weeks and it would be an extraordinary market that continued to be this nervous over such a protracted period."

The markets have gone back to about where they were a year ago with the financial stocks losing most of the gains made over the last year, he said. But price earnings multiples on financial shares are around the 14 or 15 level which he described as "healthy".

While the price of the shares will not be decided until closer to the actual date of flotation, First National could decide to scale back the amount of funds it is planning to raise if markets remain weak. In its conversion document, the mutual society, which is to be converted into a limited company before flotation, set an upper limit of £150 million on the funds it would raise in the market. That was scaled back to £100 million when interim results were reported last week.

Mr Shanahan said that this figure was "flexible". First National, which will be known as First Active, could raise a smaller amount of new equity funds on flotation and come back to the market later when prices improved. "That is one of the advantages of flotation. We could go to the market at any time," he said.

Market sources said current conditions would be tough for any new offering. First National has one big advantage: it is not in urgent need of funds. But if current conditions continue, the initial offer price of the shares will be lower than could have been achieved in buoyant trading conditions. Some 220,000 members qualify for 450 free shares each. First Nationals advisers had put a conservative value of £1,170 on the block of shares.

In buoyant conditions some market analysts valued the block of shares at around £2,000. The latest market gyrations will have brought that valuation back closer to £1,500. The final price will only be struck at the time of flotation and will depend on market conditions at that time.