The Boards of Yorkshire Building Society and Norwich & Peterborough Building Society (N&P) announced today that they have agreed the terms of a proposed merger.
Yorkshire Building Society is the UK’s second largest building society with assets exceeding £30bn, while N&P is the UK’s ninth largest society with assets of £3.7bn. The proposed merger will create an enlarged Society with 3 million members and 224 branches.
The combined Society, which will be known as Yorkshire Building Society, will be focused on the traditional building society business of residential mortgages and savings and will be principally retail funded.
Norwich & Peterborough name to be retained
The N&P name will be retained as a separate and distinct brand within the Yorkshire, similar to the Chelsea and Barnsley brands.
The merger is subject to final agreement by the Boards of both societies and to certain conditions being satisfied, principally the approval of eligible members of N&P at a Special General Meeting (SGM) and confirmation by the Financial Services Authority (FSA).
The proposed merger is expected to complete on 1 November 2011.
Merger makes commercial sense
News of the merger comes towards the end of a torrid week for N&P following the £1.4 million fine imposed by the FSA for failing to give its customers suitable advice in relation to the sale of Keydata products.
Paul Davies, banking analyst at Which?, said of the merger: ‘The merger of the two large building societies is the latest in a long line of tie-ups in the mutual sector, following the onset of the financial crisis in 2008 – and the consolidation of the two organisations makes commercial sense. YBS has a good reputation for customer service and is a Which? Recommended Provider in the savings market.
‘The new entity will benefit from the fact that there is little overlap in terms of the branch network and it will be a strong position to compete in the key savings and mortgages sectors.’
Which? Money when you need it
You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.
Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.
Or for money-saving tips, and news of how what’s going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast
For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.