Yorkshire and Chelsea merger leads to job losses
It emerged yesterday that Yorkshire Building Society and Chelsea Building Society were in advanced merger talks but today the Yorkshire has revealed that a tie-up would lead to a number of job losses and a £200 million write-down on Chelsea’s bad debts.
“The merger will lead to a number of job losses,” the two societies warned. “Redundancies will only be considered after full consultation and after other options including redeployment have been considered.”
The combined society will be known as Yorkshire Building Society and Iain Cornish, the Yorkshire’s chief executive, will run the new mutual, while Stuart Bernau, Chelsea’s chief executive, will step down prior to the completion of the merger.
Commenting on the deal, Mr Cornish said: “This merger creates a second major force in the building society sector. Joining with Chelsea offers a great opportunity to build on the strengths of both societies and form a strong, independent mutual organisation.”
However, the deal requires approval from both societies’ members and the Financial Services Authority.
The deal, which will be the biggest merger in the building society sector since Nationwide took over Portman three years ago, will create an institution with 2.7 million customers and assets of around £38 billion.
The news of the job losses comes as Norwich & Peterborough (N&P), which is Britain’s tenth largest society, revealed it is to close 10 of its branches, putting more than 50 jobs at risk.
N&P said it can’t compete with state-owned banks and those where savings have a 100% Government guarantee.