Skipton BS to merge with loss-making Chesham

| February 24, 2010 | 0 Comments

There is further evidence today of consolidation within the mutual sector after it has emerged that Skipton Building Society is to merge with loss-making rival Chesham.

Skipton, which is Britain’s fourth largest building society, took over Scarborough BS last summer. Skipton is regarded as one of the stronger building societies by the Financial Services Authority.

A merger between Skipton and Chesham, which is expected to become effective on June 1, would create a customer-owned lender with a 92-strong branch network and assets of more than £15 billion.

According to Skipton, the merger will further improve its capital position.

The announcement comes as Skipton announced pre-tax profit for 2009 grew to £63.5 million, against £22.5 million in 2008.

Its core tier one ratio (a key measure of financial strength) rose by 9% to 9.4%. Chief executive David Cutter said: “Skipton has coped well over the past year, achieving significant year-on-year improvements in our financial performance.”

Meanwhile, news of the merger comes just a few weeks after Yorkshire Building Society members voted in favour of a merger with Chelsea Building Society.

The merger will create the UK’s second largest building society after the Nationwide and represented the biggest deal since the Nationwide took over Portman three years ago.

Meanwhile, Scotland’s Dunfermline Building Society was hastily taken over by Nationwide in March 2009, while Cheshire and Derbyshire building societies have been swallowed up by Nationwide.

Last year, Britannia Building Society merged with Co-operative Financial Services and in June 2009, West Bromwich Building Society agreed a deal that saw the 160-year-old institution saved from collapse.

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