Coventry Building Society in merger talks with Stroud & Swindon

| March 7, 2010
”Coventry

According to reports this weekend, Coventry Building Society is in merger talks with its smaller rival, the Stroud & Swindon.

The talks follow a series of recent mergers between Britain’s building societies and, should a deal be successful, will bring more consolidation to the mutual sector.

The news comes as Coventry, which is the country’s third largest building society, announced last week that its profits doubled to £56.2 million in 2009.

As a result of its strong capital position, it has maintained its A credit rating. However, Stroud & Swindon lost nearly £3 million but insists it is financially sound.

Meanwhile, the possible merger is understood to have the approval of city watchdog, the Financial Services Authority (FSA). However, Stroud & Swindon is not being forced by the FSA to find a buyer.

Should a merger go ahead, the combined mutual would have assets of nearly £25 billion.

Over the weekend, Stroud & Swindon stressed it had “strong capital and very strong liquidity” and added: “Our members’ borrowing and savings are not at risk,” according to Linda Will, the group’s sales and marketing director. ”

Last month, it emerged that Skipton Building Society was merging with loss-making rival Chesham.

Meanwhile, earlier this year, 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.

Tags: , , , , , , ,


Comments (1)

Trackback URL | Comments RSS Feed

  1. Bruce says:

    I’m generally bullish about the banking sector, we have had 20% retracement of banking stocks in Australia over the last 3 months which makes a good buying opportunity, many are trading around 16pe and have already expecting profits to double on 2008′s drop, which would put them around 12pe, some of the good value banks here in Australia are ANZ trading at only 1.7 times Equity, NAB trading at 1.6 times earnings and Suncorp trading at 0.8 times earnings, the other banks CBA and Westpac are well above earnings and are now overpriced – 2.4 and 2.7 times respectively.