Another two building societies are to join forces and strengthen their positions as the banking crisis unfolds.
A merger between Skipton and Scarborough Building Societies looks set to go ahead after the boards of the North Yorkshire-based institutions agreed head of terms. In a joint statement, they said the deal represents a real opportunity to create a society that is better able to deal with turbulence in the financial marketplace.
The amalgamation - which is expected to be completed in the first quarter of next year - follows a similar tie-up between Barnsley and Yorkshire Building Societies. Scarborough approached Skipton after difficult trading conditions hit its profits and weakened its capital position. The prospect of further house price falls also influenced its decision.
Mortgage borrowers and savers with Scarborough will move to Skipton where they will enjoy similar or better terms and interest rates. The enlarged society is expected to have around 860,000 members and over £16 billion of assets.
John Carrier, chief executive of Scarborough Building Society, said: "A merger of the societies will create a much larger, stronger business in North Yorkshire which offers real advantages to both organisations and their members going forward, in view of the strengths and values we share, our close geographical location and our ethos of returning good value to our members."
