Yorkshire Building Society and Norwich & Peterborough plan Merger
Sector: Banking & Finance
21st April 2011
Yorkshire Building Society is set to merge with the Norwich & Peterborough Building Society in a deal that will create a mutual with more than three million members. Yorkshire, the UK's second largest mutual, will keep the Norwich & Peterborough as a separate brand and has ruled out compulsory redundancies as a result of the integration for at least two years.
If the merger is agreed by the societies' members, when the £3.7bn of funds controlled by N&P are taken into account, the combined mutual will have assets of more than £30bn. "We will build on N&P's strong brand and the value it has delivered to its members, while gaining the opportunity to consider developing our own products in areas where N&P has complementary capabilities and expertise, such as the current account market," said Iain Cornish, chief executive of the Yorkshire. Gordon Horsfield, chairman of N&P, said the opportunity to merge with the Yorkshire was "right" for the mutual and the deal was needed to give the business the investment it needs. "The necessary resources for this continuing investment can only come from the economies of scale, organisational depth and financial strength associated with size," said Mr Horsfield.
The announcement of the terms of the merger comes two months after Mr Cornish said he would be leaving the Yorkshire having guided the building society back to profit. A search is currently under way for a successor, who will also take over the running of the N&P. Anne Gunther, who was made Chief Executive of N&P on Tuesday, is not understood to be in the running to get the job, according to a source close to the situation. The decision on the new Chief Executive is expected within the next five to six weeks, after which Mr Cornish will begin the hand over process.
Details of the proposed merger come a day after N&P was fined £1.4m by the Financial Services Authority for failing to give customers "suitable advice" in relation to Keydata products it sold. As part of the FSA settlement, N&P will also have to make £51m in compensation payments to customers for losses on Keydata investments.
Source: Telegraph
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