Yorkshire and Chelsea Building Societies to merge
The Boards of Yorkshire Building Society and Chelsea Building Society announced today that they have agreed to merge, creating a second major force in the building society sector.
The enlarged Society will have assets of £35bn, providing a competitive and secure alternative to the retail banks. With 2.7m members and a national network of 178 branches, the merged Society will focus on the traditional building society business of residential mortgages and savings and will be principally retail funded. The enlarged Society will be known as Yorkshire Building Society with the Chelsea Building Society name retained and operated as a separate and distinct brand within the Yorkshire. The merger is subject to the approval of eligible members from both societies and confirmation by the FSA; it is expected to complete on 1st April 2010
Member Benefits
Members of both societies will continue to benefit from being part of an independent mutual, with savers and borrowers having the security and stability provided by the Yorkshire, the UK's 2nd largest building society
The merger creates a strong mutual of greater scale, improved efficiency and better market positioning that will be well placed to deliver greater value to its members
The enlarged Society will continue to be owned and run for the benefit of its members, offering good value products and excellent customer service
Branches will remain in all communities where either the Yorkshire or Chelsea currently have a presence
There will be a commitment to continue community activities throughout the UK
Dual Financial Services Compensation Scheme (FSCS) protection (up to £50,000 per individual) will be retained for eligible savers who have accounts with both the Yorkshire and Chelsea immediately before completion of the merger (until 30 December 2010)
There will be a commitment to maintain a high level of member engagement in the operation of the enlarged Society
Merger Rationale
The merger creates a second major force in the building society sector, with the scale, efficiency and financial resources to provide a strong, independent and customer-focused alternative to the banks
The terms of the merger include arrangements to protect the capital base and funding position of the enlarged Society. The Yorkshire will continue to have one of the strongest capital positions of any major UK bank or building society
The transaction is expected to deliver significant annual savings which are anticipated to be fully realised within 18 months after the merger, creating a more efficient organisation, without compromising member service
The good geographical fit of branch networks provides a larger, more diverse and better balanced national presence in the savings and mortgage markets
The two societies have a shared commitment to member interests and local communities
The Chief Executive of the enlarged Society will be Iain Cornish, currently Chief Executive of Yorkshire Building Society. Ed Anderson, Yorkshire Building Society Chairman, will remain as Chairman. Stuart Bernau, Executive Chairman of Chelsea Building Society, who has led the strategic review of Chelsea, will relinquish his Board position immediately prior to the merger becoming effective.
Iain Cornish, Chief Executive of Yorkshire Building Society 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.
"Chelsea has an excellent reputation, particularly in the savings market, and a strong network of branches in the south. Combining forces with them will strengthen our ability to deliver value to members through good value products and excellent service, underpinned by our significant financial strength. Together our combined expertise will deliver a competitive, member-owned organisation, which will provide real choice to consumers across the UK.
"The enlarged Society will continue to have one of the strongest capital positions of any major UK bank or building society and a secure funding base. As far as Yorkshire is concerned, we are seeing more positive signs and this merger will ensure that we are extremely well placed to prosper as markets recover. I firmly believe that a merger with Chelsea on these terms is in our members' interests and urge them to vote in favour of it".
Stuart Bernau, Executive Chairman of Chelsea Building Society said: "Chelsea and Yorkshire have proud histories as mutual organisations; each is committed to providing high levels of customer service to their members and supporting the communities in which they operate. The merger will create a second major force within the building society sector with a strong capital position and deeper financial resources.
"As part of the Yorkshire, the Chelsea name that our members know and love will live on, and they will continue to be able to receive the same style of friendly and personal service that is the pride of our Society. We urge our members to vote in favour of the merger".