This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7602785.stm

The article has changed 3 times. There is an RSS feed of changes available.

Version 0 Version 1
Nationwide in talks over mergers Nationwide in talks over mergers
(about 3 hours later)
The Nationwide Building Society is in talks to merge with two of its smaller rivals, the Derbyshire and Cheshire Building Societies.The Nationwide Building Society is in talks to merge with two of its smaller rivals, the Derbyshire and Cheshire Building Societies.
If agreed, the deals could result in thousands of members of the two smaller firms receiving windfall payments.If agreed, the deals could result in thousands of members of the two smaller firms receiving windfall payments.
The credit crunch has aided Nationwide, the UK's biggest mutual lender with 14 million members, as more people looked for a "safe haven" for their savings.The credit crunch has aided Nationwide, the UK's biggest mutual lender with 14 million members, as more people looked for a "safe haven" for their savings.
In contrast, smaller building societies face growing financial challenges.In contrast, smaller building societies face growing financial challenges.
Tough climateTough climate
Nationwide confirmed that it was in "advanced discussions" with the Derbyshire and Cheshire organisations about separate mergers.Nationwide confirmed that it was in "advanced discussions" with the Derbyshire and Cheshire organisations about separate mergers.
The Derbyshire is the larger of the two, with 500,000 members, 50 branches across the Midlands, the North East and Yorkshire and total assets worth more than £7bn.The Derbyshire is the larger of the two, with 500,000 members, 50 branches across the Midlands, the North East and Yorkshire and total assets worth more than £7bn.
The City watchdog, the FSA, wants them under the stewardship of the more robust Nationwide BBC Business Editor Robert Peston Read Robert's thoughts
The Cheshire has about 400,000 members, operating 60 building society and estate agency branches.The Cheshire has about 400,000 members, operating 60 building society and estate agency branches.
It has assets of just under £5bn.It has assets of just under £5bn.
Both societies saw their profits fall last year, to £8.7m and £8.1m respectively, amid tough conditions in housing and credit markets.Both societies saw their profits fall last year, to £8.7m and £8.1m respectively, amid tough conditions in housing and credit markets.
Like all lenders, building societies have cut the amount of loans on offer and raised rates in response to the credit squeeze, although both Derbyshire and Cheshire insist they have strong mortgage books.Like all lenders, building societies have cut the amount of loans on offer and raised rates in response to the credit squeeze, although both Derbyshire and Cheshire insist they have strong mortgage books.
However, the negative publicity surrounding the near-collapse of Northern Rock has affected smaller banks and mutual lenders more.However, the negative publicity surrounding the near-collapse of Northern Rock has affected smaller banks and mutual lenders more.
The prospect of a fresh wave of mergers among UK building societies will raise the question of how much members can expect to benefit.The prospect of a fresh wave of mergers among UK building societies will raise the question of how much members can expect to benefit.
When the Nationwide merged with the Portman last year, the latter's members pocketed windfall sums of between £200 and £1,000.When the Nationwide merged with the Portman last year, the latter's members pocketed windfall sums of between £200 and £1,000.
But the BBC's Business Editor Robert Peston said the sharp decline in the housing market made the possibility of windfall payments remote.