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| Building societies agree merger | Building societies agree merger |
| (29 minutes later) | |
| The Yorkshire and Chelsea building societies have confirmed they will merge to create a large rival to the UK's biggest society, the Nationwide. | The Yorkshire and Chelsea building societies have confirmed they will merge to create a large rival to the UK's biggest society, the Nationwide. |
| The deal would create a society with 2.7 million members, a network of 178 branches and assets of £35bn. | The deal would create a society with 2.7 million members, a network of 178 branches and assets of £35bn. |
| The merger is considered a rescue for Chelsea, which lost significant sums it had invested in failed Icelandic banks. | The merger is considered a rescue for Chelsea, which lost significant sums it had invested in failed Icelandic banks. |
| The merger needs to be agreed by the societies' members, who will not receive a windfall from a deal. | The merger needs to be agreed by the societies' members, who will not receive a windfall from a deal. |
| The two societies will retain their brand names under the proposals, but the enlarged society will be called the Yorkshire Building Society. | The two societies will retain their brand names under the proposals, but the enlarged society will be called the Yorkshire Building Society. |
| Most of the Chelsea's head office in Cheltenham will close, with the enlarged society being run from the Yorkshire's head office in Bradford. | Most of the Chelsea's head office in Cheltenham will close, with the enlarged society being run from the Yorkshire's head office in Bradford. |
| Rescue deal | Rescue deal |
| The new larger society will have a wider geographical spread of branches across England, with the societies promising that branches will remain in communities where the societies currently operate. | The new larger society will have a wider geographical spread of branches across England, with the societies promising that branches will remain in communities where the societies currently operate. |
| Since the onset of the 'credit crunch' Chelsea has experienced a period of disappointing financial results arising from a range of factors Chelsea building society statement | Since the onset of the 'credit crunch' Chelsea has experienced a period of disappointing financial results arising from a range of factors Chelsea building society statement |
| Iain Cornish, chief executive of the Yorkshire, said that there would be no windfall for members because economic conditions were tougher than at the time of previous building society deals. | Iain Cornish, chief executive of the Yorkshire, said that there would be no windfall for members because economic conditions were tougher than at the time of previous building society deals. |
| The merger is likely to be interpreted as a rescue deal for Chelsea, currently the UK's fifth largest building society , whose new chairman Stuart Bernau has been reviewing the future of the business and whether it should stay independent. | The merger is likely to be interpreted as a rescue deal for Chelsea, currently the UK's fifth largest building society , whose new chairman Stuart Bernau has been reviewing the future of the business and whether it should stay independent. |
| In August, it reported a half-year loss of £26m after setting aside £41m to cover the cost of mortgage frauds. | In August, it reported a half-year loss of £26m after setting aside £41m to cover the cost of mortgage frauds. |
| In 2008, it reported a full-year loss of £39m, the largest yet recorded by a building society, brought on by losing £44m which had been invested in two failed Icelandic banks. | In 2008, it reported a full-year loss of £39m, the largest yet recorded by a building society, brought on by losing £44m which had been invested in two failed Icelandic banks. |
| "Since the onset of the 'credit crunch' Chelsea has experienced a period of disappointing financial results arising from a range of factors," the Chelsea said. | "Since the onset of the 'credit crunch' Chelsea has experienced a period of disappointing financial results arising from a range of factors," the Chelsea said. |
| "[The merger] will create a larger building society with greater capital strength and deeper financial resources than Chelsea. | "[The merger] will create a larger building society with greater capital strength and deeper financial resources than Chelsea. |
| "Without the merger... your board believes that Chelsea would not be able to continue to provide the same range of products or good value pricing to its members," it added. | "Without the merger... your board believes that Chelsea would not be able to continue to provide the same range of products or good value pricing to its members," it added. |
| The Yorkshire said it had also recorded a loss, of £22m, for the first half of 2009. | The Yorkshire said it had also recorded a loss, of £22m, for the first half of 2009. |
| Details | Details |
| The aim is for the merger to have taken place by April next year. | The aim is for the merger to have taken place by April next year. |
| There will be an unspecified number of job losses when the merged society cuts duplicated overhead costs. | There will be an unspecified number of job losses when the merged society cuts duplicated overhead costs. |
| "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," the Chelsea said. | "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," the Chelsea said. |
| Anyone who has savings with both the Chelsea and the Yorkshire will retain their separate £50,000 cover for each society under the Financial Services Compensation Scheme (FSCS), but that dual cover will expire on 30 December 2010. | Anyone who has savings with both the Chelsea and the Yorkshire will retain their separate £50,000 cover for each society under the Financial Services Compensation Scheme (FSCS), but that dual cover will expire on 30 December 2010. |
| After that point, savers with money in both societies will only receive £50,000 of cover under the FSCS for their total savings in both the Yorkshire and Chelsea. | After that point, savers with money in both societies will only receive £50,000 of cover under the FSCS for their total savings in both the Yorkshire and Chelsea. |
| Members of both societies will receive voting packs in the next few weeks. | Members of both societies will receive voting packs in the next few weeks. |
| No public money is involved in the deal and there will be no bonuses for officers or directors of either society as a result of the merger going through. | No public money is involved in the deal and there will be no bonuses for officers or directors of either society as a result of the merger going through. |
| Changing sector | Changing sector |
| Unlike banks and other stock-market quoted companies, building societies, which are owned by their members, have a limited ability to replenish their reserves if they are drained by losses. | Unlike banks and other stock-market quoted companies, building societies, which are owned by their members, have a limited ability to replenish their reserves if they are drained by losses. |
| Since the autumn of 2008 there has been a flurry of takeovers of small building societies to rescue them from problems brought on by the financial crisis. | Since the autumn of 2008 there has been a flurry of takeovers of small building societies to rescue them from problems brought on by the financial crisis. |
| In September last year, the Nationwide agreed to stage a rescue takeover of both the Cheshire and the Derbyshire. | In September last year, the Nationwide agreed to stage a rescue takeover of both the Cheshire and the Derbyshire. |
| The Yorkshire then took over the Barnsley building society, while the Skipton took over the Scarborough. | The Yorkshire then took over the Barnsley building society, while the Skipton took over the Scarborough. |
| In March this year, the Dunfermline building society collapsed, to be taken over by the Nationwide. | In March this year, the Dunfermline building society collapsed, to be taken over by the Nationwide. |
| This was swiftly followed in June by emergency action by the authorities to ensure that the loss-making West Bromwich could stay afloat. | This was swiftly followed in June by emergency action by the authorities to ensure that the loss-making West Bromwich could stay afloat. |
| Meanwhile one of the UK's largest and strongest building societies, the Britannia, has merged with the Co-op bank. | Meanwhile one of the UK's largest and strongest building societies, the Britannia, has merged with the Co-op bank. |
| What is your reaction to the proposed merger? Should it go ahead? Are you an employee or customer of either building society? Send us your comments using the form below. | What is your reaction to the proposed merger? Should it go ahead? Are you an employee or customer of either building society? Send us your comments using the form below. |
| The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions | The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions |