Skipton to merge with Chesham Building Society
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Skipton Building Society has announced plans to merge with Chesham as it posted a 189 per cent increase in its profits from £22m to £63.5m.
Group mortgage assets increased by £1.3bn to £10.7bn, mainly as a result of the merger with Scarborough Building Society in March 2009.
Money Marketing first revealed last month Skipton’s controversial move to scrap the ceiling and hike its standard variable rate.
The proposed merger with Chesham would create a building society with over £15bn of assets and 92 branches.
Subject to confirmation by the FSA and approval by Chesham members, the merger is expected to take place on June 1 2010.
Skipton has committed to retaining Chesham’s three branches for 12 months from the date of merger, after which they will be subject to the Society’s ongoing branch review process.
There will also be no compulsory redundancies among branch staff as a result of the merger.
Skipton group chief executive David Cutter says Skipton has acheived significant year-on-year improvements in its financial performance.
But he says: “Uncertainties remain regarding the economy, the Government’s finances, the impact of an historic quantitative easing programme, and the distortions in the UK savings market. We therefore remain vigilant.”
Cutter adds: “That is why we announced steps, after the end of the financial year, which will enable the society to combat the challenges it faces in the current, exceptional economic environment - characterised by historically low interest rates and a distorted retail savings market.
“These steps include increasing our mortgage standard variable rate from 3.5 per cent to 4.95 per cent from 1 March 2010 and the announcement of 90 redundancies within the society.
“There is a growing risk that any GDP recovery will be anaemic and slow.”
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