Norwich & Peterborough Building Society has set aside £57m to pay customers who invested in Keydata products through the society.
N&P is writing to Keydata investors inviting applications for ex gratia payments, transferring the rights to the investment to N&P.
It follows protracted talks over the level of payments to be made with the FSA and the Financial Services Compensation Scheme.
Some 3,200 N&P customers bought Keydata plans between 2005 and 2009. Keydata was placed into administration in 2009.
N&P chairman Gordon Horsfield says: “The society has been deeply concerned for its customers who have suffered following Keydata’s failure and is very sorry for the hardship and anxiety that has occurred.”
The news on payouts for Keydata investors comes as the society publishes its annual results for 2010.
N&P made a pre-tax profit of £5.1m for the year to December 31,2010, up from £1.3m in 2009.
Including the £57m Keydata provision, the society posted a post-tax loss of £48.9m for the year, compared to a profit of £900,000 in 2009.
It emerged last week N&P was holding merger talks with Yorkshire Building Society.
In its result statement the society says due diligence will take several weeks to complete and that discussions are progressing well.
N&P is also looking for a replacement chief executive, following January’s announcement that Matthew Bullock is retiring. His last day with the society will be March 31.
Sales and marketing director Mike Hounsell has resigned and left the society at the end of February.