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Societies ponder swoop for Derbyshire

Rival building societies are understood to be circling Derbyshire Building Society for a possible takeover.

It is thought that Yorkshire Building Society is one of the main contenders, with Newcastle and Leeds Building Society also in the frame.

A source close to Derbyshire says: “It is notorio- usly difficult to make mergers and acquisitions happen in the building society market. Derbyshire has had conversations with three obvious contenders but it can be up to an 18-month process to make it happen.”

Derbyshire confirmed this week that it is to cut up to 50 jobs and close three of its 50 branches.

The society has seen profits for last year nearly halved from £16.4m to £8.7m.

The society was put on review for a possible downgrade by rating agency Moody’s which says Derbyshire has relatively high exposure to specialised mortgage markets. An update is expec- ted in the next few weeks.

Derbyshire’s intermediary arm Salt has withdrawn from the sub-prime market.

A spokesman for Derbyshire says: “We have not solicited any approaches. We continue to remain committed to being independent.”

Yorkshire, Newcastle and Leeds Building Societies all deny making an approach.

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